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9 Dec 2008 : Column 475

Natascha Engel: Obviously, I agree. However, a little scepticism does not go amiss— [Interruption.] They are not paying attention. I repeat: a little scepticism does not go amiss. It is important to be vigilant and ensure that the institutions, the Parliament, the elected and non-elected elements and the bureaucratic side of the EU work in exactly the way in which we want and need them to work; otherwise the project will fail, and I do not want that to happen. It is therefore important to keep an eye on everything we do, but in the greater scheme of things we are almost incalculably better off inside the EU as individuals and as a nation than we are outside it. To return to the idea of acting as a large group of nations, we recognise that by working co-operatively. We achieve so much more that way than we do individually, which goes back to the point that my hon. Friend the Member for West Ham (Lyn Brown) made.

I also acknowledge what my right hon. Friend the Member for Leicester, West (Ms Hewitt) said about the importance of Europe in tackling climate change, which is an absolute no-brainer. As individuals, and even as companies and businesses, we can do a lot to ensure that we recycle, help the environment and cut carbon emissions. We need to do that as individuals, and it is massively important that we promote it and make our children do it. However, we can do so much more if we do that within the greater area of the European Union. Not only that, but if we act under the umbrella of the European Union and ensure that all our targets to cut carbon emissions are met Europe-wide, we will achieve things that we could never achieve otherwise—certainly not as individuals and not even as a nation. Also, the power that the European Union gives us as a bloc of 27 states to argue the case with other continents and with America, China and India makes our case so much more powerful. If we set our emissions targets as part of the European Union, we will achieve so much more than we would by ourselves.

The other big point is, again, a personal issue. When I first moved to the UK from Berlin, we lived in a little place called Herne Bay in Kent, on the south coast. I remember thinking, “Wow! This is amazing! I’ve never seen anything like this!” and running towards the water to go for a swim and my mother saying, “No! Stop!” I looked at what was floating in the water and it was absolutely foul. From a personal perspective, the fact that our beaches are the cleanest that they have ever been is important. Again, that change was forced on us, in the teeth of much objection, by the European Union. Given the size and beauty of our coastline, that change, which has happened through our membership of the European Union, is something that we should celebrate.

We also need to recognise that, no matter how much we feel that being in the European Union is like being a member of just a bigger bloc of states, the European Union combines a respect for both the domestic sovereignty of individual member states and their culture. At the same time, however, the European Union celebrates the multiculturalism of the continent as a whole. That is a combination of our sovereignty and the culture of Britain being absolutely sacrosanct, but seen within a much bigger context. We celebrate our culture, but we can also celebrate the culture of others, in a safe and much larger environment.

Mr. Cash rose—


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Natascha Engel: Hooray!

Mr. Cash: The hon. Lady has managed to get me to my feet. On the question of sovereignty, I defend her right to try to say what she is saying, but she completely misunderstands what is really going on with sovereignty. However, I will leave it at that.

Natascha Engel: I thank the hon. Gentleman very much for leaving it at that.

I have spoken about the broad principles of the European Union as a whole. One of the other important founding principles of the EU, of which the hon. Gentleman will be well aware, is the concept of subsidiarity. Subsidiarity, which was important right from the moment that the EEC was founded, is all about ensuring that the EU at no point legislates at an EU or pan-Europe level when things could be done better at the local level. Subsidiarity has meant that we have managed to push things further than even our national Parliaments. We have got much closer to what affects the individual citizen. The concept of subsidiarity, all by itself, has given individuals far more say in how their local communities are run. That is something that the EU has brought us.

It has been incredible to watch Europe evolve from what it was when I was a child to what it is today. I would not have believed even 20 years ago that one day we would have the member states that we have today or that we would make the vast expansion eastwards that we have, with all the positive things that that has brought. Fundamentally—I will finish on this point—for me, the spread of the European Union has been about watching freedom spread. As member states from eastern Europe have come in, we have seen a march of freedom, with people being allowed to speak their minds and move around for the first time in their lives. A lot of them had lived under communism all their lives. Now, for the first time, they can travel around. Seeing them here in the UK and watching them travel round Europe is absolutely wonderful. The threat of war with our European neighbours today is absolutely unthinkable, but not so many years ago it was a serious possibility.

