European Council — Statement

– in the House of Lords at 3:45 pm on 29 March 2010.

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Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Chancellor of the Duchy of Lancaster, House of Lords, Leader of the House of Lords and Chancellor of the Duchy of Lancaster 3:45, 29 March 2010

My Lords, with the leave of the House I shall repeat a Statement made in the other place by my right honourable friend the Prime Minister. The Statement is as follows:

"With permission, Mr Speaker, I would like to make a Statement on the European Council held in Brussels last Thursday and Friday.

First, I am sure the whole House will join me in paying tribute to Lance Corporal of Horse Jonathan Woodgate from the Household Cavalry Regiment and Rifleman Daniel Holkham from 3rd Battalion The Rifles, who lost their lives fighting in Afghanistan. We owe them the greatest debt of gratitude for their courage and their service.

I know also that the thoughts of the House, and indeed the whole country, are with the Russian people today after this morning's terrorist attack on the Moscow transport network. I have written to President Medvedev this morning to send our condolences to the victims and their families. I pay tribute to the Russian emergency services and the people of Moscow as they respond to this appalling attack. Terrorism is an ever present danger which requires vigilance and the willingness to take tough action in all areas where terrorist groups operate.

The focus of the European Council was on the actions needed to secure growth for the future and on Europe's determination to bring new impetus and momentum to the international negotiations on climate change.

Last week's Budget set out our proposals for the next stage of economic recovery. First, it made clear that the risks to recovery remain real and that we must avoid a premature withdrawal of stimulus measures, instead seeing through our commitment to halve the deficit over four years without choking off the recovery itself. The Council agreed that:

'The economic situation is improving, but the recovery is still fragile', and concluded that, while the deficit reduction plans must go ahead, measures to reduce the stimulus should be taken only,

'once recovery is fully secured'.

This is the position we will continue to follow.

In our Budget, we also set out the actions we must now take to secure jobs and growth by investing in the key growth areas of the future. The Council conclusions agreed that Europe needs,

'to deliver more growth and jobs', to boost Europe's competitiveness and productivity. Before the financial crisis the imbalances within Europe were at an all-time high. The Council agreed that:

'The EU needs to focus on the pressing challenges of competitiveness and balance of payments developments'.

The Council also agreed to develop a new strategy to deliver higher levels of long-term growth and recognised that the key elements of increasing productivity and growth include action on employment, on research and development, on reducing greenhouse gases to boost low-carbon industries, on education and on social inclusion. The European Council will now, once a year and through a leaders' annual economic summit, assess the progress achieved at both national and EU level in delivering on these objectives.

The Council also discussed the economic situation in Greece. Agreement has now been reached by the euro area member states on a set of guidelines for Greece and I am encouraged by the statement from the eurozone leaders that the eurozone will meet its responsibilities. There was no request for the United Kingdom to make any contribution to this programme and none of the arrangements agreed by the European Union Council will see any powers ceded from Britain to the European Union.

One year on from the G20 summit in London, we also discussed Europe's plans for the next G20 in Toronto. The Council agreed that 'rapid progress' is required on the strengthening of financial regulation and supervision within both the EU and the G20, while ensuring a level playing field worldwide. In particular, we agreed that progress is needed on issues such as capital requirements, systemic institutions, financing instruments for crisis management, transparency on derivative markets and implementation of internationally agreed principles for bonuses in the financial services sector. The Council agreed to make rapid progress on these issues internally, concluding work on the new European supervisory framework and in time for the European systemic risk board and the three European supervisory authorities to begin work in early 2011.

We must also agree in Toronto on a co-ordinated approach to levies on the banks to deliver a fairer balance of risk and reward in the financial system. This is something that I have been advocating for some months, and the Council agreed that as part of the G20's work:

'The Commission will shortly present a report on possible innovative sources of financing such as a global levy on financial transactions', and that:

'The Council and the Commission will report back on these issues to the June 2010 European Council, ahead of the Toronto Summit'.

The council also discussed climate change ahead of the first meeting of the new advisory group on climate change financing established by the United Nations Secretary-General, which I am co-chairing with Prime Minister Meles of Ethiopia. Our pledge on climate change finance is a vital first test of the commitment of the developed countries to the promises made in Copenhagen. The council concluded that Europe will rapidly and unconditionally implement its commitment to provide €2.4 billion annually for fast-start finance, and to that end the EU,

'will initiate consultations on practical ways to implement fast start funding in specific areas', presenting a preliminary state of play on its commitments at the Bonn summit. The council confirmed that Europe's objective remains a,

'global and comprehensive legal agreement', and that Europe 'will strengthen its outreach' to other countries to galvanise negotiations in the coming months.

