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Chris Bryant: No. I respect the financial services industry in the City as much, and take as much pride in it, as the hon. Gentleman does. It is a vital part of the British economy. However, I would also argue-as the Chancellor of the Exchequer did in The Times, yesterday or the day before-that the City of London is as important to the economy of the whole of Europe as it is to the United Kingdom. That is why I think that any internal market Commissioner would want to protect and enhance its reputation and strength.
I warmly welcome the appointment of Mr Barnier. I know that he is to visit the United Kingdom before Christmas, and will have conversations with the Chancellor of the Exchequer. He has proved himself to be a very effective Commissioner in the past. I think the hon. Gentleman is making a mistake when he presumes that individual Commissioners will be representatives of their Governments. It is made very clear in the treaty, which I am sure he has read on several occasions-
Chris Bryant: I had no doubt that the hon. Gentleman had read it. May I ask him to wait a moment and calm down? The treaty makes it absolutely clear that Commissioners are there not to represent their countries but to act as a body of Commissioners, and I am sure that the Commission will produce legislation that will be helpful to the City of London.
I welcomed the unanimous agreement that was reached on a set of measures yesterday. I shall say more about that regulation shortly.
Mr. Robert Goodwill (Scarborough and Whitby) (Con): Given the point that the Minister made earlier, he might wish to consider the way in which the Spanish Commissioners have always behaved in relation to fisheries reform, which, in my experience, is often quite nationalistic. Will the Minister congratulate the new Conservative group in the European Parliament on securing the chairmanship of the Committee on Internal Market and Consumer Protection for Malcolm Harbour, a British Conservative Member of the European Parliament representing the west midlands, which will have an influence in that important sphere?
Chris Bryant: I thought the hon. Gentleman would go on to congratulate the Conservative group on completely isolating themselves in Europe, on not managing to secure a single vice-president of the Parliament, on not managing to secure a single Commissioner, and on being pretty much reviled by most Members of the European Parliament. I do not know whether he has visited the European Parliament recently.
As it happens, I have a great deal of respect for Mr. Harbour. I knew him when I was working in Brussels, and I look forward to working with him. I merely say to the hon. Gentleman that by absconding from the main group in the European Parliament the Conservatives have done themselves absolutely no favours, and have marginalised the British interest in Europe.
Mr. Goodwill: I am pleased to tell the Minister that I was a Member of the European Parliament for five years, and that I was deputy leader of the British MEPs and a deputy co-ordinator of the European People's party. I should be interested to learn whether the Minister's take on it is any different from mine.
I am very happy to welcome our new group. It is not isolated; it is at the very heart of the decision-making process, as Mr. Harbour's appointment has demonstrated.
Chris Bryant: With all that knowledge, the hon. Gentleman should know better. He is aware that the European Conservatives and Reformists, the group that he handpicked, along with his leader and Dastardly and Muttley- [Laughter.] The hon. Member for Rayleigh (Mr. Francois) clearly recognises himself.
As the hon. Member for Scarborough and Whitby (Mr. Goodwill) knows perfectly well, in the Committee on Economic and Monetary Affairs a couple of weeks ago, when the portfolios were being handed out on all the key issues relating to financial services and the internal market, not a single Conservative MEP was given a single portfolio. Two of the key portfolios were given to Labour Members. If the hon. Gentleman does not mind, I shall move on now.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab) rose-
If it does not matter that Commissioner Barnier is French, then it also clearly was not a British triumph that the new High Representative is British.
Chris Bryant: I think it is a triumph that the new High Representative is Cathy Ashton, because I know her to be a very effective operator. I know that she will build coalitions of opinion. Yesterday even Conservative MEPs were congratulating her on her appearance in the European Parliament, and I am certain that she will do a very effective job.
Mr. Nigel Dodds (Belfast, North) (DUP): May I take the debate back to fundamentals? Tuesday marked the coming into force of the Lisbon treaty. Will not people in the country listening to the debate-if anyone is-feel totally cheated by the fact that they have been left with no say, according to both the Government and the Opposition? Do they not want a say on our relationship with Europe, and is that not what the debate should be about?
Chris Bryant: To be honest, no, I do not think it should be about that. The reason is very simple. As I said at the outset, Europe has spent too much time over the last eight years rowing about the rules and about the treaty. I think most citizens in Europe want to see the European Union engage with the issues that really concern them, such as tackling crime, jobs and growth. They want to ensure that Europe is more effective on the global stage, so that we can deal with complicated issues such as Iran and Russia in a united way that is more in the interests of the British people.
Mr. Andrew Pelling (Croydon, Central) (Ind):
Would it not be to the advantage of the British nation and, indeed, the House, where the European issue essentially poisons British politics, finally to resolve the issue of
whether we are to be in or out of the European Union, and to take the opportunity to hold a referendum on the subject on the day of the general election?
