Examination of Witnesses (Questions 1-19)
RT HON.
DAVID MILIBAND
MP AND MATTHEW
RYCROFT
10 DECEMBER 2008
Q1 Chairman: Foreign Secretary and Mr.
Rycroft, thank you for coming this afternoon. We appreciate that
this is a very busy week for you—a very busy day in fact—but
perhaps we can probe in more detail the issues that were touched
on in the debate yesterday, and some of them in the debate that
you have just left, in the Chamber.
I shall begin by going straight into one of
the big issues that will be under consideration at the European
Union Council, which is what to do about the Irish rejection of
the Lisbon treaty. Can you set out for us what you expect to come
from the Irish Government when they meet you? If they make a decision
to hold a second referendum, what are the implications for the
Lisbon treaty and for the process within the European Union?
David Miliband: Good afternoon, Mr. Chairman.
Matthew Rycroft is the director for Europe in the Foreign Office
and is here to answer the difficult questions, so I had better
hand over to him straight away.
No, I cannot tell you what I expect the Irish
to say, first because they have not told us yet, and secondly
because if they had it would probably not be wise for me to tell
you, but in respect of the second question, we should wait and
see. It is always dangerous to answer questions that begin with
"If". We have said all along that the treaty can come
into force only if it is ratified by all 27 countries, and that
we do not support a renegotiation of the treaty that passed through
Parliament. We do not want to have a further parliamentary passage
of a new Lisbon treaty.
We look forward to Prime Minister Cowen's report
to the European Council tomorrow; we can then discuss what he
plans to do. I have never described this as an Irish problem;
it is a decision of the Irish people, and the Irish Government
have to decide how they want to respond. They have conducted a
rather impressive set of debates involving all parliamentarians,
and they have done a lot of study and dissection of Irish views.
We should wait and see what they propose.
Q2 Chairman: So, you do not necessarily
expect the Irish Government to come forward this week with a proposal
for a second referendum.
David Miliband: We should wait and see.
Q3 Chairman: If they did—I
know that I am asking you a hypothetical question—what do
you think the likely time scale would be, and would it have any
implications for the European Parliament elections due to be held
in June and also for the composition of the Commission, which
clearly would be different under the Nice treaty from what it
would be under the Lisbon treaty?
David Miliband: I can address the question of
the European elections, because in a way that is not now dependent
on the Irish decision, to the extent that I think that everyone
now accepts that the June elections next year will have to take
place on the Nice basis. That has implications especially for
countries such as Spain, in terms of the number of MEPs. I do
not think that, in that respect, people in this country would
notice that much difference, but European Parliament elections
will take place on a Nice basis, and we will just have to wait
and see what the Irish propose. If they propose to hold a second
referendum, the timing will follow.
Q4 Chairman: What about the Commission?
David Miliband: In a way, all of this is dependent
on whether the Lisbon treaty comes into force. At the moment,
24 countries have ratified it or deposited their articles of ratification
in Rome. Three of them remain to do so, and the treaty can come
into force only when all 27 ratify it. When I first started saying
last July that the treaty would come into force only when all
27 had ratified it, people thought that it was just a boring or
unimportant thing to say, but it is actually quite an important
thing to say. On the remaining countries—the Czech Republic,
Poland and Ireland—we have to wait and see what their Governments
decide and what their Parliaments decide.
Q5 Mr. Hamilton: The problem is that
the treaty cannot come into force unless those three countries
ratify it. Two of them may well, but Ireland cannot, because its
referendum, held under the terms of the constitution, said that
its people rejected it. If, therefore, there is a second referendum—I
know that it is another "if"—there is a problem,
is there not? That second referendum could take place only on
the basis of amendments to the treaty. We could not say, "Well,
you got the answer wrong last time; let's have another decision—this
time, the right one," on the same treaty; but if the treaty
is amended in any way, surely all the other nations in Europe
will have to ratify it. Do we not have a Catch-22 here?
David Miliband: I do not think that we have
a Catch-22. We have the position of the British Government, which
is that we have ratified it and we are not now negotiating a new
Lisbon treaty to put through the British Parliament—that
is point 1. Point 2 is that the Irish Government have to decide
how they respond to the decision of the Irish people, and the
Irish Government can do whatever they like, but if that involves
constitutional change, it has to go back to the Irish people.
Let me pick out something else that I said last
July. At the time, it may not have seemed to have any implications,
but it did. I said first that the treaty cannot be ratified unless
all 27 countries ratify it; and secondly, that no one should bully
the Irish, and that we should give them time and space to make
their own decision. I was applauded for saying that in July. I
know that impatience can dampen or curb applause, but we should
continue to say that. It is for the Irish to decide what they
are going to do, and we should give them the space to do that.