The euro area's economic growth is predicted to be 0.7 per cent this year and next, recovering to 1.5 per cent in later years. By contrast, world growth is projected to be 3.5 per cent, so we need stronger European growth to help deliver stronger growth and new jobs here in Britain.

Europe is the world's largest trading bloc and the world's largest internal market. It offers 500 million consumers for British companies. With 3 million UK jobs linked to the EU and over half of our exports going to the EU, Britain's livelihood is inextricably linked to the success of the European economy. Distancing ourselves from Europe makes no sense and would hold us back. It is by working with, not against, our European partners to deliver jobs and growth for Europe that we will help deliver growth and jobs for Britain. I commend this Statement to the House".

My Lords, that concludes the Statement.

Photo of Lord Strathclyde Lord Strathclyde Leader of the Opposition In the House of Lords, Parliament 3:51, 29 March 2010

My Lords, I thank the noble Baroness for repeating the Statement made by the Prime Minister, which follows one of the most difficult summits in the EU for years. I draw her attention to the statement in paragraph 5(h) of the presidency conclusions that the EU strategy needs a strong external dimension. Despite our objection to the creation of what is an artificial post, will she express our sympathy and that, I am sure, of many noble Lords, to the noble Baroness, Lady Ashton, for the deplorable campaign of back-biting, smear and spin which has been made against her on many occasions in recent weeks?

As for the conclusions, incredibly they do not even mention Greece. Can the noble Baroness explain to the House precisely what was agreed, and on what conditions? The German Chancellor has unfairly been painted as the villain of the piece, but was it not quite reasonable for her to take the view that the German people, who have worked hard in the context of a genuinely prudent economic policy, should not be expected to bail out countries such as Greece that overspend wildly? Will the noble Baroness give an assurance that not a penny will go from us to Greece in an EU deal cooked up behind closed doors? Can she say whether the UK Government believe that an intervention from the IMF is required?

Our Chancellor of the Exchequer has recently announced, privately, that we will be borrowing only £330 billion in this year and the next. Given that, how fiercely did the Prime Minister pound the table about the need to go to the IMF? Is not the reason that the summit was at sixes and sevens the inherent contradictions within the eurozone, which has one single currency but two diametrically opposed views of running an economy? On the one hand, there is a potential disaster extending out from states long accustomed to escaping their problems by inflation and devaluation, from Governments with unsustainable tax rates running bloated and inefficient public sectors and with private industry squeezed out through sclerotic and ever-expanding regulation-states like new Labour's vision for Britain in fact. On the other hand, salvation is sought from well-run countries with strong private sectors and relatively vibrant markets.

Does the noble Baroness agree that there are two ways to deal with this divergence-greater freedom and diversity within the eurozone, which means some countries bearing the consequences of their foolish actions and, if need be, going to the IMF, or yet more integration and a drive to take central powers to control the management of the EU's economies? There is no surprise which way the Commission is pointing. The summit conclusions talk of the need for greater economic co-ordination. How will that work? We even heard talk of a new EU economic government. That, I am sure, would have excited the Liberal Democrats but we on this side are underwhelmed. Will the noble Baroness make clear that a Labour Government would have no truck with a European economic government?

There was some controversy over possible new treaty changes. Will she, as we on this side do, rule out any new treaty change which increases EU control over our economic policy? Does she agree that, following the shameful dropping of their pledge of a referendum on the Lisbon treaty by Labour and the Liberal Democrats, we need a change in the law so that any treaty handing power from Britain to the EU would face a referendum? It is good enough for Ireland so why not for us?

The Commission's Europe 2020 document states that:

"Sound public finances are critical for restoring the conditions for sustainable growth and jobs".

How does doubling and potentially trebling the national debt measure up to that? Britain is borrowing more as a share of our economy than Greece or Portugal. I wonder whether the other leaders crowded forward to hear the words of our Prime Minister on how to control debt or was Britain relegated to the sidelines, lurking near the tray marked "Problems pending".