Chris Bryant: All that we have seen so far is that every time a Conservative Member stands up, he comes out with a new- [Interruption.]
Mr. Speaker: Order. I must tell the hon. Member for Forest of Dean (Mr. Harper) that he has developed quite a bad habit of chuntering from a sedentary position, for all the world as though the debate consisted of a private conversation between him and the Minister. I am glad that there is good humour, but we must now settle down a little.
Chris Bryant: If the hon. Gentleman wants a private conversation later, Mr. Speaker, I am sure we can arrange a date.
I think that what hon. Members were trying to say to me was that the hon. Member for Croydon, Central (Mr. Pelling) is no longer a Conservative Member of Parliament. I apologise to him. Former and present Conservatives alike, however, seem to develop a new policy each time they rise to their feet.
I was trying to say something about the economic matters that will be before the European Council next week. First, it is interesting to note that all European countries have adopted broadly similar measures. All member states have adopted significant stimulus packages, even those which, according to some-including the hon. Member for Rayleigh last year-were initially sceptical. For example, on 20 February 2009 the second German stimulus package, worth €50 billion, was adopted. Together with the first German stimulus of €32 billion, it represented an investment of 3 per cent. of GDP over two years, stimulating an additional 1 per cent. of growth. Germany invested €80 billion for recapitalisation of its banks, and France invested €40 billion. Those measures are very similar to the measures we adopted here.
Secondly, concerted action in the G20 and the European Union has been vital. The EU's response to the crisis has demonstrated exceptional unity of purpose in its efforts to restore jobs and growth. To date, its combined fiscal stimulus has exceeded €400 billion. I am certain that without that combined effort we would have faced a worldwide slump or depression akin to what our forebears went through in the 1930s.
Kelvin Hopkins (Luton, North) (Lab): The Minister talks about that stimulus as if it was a European stimulus. Was it not, in fact, an aggregation of stimuli by nation state Governments, and is that not a very significant distinction?
Chris Bryant: My hon. Friend is absolutely right that the sum I mentioned is the aggregate of all the different stimuli in each of the different countries. None the less, countries came together and engaged in lengthy debate in Council meetings and moved forward with very similar policies, and because of that we were then able to achieve a greater effect through that aggregate stimulus.
Mr. Peter Bone (Wellingborough) (Con):
The Minister is making the case that Europe as a whole has benefited, but is not a key reason why we in this country have done relatively well recently the fact that we have had the
pound, which has been allowed to devalue against the euro, thereby making our industry more competitive than other European industries? Also, is it still the Government's policy to join the euro when the conditions are right?
Chris Bryant: The Government's policy on the euro has not changed at all, as the hon. Gentleman knows. He says that over the past year there have been benefits to our having the pound, but there have been problems as well. I have met a lot of expatriates living in Spain, Greece and elsewhere. They face significant problems, because their savings in pounds have depreciated considerably; many Members have written about this on their constituents' behalf. The hon. Gentleman is right in other respects, however. For the British tourist industry, the problems of the recession have been softened because many French, German and Spanish people, for instance, have been able to come here as they have found it an affordable holiday option.
Ms Gisela Stuart: When the Minister reads what he said in response to the question from my hon. Friend the Member for Luton, North (Kelvin Hopkins), he will find that his comments were another instance of what keeps happening time and again: an example of co-ordinated co-operation between member states is interpreted as an excuse for further integration. The two things are very different, and the fact that we had a concerted financial stimulus is not an excuse to then have Europe-wide financial regulation and everything that flows from that. I shall come back to this point if I am called to speak later. We must not always have this confusion, which is caused by hailing co-operation between nation states as a success in respect of European Union integration.
Chris Bryant: My hon. Friend is absolutely right. There are areas where we need to have co-operation between member states on an intergovernmental basis-for instance, the fiscal stimulus has been helpful and we have loosened the bonds of the growth pact-but there are also areas where we have to co-operate on a more co-ordinated and enforced basis. I shall come to the issue of regulation shortly, and I suspect my hon. Friend and I will disagree on it.
Thirdly, we have learned during this international crisis that properly calibrated national regulation of financial markets is a vital protection against economic crisis, but national regulation alone cannot be sufficient. That is why the Prime Minister argued forcefully and successfully earlier this year at the G20 for enhanced global co-ordination, including through improved capital standards, increased oversight of systemically important financial institutions and the agreement of international compensation standards. It is vital that this be done on an international basis; otherwise, there is a danger that some countries will compete in the bargain basement of regulation, which does no favours to any economy in the world.