Once they have said what they are going to do, we can then discuss
it.
Q6 Mr. Hamilton: You are absolutely
right. No one would disagree, I hope, and we applaud you for saying
it, but the fact is that the treaty cannot be ratified unless
the Irish agree to it—you said so yourself, and we all agree
with that—but they cannot have a second referendum unless
there are changes to the proposition, surely? It is for them to
decide.
David Miliband: It is for them to decide.
Mr. Hamilton: But it has an implication for
the whole Lisbon treaty—for all the remaining 26 European
nations.
David Miliband: No. It has implications for
the rest of us only if it changes the Lisbon treaty.
Mr. Hamilton: Changes it or rejects it for all
of us, because we have all ratified it, apart from the three that
you mentioned. The Irish cannot ratify it unless they have a second
referendum, so if they do not, none of us can adopt it—it
is dead.
David Miliband: It is dead only if one or more
of the 27 do not pass it, and—I keep saying this—all
27 have to ratify it for it to go through, so no one should have
any worries, because there is no subterfuge that could get it
in. Unless every country ratifies it and deposits their articles
of ratification, it does not come in. The Irish have to decide
what they will do, and we are waiting for them to do that. I am
saying to you that we are not going to negotiate a new Lisbon—a
Lisbon 2—that then has to come back before the British Parliament.
We decided our view, Parliament ratified the
treaty, we have deposited the articles of association, and as
far as we are concerned, that is the end of the story. The Irish
can then decide what they want to do. I do not want to be drawn
too far into this, but I should point out that Irish research
shows pretty clearly that the Irish debate has mainly been about
issues that have nothing to do with the Lisbon treaty. There has
been quite a long debate about abortion, which is not covered
by the Lisbon treaty, and about neutrality, which is not covered
by the Lisbon treaty, and that is something that may be—
Q7 Mr. Hamilton: May I take you back
to the issue that the Chairman raised earlier about the Commission
having to be replaced or a new Commission having to take office
in October next year? Can it do so legally without the ratification
of the Lisbon treaty, or will it simply be a new Commission under
the terms of the Nice treaty?
David Miliband: It would be a new Commission
under Nice because Lisbon would not have come into force, assuming
it has not come into force by next October. [Interruption.] This
must be completely incomprehensible to those watching on television.
Q8 Mr. Heathcoat-Amory: You are complicit
in a system that is requiring a second referendum in Ireland when
you have not given the British people a single vote. Are you not
really ashamed not to be accepting the finality of the Irish decision?
You have said that you will not countenance any textual change
to the treaty, so no legally binding assurances can be given to
the Irish as part of the treaty because that, as Fabian Hamilton
said, would require re-ratification here, and you say that you
are not going to do that. You are in fact putting the Irish in
a corner so that they have to vote on the same text again—twice—when
you did not give us a vote at all. Can you not see the shameful
contradiction in that?
David Miliband: I am tempted to ask, as I have
done on many occasions, whether you are ashamed to be the person
who whipped people through to ratify the Maastricht treaty without
a referendum and who is now arguing for a referendum, even though
the Lisbon treaty involves the transfer of much less power than
the Maastricht treaty did. Let us not use the word "shame".
You have a long record in Parliament, and a distinguished record
as a Europe Minister and as one who helped get Maastricht through,
for which many thanks are due, so let us not get into the shame
game. With regard to the actual Irish position, this is to respect
the Irish people and Government. They have to decide what they
want to do. If they decide that they do not want to do anything,
the Lisbon treaty falls and that is the end of the story.
Mr. Heathcoat-Amory: Since you have accused
me of effectively breaking a manifesto promise, as you have done,
I will reply by saying that there was no manifesto promise to
give anyone a referendum on the Maastricht treaty. There was a
manifesto promise by your party to give people a vote on this
treaty, which you have broken.
David Miliband: I am sorry, but that is not
true.
Q9 Mr. Heathcoat-Amory: Coming back
to the substance of it, it is not only a matter of respecting
the Irish Government, but of respecting the Irish people. You
and other Ministers constantly say that we must close the gap
between the rulers of Europe and the people of Europe. Well, the
people of Europe, the ordinary citizens of Ireland, clearly expressed
with a big majority and turnout that they did not want that legal
text. You are colluding in a system whereby you are forcing them
to vote again on the same text, so is it not completely hypocritical
for you to pretend that you want a more democratic Europe that
is closer to its citizens, which is what the Government signed
up to in the Laeken declaration, when you are doing this?
