EU: Recent Developments — Motion to Take Note
3:39 pm

Photo of Lord Clinton-Davis

Lord Clinton-Davis (Labour)

My Lords, the single market is not the only feature of the European Union. I was very glad to hear my noble friend Lord Monks refer to the social dimension of the EU, a view which I put forward in the Commission some years ago. I am also very glad that the noble Lord, Lord Brittan, is here today and the noble Lord, Lord Tugendhat, who are members of the Commission.

The idea of Britain being isolated in the European Union is absolutely hopeless. In my view, we have a duty to align ourselves with those who think alike, not on everything, but on most things. That is why I think that our continued membership of the European Union is absolutely vital. The policy pursued by the present Government is quite wrong, in my view. We could say goodbye to our chances of being heard if it were applied. It would be a sure route to insignificance and wholly in line with the decision to quit the European People's Party. I have never agreed wholly with the EPP but I think that is a manifest mistake.

Of course, the Prime Minister is terrified of his own Eurosceptic Back-Benchers and at the same time most of the members of the eurozone. It is a somewhat uncomfortable posture and the very opposite of leadership.

We should always remember that our exports to the European Union constitute a significant proportion of the whole, even if we accept the view that they should be downgraded to 40 per cent from 50 per cent. Perhaps even more salient-this would be the view of the vast majority of the European Union-we should seek allies, as I have already said. Should you put both those objectives in jeopardy?

As the noble Lord, Lord Newby, has said, it is bizarre that our Prime Minister should invoke other members of the eurozone to,

"sort out the mess that is the euro".

Do we have no responsibility? Is it all down to the Lib Dems? Do they really approve of the Cameron veto? In my view, Labour was right to assert that, in any event, this was a phantom veto because, as the Foreign Secretary has argued, no one really knows where Britain stands vis-à-vis the European Union, not even the Prime Minister. He walked out of the European Union negotiations last December. Was it less an act of defiance and more a frightened curtsey to his European sceptics? It makes it infinitely more difficult to be listened to, to be heeded and for our real interests to be protected. That is not, in my view, the right way to go. The success of the French in hanging on to their dubious agricultural policies has not been due to a walk-out, but quite the reverse.

I am not arguing that everything in the EU is rosy or is incapable of error-no Government can ever tame those objectives-but, in my view, we are better off in than in our present posture of being neither in nor out. Our voice should be heard; that is precisely why we joined the European enterprise in the first place.

The European Court of Justice must be the enforcer of financial rectitude in the eurozone. It should levy fines against eurozone members. In this regard at least, surely Angela Merkel is right to contend that this is immutable. I am not saying that I agree with all her views, but on that proposition she is absolutely correct.

As for Greece, the IMF has contended, via Poul Thomsen, a senior official with direct responsibility for Greece, that while reforms to modernise the economy should continue, the needs of Greek society must not be overlooked. That is not a view that I have always heard in this place or elsewhere.

It goes without saying that the EU is plagued by serious financial problems-but is severe austerity the only and right answer? Overdoing it, as the IMF acknowledged, can lead to deep recession. A compromise is essential. Some growth is indispensable. Public sector cuts must be accompanied by the ability of consumers and businesses to spend more sensibly.

What the Government are doing-alas, they are not the only ones-is aiming their axe at public expenditure, thus reducing economic activity, growth and tax revenue. Alternatively, right across the EU, public investment, cutting income tax for low earners, and attacking tax avoidance, along with deficit reduction, would promote employment and growth. It is never too late to change tack.

For Britain to withdraw from the EU would be a dangerous and perhaps fatal policy. The views of the public, for example on hanging, can be misleading. Something may be popular at one time, but the public are not always right. There is too much at stake on this issue. Those of us who believe in the fundamental purposes of the European Union must be more assertive in explaining that there is no realistic alternative if Britain's true interests are to be served.

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