I have one very final point. We have European elections next year, but for all the reasons that I have outlined—the freedoms that the European Union has given us—it is important that we not focus on the tiny, perhaps niggling things that we might find annoying about the European Union. It is important that we go out and promote the European project, say why it is important and make people understand that only by taking part can they have a say in it. I hope that all of us, on every side of the House—or both sides of the House, even—go out in June and campaign for the European elections, to ensure that we secure the highest turnout that we can.

I thank the House very much for listening, and wish it good luck with the rest of the debate.

7.57 pm

Mr. Charles Kennedy (Ross, Skye and Lochaber) (LD): I begin by paying tribute to somebody who was both a personal friend and a political mentor, not least in matters European, and who over three-plus decades contributed to debates of this type in the Chamber. I was with him as something of an understudy when we went right through the Maastricht ratification process—that night-without-end experience—and, indeed, one or two of us who remember it are still here, including you, Sir.


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I refer, of course, to the late, great Lord Russell-Johnston, who passed away earlier this year. He was one of the first Members of this House nominated to the original European Assembly. It was one of the great disappointments—indeed, it was probably the greatest—of his career that he never became a directly elected Member of the then European Parliament. However, he topped off his parliamentary career in Westminster—by this time he had gone to the House of Lords as Lord Russell-Johnston of Carbost, on his native Isle of Skye—by becoming president of the Council of Europe, very much at the peak of his powers.

Whatever view one takes about the European issue—on this Russell was as constant as the northern star, and if occasionally his critics in other parties found him inflexible, I can confirm, having observed him at close quarters for more than 25 years, that he was equally inflexible with whomsoever happened to be the party leader at any given point—he was always a person of impeccable courtesy. British liberalism has lost a great champion, as has European liberalism. These debates—latterly in the House of Lords, but also in this House over so many decades—have lost a great contributor. It is only appropriate to put that on the record tonight.

Mr. Evans: I was a colleague of Russell on the Council of Europe and was with him on one of his last visits, in Yerevan in Armenia, when he was taken ill. Even through his illness, he was determined to leave the hospital, in order to get out on the streets and observe the elections. We had to use all our powers of persuasion to ensure that he did not do so. He was indeed a committed European. He was committed not only to the European Union but to the wider family of the 47 countries of the Council of Europe, and he devoted himself to his duties in the Council of Europe more single-mindedly than almost anyone else I know.

Mr. Kennedy: I am very grateful to the hon. Gentleman for that intervention. It was nice of him, in a personal sense, and appropriate—given his own involvement in the Council of Europe—to bring that insight to the House. It certainly coincides with the experiences that those of us who saw him in other ways had of the man himself.

Today’s debate, which was opened by the Foreign Secretary, immediately follows the mini-summit—if that is the right term—that began the week, with President Sarkozy, our own Prime Minister and the President of the European Commission, President Barroso. I note the level of reassurance that the Foreign Secretary sought to give the House regarding the absence of the German Chancellor. One hopes that his reassurances are correct, because it would be a disaster, at a time of international recession affecting all our individual countries as well as the European Union and the rest of the globe, if there were any dislocation in the approach being pursued by the British, the French and the European Commission, or if there were any significant difference in the approach being pursued by the German Chancellor and her grand coalition. We have to guard against that. I say that from a pro-European standpoint, given the experience of several weeks ago, when the initial, more collective European efforts were unveiled. That strategy lasted barely 48 hours after the conclusion of proceedings
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on the continent, and, at that point, a very different approach was unveiled in Germany. We have to guard against that.

There is a second factor that we must guard against. I welcome the Prime Minister’s pivotal role—or certainly the role that his spin doctors have given him—in co-ordinating European action, given the scale and severity of the financial crisis. It was useful and good that he hosted yesterday’s summit, before attending the main leaders’ summit at the end of the week. However, given this country’s position outside the eurozone—I shall direct the bulk of my brief remarks tonight to that subject—the co-ordination of those policies will not be reliant on one-off, headline-grabbing summit gatherings. It will involve the ongoing working of eurozone Finance Ministers.

The Prime Minister was not noted for his overwhelming public outbursts of Euro-enthusiasm during his time at No. 11 Downing street. However, given the desperately serious situation, I am encouraged that he is apparently so engaged at European level. The fact remains, however, that as long as we are not full members of the group of eurozone Finance Ministers, there will be something of the country club member status about the British role in such proceedings. That is inescapable, because that is what the Government have opted for. I am not arguing about that, because there is no need to. I had that argument with Tony Blair over successive Parliaments many years ago, and we are where we are.