David Miliband: No it is not. It would be hypocritical
if I signed up to the rules of a club and then denounced them.
I am playing by the rules of the club, which are that the treaty
does not come into force unless all 27 countries ratify it—24
have—and that it is up to the Irish Government to decide
how they want to proceed with ratification, and we are defending
that. The truth is that if you want to bridge the gap between
Europe's citizens and Europe's politicians, the European Union
needs to address what people are actually concerned about. That
gap has emerged over the past seven years because Europe has been
obsessed with internal institutional reform while, in fact, the
pressing issues of climate change, security, defence policy and
economic policy, on which Europe has something to say and do and
which it has been doing with increasing vigour and effectiveness,
get obscured, and that is why the sooner we resolve those institutional
questions once and for all and address the practical and substantive
issues, the better.
As it happens, I was passing through this country
yesterday morning and switched on the "Today" programme
and heard two positive stories about the European Union: one was
about the European security and defence policy mission to tackle
piracy in the gulf of Aden and the other was about the deployment
of the European rule of law mission, EULEX, in Kosovo. Admittedly
it was on the BBC, so one can expect it to be neutral about such
affairs, unlike some other commentators. Those are the things
that will, in the end, bridge the gap between people and Europe's
institutions.
Q10 Sir Menzies Campbell: I have
a lot of sympathy with the contents of that last answer. A little
earlier, before you became embroiled in accusations of shame and
collusion, you were playing with a very elegant dead bat with
regard to the Government's attitude to the present position, and
the Government's likely attitude in the event of Ireland's not
proceeding to a further referendum. I cannot imagine that Mr.
Rycroft does not spend a great deal of his time putting in front
of you policy papers that set out the possible policy options;
since we are unlikely to get a leak from him, perhaps we can have
direct evidence from you.
What is the Government's policy towards the
possible outcomes? First, if Ireland is to hold a second referendum
and the treaty is ratified, presumably the Government will proceed
full speed ahead. If it were not to hold a second referendum,
what would the Government's policy be? If it were to hold a second
referendum and there was another no vote, what would the Government's
policy be? Surely we are entitled to know that.
David Miliband: Saying that I am playing with
a dead bat is an enormous compliment, Sir Menzies, and hopefully
I shall continue to do so. I have some very clear answers to the
questions that you ask. I was not asked the questions that you
have posed. Let me go through them one by one.
If the Irish decide to have another referendum,
that is a matter for them. If they vote yes, the treaty would
come into law. If they vote no, then it does not come into law
and we live with the Nice treaty. If they decide not to have a
second referendum, the treaty falls and we live with the Nice
treaty. So I can give you very clear answers. Interestingly enough,
both your party and mine are very clear about that: we would give
the same answers on all three; the party that has a difficulty
is the official Opposition.
Sir Menzies Campbell: I am trying to keep out
of that dispute.
David Miliband: Let me explain so that people
can understand the full position. If the Irish decide to have
a second referendum, it is a matter for them. [Interruption.]
I have given a straight answer to Sir Menzies.
Sir Menzies Campbell: I shall treasure it.
Q11 Sir John Stanley: I imagine that
the state of the EU economy will feature fairly largely in your
discussions, in the informal part as well as the formal. Let me
quote The Independent on 24 October: "The French President
has launched a diplomatic and media campaign to suggest that his
current role as conductor of the European Union economic orchestra,
due to expire in December, should be extended informally until
the end of 2009." Can you tell the Committee whether President
Sarkozy is still seeking to have an informal extension of that
part of his presidency? If so, what is the British Government's
attitude to that proposition?
David Miliband: No, he is not going to remain
as President of the European Council after 1 January. That will
fall to the Czech presidency under the usual rotating system.
What was mooted, or at least alleged, was a formal as well as
an informal role. The six month rotating presidency will continue
under Nice, then become a two-and-a-half year rotation, as per
the Lisbon treaty.
Q12 Sir John Stanley: So, there is
no continuation informally of President Sarkozy's view that he
is presently conducting the European economic orchestra?
David Miliband: Informally, he will remain a
very large player on the European stage. Formally, though, the
baton is passed.
Q13 Mr. Illsley: Let me briefly go
back to the Irish question. Presumably, from your comments that
the UK will not consider a revised treaty and therefore will not
support amendments to the treaty, we would not support any representations
from the Irish for changes to the treaty. On the other hand, they
appear to be seeking assurances that are outside the treaty—on
issues such as neutrality and tax policy. Would the British Government
support giving those assurances to the Irish so that they could
embark on a second referendum?
