Section 5 of the European Communities (Amendment) Act 1993

Part of Oral Answers to Questions — Prime Minister – in the House of Commons at 2:43 pm on 30th April 2014.

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Photo of Graham Stringer Graham Stringer Labour, Blackley and Broughton 2:43 pm, 30th April 2014

It is always a pleasure to follow Jacob Rees-Mogg in a debate on Europe. I tend to agree with his analysis of and almost everything he says on Europe, but, fortunately, I do not agree with his analysis of the British economy. It gives me an almost unique pleasure to be able to vote with my own party on a European resolution, which I have not done for some time, and I was surprised and pleased when the Opposition tabled the amendment.

First, it is also not unique for a Minister to come to this Chamber with almost nothing new to say, but it is unusual, to say the least, for the Minister to explain to the House that she has nothing new to say. There is a reason for that. The House is expected to report on the Budget and what we are doing financially to the European Union. In one sense one might take the rise out of that and have a little joke about it, as we are just sending the documents that we have already produced to the European Union and to Brussels, but we must remember that the European Union is a thin-end-of- the-wedge organisation. If it cannot get what it wants immediately, it will concede a little. It will say that as it cannot control our budgets, which it would like to do as it wants to create a much more centralised European Union, we should send it the details of them. Initially, that happened under the guise of looking for convergence since the euro was created just over 10 years ago. For a House that believes and should believe in its sovereignty, there is danger in that process even if nothing is being added to what is being given to the European Union.

My second point is the obverse of the point made by the hon. Member for North East Somerset. We certainly do not want to converge with the European Union, because the euro has been the biggest machine for destroying jobs in Europe since the 1930s. It has been a complete and total disaster. It is not just a matter of our not wanting to converge with the euro and the rest of the European Union. There is still an insistence within the eurozone on convergence and trying to converge is a disaster for the countries inside the zone and for the United Kingdom, because we want to trade with a thriving economy. While the euro is there, that economy cannot thrive. It is as simple as this. In Germany, the euro is simply an undervalued Deutschmark that is helping the German economy to trade around the world. That is hugely successful and Germany is building up huge trade surpluses. The rest of the eurozone, particularly the Mediterranean regions, is dealing with an overvalued euro that is depressing its economies.

Without the ability to change exchange rates, those countries are effectively in a competitive deflationary situation and it is very unlikely that they will ever be able to pay off their deficits and get into a better economic situation. The only way they could do that is if the German surplus was taken and spent in Portugal, Spain, Italy and Greece, where they have huge unemployment rates and where there is unemployment in what industry is left. It is very difficult—almost impossible—for the eurozone to converge, and that is bad for those countries and, because we want to trade with them, for this economy.

If the eurozone had done better since the banking crisis five or six years ago, this country would not have suffered as much as we have.