The fact is that it is not sustainable or workable in the long term for Britain to play such a pivotal role at eurozone financial ministerial level when, as a result of our own decision, we are not full-scale members of the club. I am not going to recommend that we change that, because we cannot. I am not even going to suggest that it is desirable for us to do so, because it would not be. However, the Government need to be aware of that, given the status that they have opted for, and given the challenges that they have set themselves in the present context.

I congratulate the newly arrived Minister for Europe, if I may so describe her, on her appointment and wish her well. I am speaking here not so much in a party capacity; that contribution has already been made. I am speaking more on behalf of the all-party—and, indeed, non-party—European Movement, of which I serve as president at the moment. On behalf of its members in all parties in the House, as well as of its membership outside the House, I hope that the Government will continue to look favourably and constructively on its role—limited though it is and modest, but realistic, though our ambitions and aspirations are—in propagating a rational and constructive pro-European case within civic society in Britain. That role has been acknowledged by the Prime Minister from the Dispatch Box.

The European Movement sought more than mere warm words from the Minister for Europe’s predecessor. I do not know whether the file on that matter has made its way to the Minister’s in-tray yet. If not, I am sure that it will do so as a result of these exchanges. The European Movement is now in its 60th year, and it used to receive a subvention direct from the Foreign and Commonwealth Office. It feels rather sore about the fact that “common sense” prevailed during the days of Mrs. Thatcher and—as some members of the Conservative party will be pleased to hear—that subvention was cut off. The organisation has not received a penny since.
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Given the heightened interest in matters European, and the role that members of all parties and those outside the House are seeking to play in the movement, one would have thought that a degree of support beyond mere rhetoric and warm words from the Government at the Dispatch Box and elsewhere could be favourably considered. I am not expecting an answer from the Minister tonight, but I know that representations have been made to the FCO and the Prime Minister from a variety of quarters.

Unsurprisingly, in the context of this debate, reference has been made to the amazing effect that the reappearance of Peter Mandelson invariably seems almost instantaneously to engender in any context. Few have looked more pleased by Peter’s reappearance than the Conservatives, and that was reflected in the shadow Chancellor’s comments last week about Lord Mandelson being rumoured to have been the subject of the President of the European Commission’s remarks about senior British politicians commenting to him favourably on the euro. Incidentally, there has never been the remotest piece of evidence to that effect. I have heard several very senior British Conservative politicians, among others, uttering precisely the same sentiments—not just recently, but over the past 12 months or so—all of whom have high-ranking pedigrees in former Tory Governments and have served in European capacities elsewhere as well. Anyway, the finger is now being pointed at Lord Mandelson, and I am never against his being blamed for things, whether he is guilty or not, because he is a master of that art himself.

The fact is that, over-hyped though some of this might have been, it none the less highlights a significant truth that needs to be addressed a bit more rationally across the party political spectrum. Like it or not—we certainly all regret the circumstances that are giving rise to this—the euro is slowly but surely beginning to become a topic of discussion and comment, if not yet of full-scale political debate, which would not have been anticipated 18 months or two years ago. I am the first to acknowledge that that is happening for all the wrong reasons. We did not want the deepening recession that seems ahead of us to be the trigger, but trigger it has, in some respects, proved to be—not least in the precipitous fall in the level of the pound. When the currency is down more than 20 per cent. since the middle of the last calendar year, it is clear that something very dramatic is taking place. Although the source of the comments to which the President of the European Commission referred has undoubtedly been over-hyped, what cannot be over-hyped are the economic realities that this country faces.

I speak as a non-economist. There are varying interpretations of Britain’s current economic and financial plight, but as fairly as I can read the situation, the many who are contributing to the debate range from the gloomy at one end to the outright apocalyptic at the other. What is not in doubt, whether one’s analysis is gloomy or apocalyptic, is that in coming years, according to the Government’s own recent statements, our economy will not meet any of the Maastricht convergence criteria, so to argue for entry into the euro now would be absurd and premature—but that is not to say that attitudes cannot change with the passage of time.


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My hope is that we can be a little more rational than we were in the past and at least acknowledge that there could be circumstances—only with the full engagement of the British public via a referendum process, so it would be a considerable number of years down the track and certainly not in the lifetime of this Parliament—in which we could revisit the euro issue.