The European Commission says "a number of countries" may have to start tackling their deficits this year. Given that Britain and Ireland have the worst budget deficits in the OECD, to which countries could it have been referring? The early-warning systems show that debt is threatening our recovery; sterling has devalued 12 per cent against the dollar since November; Britain has one of the weakest recoveries in the world; and no other European county has more unemployed. New Labour clearly isn't working. With Britain doing so badly, is not the right answer not more central control but the unleashing of enterprise with tax cuts for new businesses, better skills and training and less red tape? Why are the Government raising taxes on small businesses and on 30 million people?

This summit should have marked the stripping-away of illusions within the EU's spendthrift states and centralising bureaucracy. But the line sketched out by the EU and supported by this Government is for more tax, more interference and more central control. That way lies no future for the young unemployed, no prospect for the small business, and no reward for those who work hard and ask only for a fair reward. This summit had no answers relevant to the economic future of our country. It is time for change in Europe and change at home. I hope that the noble Baroness as Leader of the House and her colleague, the noble Lord, Lord Mandelson, will tell the Prime Minister to get on with it and let the British people have their say on the most wasteful Government in modern times.

Photo of Lord McNally Lord McNally Leader in the House of Lords, Spokesperson for Constitutional Affairs , Liberal Democrat Leader in the House of Lords 3:58, 29 March 2010

My goodness, "New Labour isn't working"-the Saatchis are back in business quicker than any of us thought. I am pleased that the Prime Minister echoed the condolences for the loss of life by British troops in Afghanistan mentioned at Question Time in this House. We also welcome the message to Moscow. London shares that city's pain. We know that attacks on public transport are a particularly cruel and indiscriminate act of terrorism.

We welcome the fact that Europe has held its nerve at this summit in terms of the stimulus needed for the economies of member states. Quite clearly a Europe working together to promote more jobs, more growth and more competitiveness is in all our interests. I hear what the noble Lord, Lord Strathclyde, says about the eurozone agreement on Greece, but we cannot on the one hand be outside the eurozone and on the other be too picky about how it deals with the problem. It is clear that it has acted in a co-ordinated way. It would not be in Britain's national interest for there to be a collapse of the eurozone. While acknowledging that we are on the outside, we welcome the fact that it has been able to act in such a co-ordinated manner. Although I concur that it may not be the right time to enter the eurozone, I find it a bit rum that the party that was once of "sound money" now seems to think that there is some merit in a 25 per cent devaluation as a means of economic policy.

We welcome the commitment to low-carbon industries, but I again express concern that British investment may be too little, too late, and that we might end up being dependent on Chinese, German, Danish and American technologies to deliver our green economy. We welcome co-ordination of plans for the next G20. It is essential that we use a united European muscle to achieve global agreements on policing of the financial services industries. We need the strength and co-ordination of Europe if we are to have proper, verifiable agreements on climate change.

I endorse what the noble Lord, Lord Strathclyde, said about some of comments that have been made about the noble Baroness, Lady Ashton. However, congratulations should be offered to Mr Van Rompuy. As a Financial Times headline said:

"Van Rompuy emerges with his reputation enhanced".

Rushing to judgment on some of those appointments may prove to be wrong.

I congratulate the Prime Minister on pointing out quite firmly, as did many of us on these Benches during the passage of the Lisbon treaty, that the great opportunity offered by the Lisbon treaty was to bring closure to a process of constitutional and rulebook change that had gone on for almost a decade. It would have been absurd if we had listened to the siren voices from the Conservative Benches, who would have left Europe rudderless and still debating the rulebook, when, as the summit has demonstrated, it needs to get on with dealing the practical problems facing both the Community as a whole and the individual countries.

Perhaps I may respond to a remark that the noble Lord, Lord Strathclyde, always makes. I usually sit here patiently without responding, but since we are getting to the end of this Parliament, I should make it clear that the Liberal Democrat commitment was to a vote on a new constitution. If a new constitution had been presented, we would have supported a supported a referendum. However, the Lisbon treaty was treated as every other amending treaty under Conservative and Labour Governments since we joined the European Community. Let us have an end to that canard; I know that it will be used on the doorstep. What we did by getting the European treaty through was put Europe in the right shape to deal with climate change, the recession and the management of financial services industries. We do not regret it, because the alternative would have been a Conservative strategy which would have left Europe in disarray.