That is also why we wholeheartedly support the agreement reached at the meeting of European Finance Ministers yesterday on the setting up of three new European financial regulators. The new European systemic risk board will provide a much-needed Europe-wide early warning system on financial risk. These proposals
pose no threat to our fiscal autonomy. Let me add that we believe that these bodies will work in the City's interests, not against them. The UK is proud of its robust financial services industry, and Europe derives significant benefits from it. London is the only city that can compete with New York as a financial centre, and I know that Europe knows that its success is integral to European economic prosperity.
There are some people who refuse to acknowledge that the regulation of financial markets, on a national or international basis, is important. Indeed, the right hon. Member for Wokingham (Mr. Redwood) announced only a couple of years ago that
"we see no need to continue to regulate the provision of mortgage finance".
"In Financial Services we should allow people to buy and sell products that are not regulated".
I believe that would be an act of gross folly.
The shadow Chancellor, the hon. Member for Tatton (Mr. Osborne), added for good measure that this is
"how we liberate our economy to compete with the likes of India and China. Cut Government regulation".
It is clear that the Conservatives have learned absolutely nothing about financial regulation.
Michael Connarty (Linlithgow and East Falkirk) (Lab): My hon. Friend talked about three regulatory bodies, but I believe they are in fact three supervisory bodies, which is a rather different thing. It would be quite worrying if we had three regulatory bodies, whereas supervisory bodies will provide the oversight that is required across Europe.
Chris Bryant: My hon. Friend is absolutely right and he makes his point very well, as ever.
We are determined that the EU should meet the economic challenges we all face head-on and swiftly. Otherwise, parts of Europe could face a lost decade of low growth and high unemployment, providing a drag on economic prospects for us all. That is why the Prime Minister wrote to heads of member states in October setting out a new vision for economic co-operation in Europe. He pointed out that the start of a new Commission term gave European leaders the opportunity to establish a new set of explicit and urgent economic priorities, which he called a
"European compact for jobs and growth".
We want next week's December European Council to agree to the need for such a compact-one where European countries co-ordinate their actions to tackle the key concerns of Europe's citizens, while at the same time taking steps to reform the effectiveness of our institutions. We believe such a compact must have six components. It should focus on creating jobs and equipping our work force with the skills they will need in the future. It needs to support those sectors of the economy that will deliver the growth of the future, particularly low-carbon, resource-efficient sectors. It should seek to remove the remaining barriers in the single market and provide companies with streamlined access to markets. It should strive for faster progress towards open global markets by pushing for the completion of the Doha round in 2010, while at the same time stepping up bilateral trade negotiations. A European compact for jobs and growth
must also strengthen the banking system so that European financial markets and institutions can play a full role in supporting sustainable economic growth.
The Government believe such a compact will give European countries a progressive and ambitious framework in which to generate the economic prosperity of tomorrow. It will be a framework that builds on the actions of the G20 and provides greater coherence to the EU's economic policy, both internally and in a global context.
Mr. David Drew (Stroud) (Lab/Co-op): Does the Minister not acknowledge, however, the following somewhat contradictory position we find ourselves in in Europe? Countries on the European mainland have offered job subsidies during the recession, whereas our Government have studiously stood against that. It is all well and good having these grandiose statements about a compact or a contract, but British jobs have been sucked on to the mainland of Europe because countries there have protected their manufacturing industry, whereas we have let ours go.
Chris Bryant: I am not at all sure that my hon. Friend's characterisation of the labour markets across Europe is correct. It is true that sometimes it is more difficult to sack somebody in other parts of Europe, but it is also more difficult to employ somebody-to take somebody on-in other parts of Europe. Our flexible labour market has been an important part of ensuring the strength of the UK economy. It is also interesting that, whereas many people were predicting at the start of this year that we would have 3 million unemployed by the beginning of December, we have not reached that figure. That is because we have both taken concerted action in the UK and worked with countries that are our important trading partners across Europe to try to make sure jobs are protected.
Dr. Andrew Murrison (Westbury) (Con): One part of the compact to which the Minister refers is the European defence-technological industrial base. Will he accept that our country has more defence exports and capability than other European nations and that we are therefore especially at risk of job losses if this goes wrong? Will he further accept that, on procurement, we should deal far more with those countries with which we operate militarily, which means overwhelmingly the United States, and not the nation states of the European Union? Will he therefore take a sceptical view of this element of the compact, which serves to do down job prospects in this country and our defence needs?
Chris Bryant: No. I defer to nobody on the Conservative Benches on the protection we give and the efforts we make to ensure the long-term sustainability of our defence industry. Indeed, many of my constituents in south Wales work in a variety of firms engaged in different elements of the defence industry, and we seek to protect those important jobs. I do not accept the hon. Gentleman's suggestion that we do business only with our American colleagues. Of course, they are very important allies to us, but my experience-having seen British troops fighting alongside Dutch personnel, Italians, Spaniards, Danish personnel, the French, the Germans and those from many other countries-is that our alliances in Europe are significant and important to us.
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