David Miliband: We should wait to see what the
Irish propose because they have been extremely tight and proper
in how they have done things. They will come to the European Council
on Thursday. We must wait for the conclusions that they draw from
their research and assessment of the situation. The truthful answer,
Eric, is that our position will depend on what they are seeking.
That is the most honest answer that I can give you.
Q14 Ms Stuart: You may be relieved
to know that I am not about to question you on the Lisbon treaty.
David Miliband: Yes, I have bored to death for
Britain about the Lisbon treaty.
Ms Stuart: Not as bored as I am. Will you remind
us, Foreign Secretary, of the official Government position on
British membership of the euro? I recall that you said briefly
yesterday that we are still in favour of it in principle. Are
we still committed to five tests and a referendum?
David Miliband: Yes, and yes.
Q15 Ms Stuart: And the five tests
remain unchanged?
David Miliband: Yes.
Q16 Ms Stuart: Barroso, the President
of the Commission, was reported to have referred to "people
who matter". At one stage, I thought he might have meant
Lord Mandelson, but the noble Lord did not mention the euro at
all in his Hugo Young lecture. When Commission President Barroso
referred to people who matter becoming warmer towards euro membership,
who do you think he had in mind?
David Miliband: I do not know, but I look forward
to Commission President Barroso's evidence session before the
Committee for that to be explained.
Q17 Ms Stuart: In terms of the current
economic upheavals worldwide and the position of sterling and
the euro, are our five tests for membership still appropriate?
David Miliband: The five tests are appropriate,
yes. What is interesting about the economic turmoil, whether we
are in the euro or outside it or whether we have a high proportion
of owner-occupation or a high proportion of social rented housing
or private rented housing, is that we have suffered a big hit
as a result of the financial crisis and resource crunch. It is
not just a credit crunch; it is a resource crunch. We saw the
oil price going up to $147 a barrel and it is now below $40. Countries
in or out of the euro with their particular owner-occupation structure
have all been hit by those twin economic challenges.
Our commitment to the five economic tests is
right. It has always been a matter of economic practicality for
me and the Government. As you know, each year at Budget time the
Government decide whether to review the tests and the Chancellor
will announce in the Budget whether or not he will have a review.
Q18 Ms Stuart: Finally, I come to
the current organisational arrangements in which the Finance Ministers
of the eurozone meet separately from those who are not within
the eurozone. Most recently, we have seen our Prime Minister joining
them and the rather strange laws whereby President Sarkozy came
to the United Kingdom without German Chancellor Merkel being invited.
Do you anticipate any changes in the internal government structures
to discuss economic affairs to no longer separate those countries
that are in the euro and those that are outside it?
David Miliband: The Prime Minister attended
one extraordinary meeting with the eurozone Heads of Government.
Obviously, the eurozone Finance Ministers meet on a regular basis,
as part of the Eurogroup under the chairmanship of Mr. Juncker,
the Prime Minister as well as the Finance Minister of Luxembourg.
That was an extraordinary meeting, and it reflected extraordinary
times. The meeting of the President of the European Council, President
Sarkozy, with the Prime Minister of a member state plus the President
of the European Commission is not an extraordinary thing to happen.
It happens quite a lot. It is important to put on the record the
fact that that it is normal, and that it is no more true to say
that Mrs. Merkel was excluded than that Prime Minister Zapatero
of Spain was excluded. It was a meeting between the Prime Minister
and the President of the European Council, and the President of
the European Commission.
Q19 Mr. Purchase: I want to cover
the euro in a little more detail. Our mantra was that stability,
stability, stability was so important for the generation of good
business practice and planning. While superficially there is a
hip, hip, hooray for exporters, the truth is that, if you are
buying in euros raw materials and manufacturing materials, adding
value here and selling them to a dollar area, it is not good news.
As for business planning, the present turbulence with currency
is extremely difficult. Do the Government intend to take another
look at whether the five tests have been met?
One of those tests was whether the euro was
good for British financial institutions—the City, in short—and
I wonder whether that still plays a part in any consideration
that we might make about the wisdom or otherwise of joining the
euro.
David Miliband: One person's turbulence is another
person's flexibility. The floating exchange rate gives us flexibility,
but there is a trade-off. There are still about 380,000 jobs in
Britain in the financial services industry; it is a significant
part of our economy and it is appropriate for it to play an important
part in the tests as they were set out.
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