Section 5 of the European Communities (Amendment) Act 1993

Part of Opposition Day — [15th Allotted Day] — Sure Start Children’s Centres – in the House of Commons at 8:12 pm on 27th April 2011.

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Photo of Bill Cash Bill Cash Chair, European Scrutiny Committee, Chair, European Scrutiny Committee 8:12 pm, 27th April 2011

It will be useful to remind the House of what section 5 of the European Communities (Amendment) Act 1993 actually says. Some of us were here in 1993 during the Maastricht debates, and it was rather an interesting moment when the only piece of reality in the whole of that Session occurred. That was when an attempt was made to restrain the movement towards a European Government. Section 5 states:

Her Majesty’s Government shall report to Parliament for its approval an assessment of the medium term economic and budgetary position in relation to public investment expenditure and to the social, economic and environmental goals set out in Article 2”— they are pretty extensive—

“which report shall form the basis of any submission to the Council and Commission in pursuit of their responsibilities under Articles 103 and 104c.”

What this really boils down to is that, in order for us to be able to continue—leaving aside the opt-out from the euro—we effectively have to comply with the convergence criteria and other criteria that are laid down by the European Union. Effectively, leaving aside the question of the European stability mechanism—my hon. Friend Alec Shelbrooke knows that I totally agree with the extremely important point that he made earlier—the bottom line is that we have been moving inexorably, regrettably and avoidably towards deeper and deeper European integration, with more and more requirements and obligations being imposed on us.

As Chairman of the European Scrutiny Committee, I and other colleagues here tonight—my hon. Friends the Members for Daventry (Chris Heaton-Harris) and for North East Somerset (Jacob Rees-Mogg), and Kelvin Hopkins, a distinguished member of the Committee from the other side of the House—know the sheer, massive extent of the invasion and the vast range of impediments that are put in our way as a result of decisions taken not by this Parliament but by other countries, by the European Commission and by the European institutions. So this is an important debate, and the Minister will understand why I objected to the idea that it should be shunted off to some innocuous Committee, well controlled by the Whips, without having any real opportunity for the whole House to participate.

I can make my points briefly. Some have already been made and others I have made myself in the past, so I do not need to elaborate on them. First, I very much agree with the suggestion that this undemocratic process affects the daily lives of the people of this country and inhibits our ability to grow our economy, particularly when at least 4% of our gross domestic product is lost through excessive European regulation of small and medium-sized businesses. I find it utterly absurd—it is incomprehensible to me—that the Government cannot simply say, “Look, we’ve tried. We’ve gone ahead. We’ve tried to negotiate, but they are not listening. We are going to have to override the European legislation.” I think it negligent not to do so.

I received a letter from the Prime Minister only a few days ago, reminding us that the European Council

“agreed on the need for robust actions to support growth”.

He went on to refer to reducing

“the overall burden of regulation including exemptions for micro-enterprises from future regulations”.

In my right hon. Friend’s absence, I have to say—he will know that I would say it anyway—that “future” regulations are not the issue. The real question is about existing regulations. I do not need to go through them all again—I have written pamphlets about them, as have many others—and we know that there is a vast array of completely negative regulations that cause a vast amount of difficulty for small and medium-sized businesses. We are not going to achieve the private enterprise that will be needed to pay for the public sector that is needed unless we get out of that vicious circle. That is point No. 1.

Point No. 2 is that the consequences of not having sufficient growth and of having the deeply regrettable legacy of the deficit will mean that riots and protests—not only in other countries, but in our own—will grow as the pain bites into the economy and into people’s daily lives. This will lead to an increase in the potential for parties of the far right to gain traction. I do not think that the policy pursued on the stability and growth pact can be described as anything other than a disaster area because there has been no stability, no growth and no pact. I wrote an article about that in The Timesfive or more years ago, but it is exactly the same now. Nothing changes. That is terribly depressing, which is why we must have the political will to do something about it.

The Europe 2020 strategy is another re-run of the vast amount of verbiage that accompanied the Lisbon agenda, which those involved had to admit was a complete disaster. It is words, words and words; it is nothing to do with the practical question of generating growth. I mentioned Brazil, India and China earlier. The plain fact is that we have to compete with these other countries and it is impossible to do so when looking at the question of unit labour costs in those countries and then looking at the European Union and noticing that Germany had an increase of only 2% in the last 10 years, compared with 30% in most other EU countries. We are in a completely impossible situation. I say this with the greatest respect to my hon. Friend the Financial Secretary, but I did not hear anything in his speech to respond to this situation except for the fact that he said we were getting close to achieving the parameters laid down by the EU for the excessive deficit procedure.

Let me ask a question that I asked before the general election and again during it. It is simply this: what is the true level of our debt? Suppose that the Chancellor of the Exchequer had risen to make his Budget speech in the House the other day and said, “The first thing I must tell the House is that we will have to knock £6 billion off the figures that I am about to announce because we will be bailing out Portugal—and, by the way, our budget contribution to the European Union will rise to £10 billion, so we had better start factoring that in as well.”

Some Members may not know—I do not think many people do—that a spat is going on between the Office for National Statistics and Eurostat about the formulation of our figures in relation to the deficit. I am looking into it, but it is the sort of thing that really troubles me. If we do not get the figures right, and if the Eurostat figures are imposed in a way that makes it difficult for us to accord with the parameters of the rules, that will be another matter that should concern us.

There are many other issues that I could raise, but let me end by dealing with the question of looking to the future. The plain fact is that Germany has now taken pole position in the European Union. The European Central Bank—which has not been mentioned tonight, and to an extent I understand why—has been more or less working in a German environment, if I may put it in those general terms, and has become the owner of vast quantities of bad assets. Another problem is being stoked up there. As was pointed out in a very interesting article in The Economist a few weeks ago, all that is part and parcel of Germany’s pole position at the heart of Europe and also the heart of the problem itself. We cannot afford to work on the basis of a system—to which the Government have foolishly agreed—in which we would not be isolated, but would be engaged in the process of a two-tier Europe because we had agreed to a treaty that will have a serious adverse effect on us. We must renegotiate these treaties and return to a European Free Trade Association-type arrangement, so that we have independence and, with it, the ability to deliver an economy that the British people deserve.