The House, and the country, should ask what disarray Europe would find itself in if, by some misfortune, a Conservative Prime Minister were at the next summit, throwing his weight around to disrupt Europe. At a time when Europe needs a co-ordinated effort to face global problems, a new Conservative Government would be unable even to sit in the same group as the Conservative Governments of France and Germany. The country should pause for thought before electing a party which seems set on marginalising itself in the councils of Europe at a time when we need European unity. We should ask whether that is the kind of Government we want to send. I ask the Conservatives whether we will have to go again through the long, painful learning curve, with Conservative Ministers going across to Europe as a kind of bovver boys and then having to learn that British interests need them to co-operate within Europe. All these bellicose statements from the Conservatives would not wash for one minute in Brussels, and they no it. It is time that they faced up to this and, instead of trying to mislead the country about where our interests lie in Europe, stood up to their responsibilities there.

Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Chancellor of the Duchy of Lancaster, House of Lords, Leader of the House of Lords and Chancellor of the Duchy of Lancaster 4:05, 29 March 2010

My Lords, I am grateful to both noble Lords for their general support for this Statement. Like the noble Lord, Lord McNally, I thank the noble Lord, Lord Strathclyde, for what he said about the deplorable campaign of back-biting and spin against my noble friend Lady Ashton. We as a House and Members of this Parliament should be proud of what she is doing in the European Union. She is one of us, and we are very proud of that.

It is entirely sensible that the issue of Greece was dealt with by the euro area and not the European Council as a whole, and the euro area itself put out a very clear, firm statement. I do not think that we can read anything into the fact that there was no mention of it in the Statement. As the euro area statement makes clear, there has been no request from Greece for financial support; we welcome the euro area's clear restatement of its willingness to take determined and co-ordinated action if needed to safeguard financial stability in the euro area as a whole. There have certainly been no requests for any contribution from the UK and all these things are a matter for the euro group.

The euro area member states reaffirmed their willingness to take determined and co-ordinated action if needed as part of a package involving substantial IMF financing and a majority of European financing. The IMF is therefore a matter for them, not us.

The noble Lord, Lord Strathclyde, suggested that the problems of the euro zone were similar to those of the UK and that the euro zone was sclerotic, et cetera. I firmly reject the criticisms of what is happening in the UK. The Chancellor last week set out very clearly his plans for debt reduction in the UK, and when the Prime Minister was in Brussels last week I am sure that he was warmly congratulated on the action that we are taking. I point out to the noble Lord that in this country our unemployment rate is 7.8 per cent whereas in the rest of the euro area it is well over 9 per cent. That would suggest that we are doing something right in this country.

The noble Lord asked about greater economic co-ordination. As the conclusions state, the primary vehicle for better co-ordination should be an annual economic summit that looks at macroeconomic, microeconomic and financial service issues in the round. That is why we think that greater economic co-ordination is necessary. We need more growth in the euro area, because we are part of the European Union and most of our trade is with the European Union, so we need a healthy, growing European Union.

Any treaty change would need to be unanimous; I respectfully point that out. The noble Lord, Lord McNally, was right to suggest that Europe is working together, and that it is in all our interests. I noted with interest what he said about the prospect of a Conservative Government and their workings in the European Union. It is interesting that, in relation to European proposals which have an effect on hedge funds, the Prime Minister was able to ring up the Prime Minister of Spain and other Prime Ministers to say, "We need more thought and discussion in this area before we can reach an agreement". That is testament to the good relationships that we in this country have with our European partners.

The noble Lord, Lord McNally, is right about the need for more European consensus within the G20 to ensure a more level playing field globally, and that we need to strengthen and co-ordinate what we do within the European Union to progress the agreements that have already been reached on climate change.

It was a very good and successful summit, not just in terms of what happened in the euro group in relation to Greece, but in terms of the strategy for jobs and growth. As I said, I think that most people in the European Union agree with the action that we in this country are taking. The statement also agreed that the exit from the exceptional support measures adopted to combat the crisis will be important, once fully secured, but that the path we are currently taking in the UK is the right one.

Photo of Lord Waddington Lord Waddington Conservative 4:12, 29 March 2010

Does the Minister agree that Britain's contribution to the EU in 2010 will be double what it was in 2009? What proportion of the increase is due to the sacrifice by the Government of part of our rebate and, as it was sacrificed in return for a promise of reform of the common agricultural policy and no such reform has taken place, did the Prime Minister take any steps to secure the return of our rebate? If not, why not?

Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Chancellor of the Duchy of Lancaster, House of Lords, Leader of the House of Lords and Chancellor of the Duchy of Lancaster

My Lords, I do not think that reform of the budget was on the agenda for this Council, but it is clear that the Commission has been asked to produce a paper-before the autumn, so that it can be discussed by the Heads of State and Heads of Government before the December Council-on the future budget, which will include CAP reform.

Photo of Lord Lea of Crondall Lord Lea of Crondall Labour

Does my noble friend agree that the enlargement of the European Union, supported by the party opposite, has some consequences for net contributions of the richer countries? Therefore, it is about time that that is acknowledged by people who wish to make that point. I am among those who strongly welcome the arrangements made on future financial co-ordination and, indeed, on Greece. I notice that the noble Lord, Lord Strathclyde, described the deal as being "cooked up behind closed doors". In the spirit of consensus, will my noble friend go outside after this, along with the noble Lord, Lord McNally, and agree that the wash-up next week will be conducted in full view of everybody, including the television cameras, in Westminster Hall? If not, why not?

Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Chancellor of the Duchy of Lancaster, House of Lords, Leader of the House of Lords and Chancellor of the Duchy of Lancaster

My Lords, I agree with my noble friend about the advantages we all draw, within the European Union, from enlargement. We are all agreed on that, but of course it has budgetary implications. I do not think that there was a deal "cooked up behind closed doors". There were discussions at the European Council, and the agreements made by the European Council are clearly on paper before us today in the statement and the conclusions of the Council. As for the wash-up, it is a tried and trusted process which has served Parliament well in the past and I am confident that it will serve Parliament well in the future.

Photo of Lord Hannay of Chiswick Lord Hannay of Chiswick Crossbench

My Lords, will the Minister forgive me for saying that I find it fairly distasteful that the Government and the Opposition are vying for the role in the biblical parable of those who pass by on the other side? I do not see why we cannot say now that we support the solution reached by the European Council under which Greece will, if necessary, go to the IMF and receive support from its European partners. Can we not say that that was a good solution, as I believe it was?

I welcome the conclusions on climate change. Does the rather obscure reference in the conclusions to using other fora than the full 192-nation forum for the preparation for Cancun include the G20 meetings that will take place before then? Will the Government make the most use of them to try to achieve something better than the Copenhagen accord? Will the Government be putting in ideas of their own on the verification and monitoring of commitments entered into for climate control? There is a paucity of such proposals on the table at the moment but, without them, sustainability of any agreements reached is unlikely to be achievable.

Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Chancellor of the Duchy of Lancaster, House of Lords, Leader of the House of Lords and Chancellor of the Duchy of Lancaster

My Lords, with regard to Greece, I was not seeking to suggest that we were just passing by on the other side of the road. This is a matter for the eurozone. I said earlier, although I cannot find my note at this moment, that we thought that the agreement on Greece that was reached was a good thing but, as Greece is a member of the eurozone and we are not, it was more appropriate for that agreement to be made by the members of the eurozone.

There is a lot more to be done on climate change. I draw noble Lords' attention to the meeting that the Prime Minister is jointly chairing with Prime Minister Meles later this week. I pay tribute to the work that the noble Lord himself has done in the area of verification and monitoring and I confirm that the Government will be putting our own ideas into the process.

Photo of Lord Ryder of Wensum Lord Ryder of Wensum Conservative

My Lords, will the Leader of the House please take this opportunity to compliment Mrs Merkel on the robust attitude that she has taken to the financial plight of Greece during the past few weeks? If she is not prepared to do so, why not?

Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Chancellor of the Duchy of Lancaster, House of Lords, Leader of the House of Lords and Chancellor of the Duchy of Lancaster

My Lords, Chancellor Merkel was doing exactly what the Chancellor of Germany should be doing: as a member of the euro group and as Chancellor of Germany, she was looking for the best possible outcome for Germany and for the euro group. I think that she did a splendid job in both cases.

Photo of Lord Foster of Bishop Auckland Lord Foster of Bishop Auckland Labour

My Lords, does my noble friend share my delight that a deal was cooked up behind closed doors on behalf of Greece, since the alternative might have been the collapse of the single currency?

Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Chancellor of the Duchy of Lancaster, House of Lords, Leader of the House of Lords and Chancellor of the Duchy of Lancaster

Indeed, my Lords, and it is in no one's interest for either Greece or the single currency to collapse. As my noble friend says, we are delighted that some agreement has been reached.

