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Banking Union and Economic and Monetary Union

Part of Free School Meals (Children Over the Age of 16) – in the House of Commons at 6:14 pm on 6th November 2012.

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Photo of Brooks Newmark Brooks Newmark Conservative, Braintree 6:14 pm, 6th November 2012

I am delighted to follow my hon. Friend Jacob Rees-Mogg, who is perhaps one of the most articulate Members on the Government Benches. I am not going to argue the whys and wherefores of whether we should bring financial regulation back to this country. That is an important question, and I totally agree with my hon. Friend Andrea Leadsom on it, but I am going to argue on the narrow question before us—namely, the substantive motion and the amendment.

As a non-eurozone member, we will not be participating in European banking unification. I agree, however, that we need to ensure that the measures taken by our European partners do not adversely affect British interests, particularly in the banking and financial services sector, given its importance to UK plc. The City of London is the pre-eminent financial services centre not only in Europe but in the world, and we want it to remain so. Remaining globally competitive is critical to the United Kingdom and to the eurozone, and it is important that the single supervisory mechanism for the eurozone should function effectively. As long as we remain outside the eurozone, the mechanism will be aimed primarily at eurozone banks and not at our own financial institutions. As many colleagues have pointed out, however, there could be unintended consequences at some future date that could have an impact on us.

The Minister has given us assurances today that the Government will seek to secure sufficient changes to the European Banking Authority voting arrangements to protect the interests of member states, such as the UK, that are not members of the eurozone and that do not choose to enter into the proposed co-operation arrangements. I am therefore happy to support the Government’s substantive motion.

My hon. Friend Mr Cash has tabled an amendment to the motion. I congratulate him on his leadership of the European Scrutiny Committee and on his tenacity, perspicacity and overall determination to protect Britain’s interests. He has always been a strong defender of our interests and I congratulate him on that. In fact, I wholly endorse the opening line of his amendment, in which he welcomes

“the Government’s desire to seek safeguards for the UK”,

and the reasonable tone that he adopts in asking the Government to use their best endeavours. That is reasonable, and it is not didactic. I have a problem with the second part of my hon. Friend’s amendment, however, in which he calls on the Government to use their veto to

“ensure that the powers of the Governing Council of the European Central Bank are not unlawfully delegated to the Single Supervisory Mechanism without an amendment of the treaties”.

We have heard from the Minister’s mouth today that we will not proceed unless the arrangements are legally robust. I have had no insights into the matter, and I agree with my hon. Friend the Member for North East Somerset that it would be good to see the leaked document, but, unlike many others, I have not had the privilege of doing so. I fear, therefore, that the amendment is somewhat tautological, if not unnecessary, in that the Government would neither support an illegal arrangement nor table a motion that was not in order. I will therefore put my faith in the Minister’s assertion that there is nothing illegal about the proposed arrangements and that he would not waste Parliament’s time by proposing anything that was illegal. I will therefore support the Government’s motion and vote against the well meant but unnecessary amendment that my hon. Friend the Member for Stone has put before us today.