Mr. Cash: I am listening to the right hon. Gentleman, and we have heard that suggestion, too, but for all the reasons I have given, I think it would be disastrous. Does the right hon. Gentleman recognise that, as with the exchange rate mechanism, some people might be deliberately attacking the pound—there is no doubting that it happened on previous occasions—to undermine our position so that some people might have an advantage in trying to argue a way into political union? I am not alleging that, but does the right hon. Gentleman recognise it as an argument that he might have heard somewhere outside the House?

Mr. Kennedy: I would certainly recognise—

Mr. Cash: It happened in the 1930s—

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. Member for Stone (Mr. Cash) has had a very fair ration of the debate and others are waiting patiently.

Mr. Kennedy: None more patient than me, Mr. Deputy Speaker. I dare say that an inference can be drawn from what the hon. Member for Stone (Mr. Cash) says. I am thinking where I might hear such machinations outside this House, and I have to say that the hon. Gentleman is suggesting a level of considered conspiracy that I would usually associate only with the Liberal Democrat annual conference, where the leadership is concerned! The hon. Gentleman should take that as a compliment, because we have some of the best in the business when it comes to judging someone’s motives at any given time.

Matters move on. When the euro was introduced—without, of course, British participation—one un-named Eurosceptic currency trader, to cite someone whom the hon. Member for Stone might approve of, described the euro as “a toilet currency”. That rather reminded me of the Scottish politician who, when the late Donald Dewar published the original devolution proposals, described the envisaged blueprint for Scotland as “a pygmy Parliament”. Times move on, Mr. Deputy Speaker, and the politician who came out with that is as we speak serving as the First Minister in that so-called pygmy Parliament, as he chose to characterise it. I do not know what has happened to the Eurosceptic currency trader, but I suspect that recent events might well have flushed him away, because the euro has certainly not been flushed away.

One is reminded of the leader of the Conservative party during the general election of 2001, when I was leader of my party, too. That former leader spoke, of course, as shadow Foreign Secretary this afternoon. However, the recurrent and repeated slogan of the right hon. Member for Richmond, Yorks (Mr. Hague), as each day passed during the 2001 general election, was that there were only x number of days left to save the pound. Here we are at the end of 2008, and although I
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have been on a different side of the argument from the right hon. Gentleman since 2001, the pound is still very much with us.

The shadow Foreign Secretary rather reminded me at the time of the 40 or so days of the 2001 campaign—and he certainly has in the eight or so years since—of one of the fanatical groups that go up to the top of mountains to say that the world is coming to an end at a certain time one afternoon, only to have to go back down the mountain rather shame-facedly when, funnily enough, the sun keeps rising in the east and setting in the west. The right hon. Gentleman no longer speaks about saving the pound, because it has not gone away, but his comments and predictions today should be taken in that context—his track record is not at all persuasive.

The euro, then, is still with us and I think it can be judged to have been a success. The verdict may be mixed overall, but it remains a success. It has certainly not been the terrible failure that was predicted, any more than those who predicted the end of the pound have proved to be correct. If we recall some of the arguments against joining the euro at the time, we can see that some of the arguments have moved on. Time does not allow me to get into a great debate to disprove some of the arguments, but we were told, for example, about the housing market and mortgage finance and how different they were from the rest of Europe’s. Well, how dramatically different is all that now and how much more different will it become in the period ahead, as we know from the scale and speed of recent events in that sector.

We were also told about the funded nature of British pensions in comparison with continental Europe, but where lies that argument today? Suddenly, there has been a gross realisation within British society of the vast underfunding in our pensions sector. Great emphasis was understandably laid on the importance of the financial services industry. I agree: that is a correct and valid point, but everybody is now singing from the same hymn sheet to the effect that the financial services sector will have to change its ways and conduct itself and its business quite differently from what would have been assumed to be the case only a few years ago.

Then there was the UK’s dependence on oil. Oil production peaked in 1999 and it has almost halved since then. Once again, those economic calculations have moved on.

Not one of those—still less taken together, or even if we added more still—makes a case for membership of the euro. That is not my argument. What they do make a case for, however, is to keep it under consistent rolling review and to prepare better for a more informed public discussion and debate as and when it becomes appropriate to do so—probably a few years hence.


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