Photo of Lord Teverson Lord Teverson Spokesperson and team leader for Climate Change and Energy

My Lords, the very last conclusion in the conclusions document, point 15, says that there will be a special meeting of the European Council in September to discuss how the European Union can better engage with its strategic partners on global issues. That suggests to me that the European Council felt that there were a number of challenges in certain areas. Climate change is clearly one of those and we need a better performance on that than we had at Copenhagen. What are the others that the council is concerned about?

Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Chancellor of the Duchy of Lancaster, House of Lords, Leader of the House of Lords and Chancellor of the Duchy of Lancaster

My Lords, it is cross-cutting issues such as climate change and international terrorism that we need to discuss with our partners in, say, China and the Middle East. The noble Lord mentioned climate change. One of the important agreements reached at the summit last week was that not only we as the European Union but individual member states should be doing more to engage with developing countries on that issue.

Photo of Lord Lawson of Blaby Lord Lawson of Blaby Conservative

The noble Lord the leader of the Liberal Democrats, with his customary clarity, has cut through the fudge of his party leader's reactions as to what the Liberal Democrats would do in the event of a hung Parliament. He made it absolutely clear that they would unhesitatingly throw their weight behind the continuation of a Labour Government.

May I ask the Leader of the House two things? First, did the Prime Minister make it absolutely clear that the strength of the City of London as a major, global financial centre is a fundamental national interest? While he can have discussions with the Prime Minster of Spain and others about the new regulations, the new system of bank supervision and the structural changes, which undoubtedly are required, nevertheless anything that is put forward that would damage the City of London as a global financial centre is unacceptable to us. In the best Gaullist way, we would not abide by it.

Secondly, on the question of Greece, the unanimous view of the eurozone-I think that it is the view of the Greek Prime Minister, too-is that the Greeks must put their fiscal house in order without delay. This has been agreed whether Greece needs help from the IMF or from other eurozone countries, but it must be done without delay. Does the Prime Minister agree with that? If so, why does he think that in the case of the United Kingdom, which has an even bigger percentage deficit than Greece, there must be a delay?

Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Chancellor of the Duchy of Lancaster, House of Lords, Leader of the House of Lords and Chancellor of the Duchy of Lancaster

My Lords, there are two points. On the City of London being of fundamental national importance, I am confident that every time the Prime Minister speaks of global financial issues, he makes the case that we have a jewel in the crown in the City of London and that we have to do everything that we can to preserve it, but in a regulated way. We are in favour of financial regulation but not financial protectionism. That is the basis of everything that we say and agree to. At the moment, he is working with our European partners to find the best way forward.

In respect of reducing the deficit, the Chancellor provided us last week in the Budget with a clear route map. We have said on hundreds of occasions that we are going to reduce the deficit and that, in four years, we are going to halve it. This is what we are going to do, but we also recognise that, if we were to cut immediately, as the noble Lord's party would wish to, we would endanger many livelihoods and jobs and many people would have their houses repossessed. We cannot put at risk the recovery and we are not prepared to do that.

Photo of Lord Soley Lord Soley Labour

I cannot imagine many actions that would damage the City of London much more than imposing a tax on banks unless it was shadowed by a tax on banks in other countries. That brings me to my question to the Leader of the House. The preparations for G20 are important, none more so, perhaps, than those on the regulation of international financial markets, which would help enormously to prevent some of the troubles that we have had in the last year or two. If we can get as much agreement as possible, as we seem to be getting within the EU, we shall go into those negotiations with a much better chance of enhancing and improving on the old Bretton Woods agreement in a way that recognises the global market in which we now operate. That progress is important; in a sense it is one of the most important things in this Statement today.

Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Chancellor of the Duchy of Lancaster, House of Lords, Leader of the House of Lords and Chancellor of the Duchy of Lancaster

I certainly agree with my noble friend that we need a strong European position that we can take to the G20, because what we must eventually do is adopt a globally co-ordinated position. If we were to tax banks just in this country, that would be detrimental to us, so we need a globally co-ordinated agreement.

Photo of Lord Stoddart of Swindon Lord Stoddart of Swindon Independent Labour

My Lords, I was pleased to hear the Leader of the House say how much better Britain had done outside the eurozone than those countries that are in the eurozone. That confirms what many of us who were in favour of retaining the pound and our economic independence have been saying. The noble Baroness glossed over the question of economic governance, or government. The President of the Council, Mr van Rompuy, as well as representatives from Germany and France, have all referred to the need for European economic government. We already have to make a return of our financial and economic situation every year; indeed, we had interference from the European Commission over our deficit. I would like the assurance that we will not go any further into economic government, which is the aim of so many other countries in the European Union.

Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Chancellor of the Duchy of Lancaster, House of Lords, Leader of the House of Lords and Chancellor of the Duchy of Lancaster

My Lords, there are two points. I spoke of how successful we in this country are in terms of unemployment, contrasting that with what is happening in the eurozone. Economic governance-there has been some dispute about this, but in English we talk about economic governance, not economic government-is again an issue for the euro group. There was an agreement to set up a task force within the euro group, not within the EU 27. Our view is that there should be strong economic co-ordinated action but not economic government.

Photo of Lord Woolmer of Leeds Lord Woolmer of Leeds Labour

My Lords, does my noble friend agree that, in the case of the alternative investment fund managers directive currently under discussion in the European Union, the position of London is not being fully and properly balanced? If the European Union progressed to use a majority voting system to outvote the United Kingdom, that would be a very damaging position for it to take. Secondly, on the G20, does my noble friend recognise that the Americans are also greatly concerned about the potentially protectionist note that the European Union is in danger of taking? That will have an adverse effect on not only the City of London but also international finance.

Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Chancellor of the Duchy of Lancaster, House of Lords, Leader of the House of Lords and Chancellor of the Duchy of Lancaster

My Lords, I am aware that this is under the majority voting system; I am also aware of the position of the Americans. That is why, when it comes to these potential regulations for the City of London, it is important that the key people sitting around the table continue to keep talking. That is exactly what is happening, thanks to the intervention of my right honourable friend the Prime Minister, who has said that we should keep talking about these issues until we can find a solution that is mutually acceptable.

Photo of Lord Brooke of Sutton Mandeville Lord Brooke of Sutton Mandeville Conservative

My Lords, I have just spent a long weekend in Toronto. In the context of the next G20 summit, will the Leader of the House accept that, as of now, it is not the case that the people of Toronto can find nothing else to speak about? However, as an admirer of the Canadians, I am confident that they soon will.

Photo of Lord Grenfell Lord Grenfell Principal Deputy Chairman of Committees

My Lords, does my noble friend agree that while it is true that we are not being asked to provide funds for Greece, it is none the less also the case that when people shout that what goes on inside the eurozone is nothing to do with us, they are profoundly misguided and inaccurate? What goes on inside the eurozone affects us very much indeed. A failed Greece will have a very bad impact on those members of the European Union that are not members of the eurozone. Perhaps it would be wiser to take a sympathetic view of what the eurozone is trying to do to save Greece on the understanding that, if it fails, the impact on us will be very unfortunate indeed.

Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Chancellor of the Duchy of Lancaster, House of Lords, Leader of the House of Lords and Chancellor of the Duchy of Lancaster

My Lords, those are very wise words. They echo other sentiments that have been expressed around the Chamber today. I hope that I have not taken an unsympathetic view towards what is happening in Greece or the agreement that was made. I merely sought to point out earlier that the agreement was quite properly taken by the members of the euro group. It was a good agreement but we fully understand that what happens in Greece and the rest of the euro group has profound implications for the rest of the EU 27. We need a healthy European Union.

Photo of Lord McNally Lord McNally Leader in the House of Lords, Spokesperson for Constitutional Affairs , Liberal Democrat Leader in the House of Lords

My Lords, before this session comes to an end, I ask for protection from the Leader of the House. I would ask the Whip not to interfere; this is an important matter. I ask the Leader of the House, in her capacity as Leader of the House, what recourse I have to correct the completely erroneous statement made by the noble Lord, Lord Lawson, that the policy of the Liberal Democrats would be to send Mr Brown to the next European summit. The policy of the Liberal Democrats, in the national interest, would be to send Mr Nick Clegg to the next European summit. In the mean time, our policy is balanced. That is on the record.

Photo of Baroness Farrington of Ribbleton Baroness Farrington of Ribbleton Government Whip

My Lords, it is the job of the Whip on duty to ensure that the rules of the House are kept. In the past I reprimanded the-quite fearsome on occasions-Baroness Blatch, who had sought to speak from the Back Benches, having spoken from the Front. The noble Lord, Lord McNally, knows that, under the rules of the House, his noble friends behind him are the only ones who can defend him.