The Prime Minister made a statement, yesterday, at the House of Commons, on last week’s European Council. Bill Cash made the following intervention.
The Prime Minister (Mr David Cameron): With permission, Mr Speaker, I shall make a statement on last week’s European Council.
The European Union faces important choices in the coming months in order to meet tough economic challenges and deal with problems in the eurozone. There were no landmark decisions at this Council, but there was some limited progress on both issues.
As I have said, we are in a global economic race, and all European economies need to become more competitive. That means taking steps such as expanding their private sectors, reforming welfare and improving education. In terms of action at European Union level, we believe that it means lifting the burdens on businesses, completing the single market, and taking forward trade deals with the biggest economies and the fastest-growing countries and regions in the world. I have consistently promoted those solutions, and at the Council we made some progress.
On deregulation, I joined others to secure a new agreement that specifically refers to withdrawing legislative proposals from Brussels that stifle our businesses. Of course, we now need to see specific actions, but it is worth noting that the conclusions refer to the
“intention to withdraw a number of pending proposals and to identify possible areas where the regulatory burden could be lightened”.
On completion of the single market, as I reported in June, there is now a proper plan with dates and actions for completing the market in energy, services and digital, but once again it is important for that to be followed through in order to secure jobs and growth.
On trade, the Council agreed on an ambitious agenda to create 2 million jobs across Europe. That includes completing free trade deals with Canada and Singapore in the coming months, and starting negotiations with the United States next year on a comprehensive transatlantic trade and investment agreement. We made some new progress on launching negotiations with Japan “in the coming months.” That deal alone could increase European Union GDP by €42 billion.
Let me now turn to the eurozone. Britain is not in the eurozone and we will not be joining the eurozone, but it is in our national interest for the uncertainty surrounding the eurozone to end. I have argued for some time that a working eurozone needs a working banking union. It is one of the features that a successful single currency needs. Obviously you do not need a banking union because you have a single market; you need it because you have a single currency—so Britain should not, and will not, be part of that banking union.
Britain’s banks will be supervised by the Bank of England, not by the European Central Bank, and British taxpayers will not be guaranteeing or rescuing eurozone banks, but we do need eurozone members to get on with forming a banking union. At the Council, I joined those who were arguing for progress to be made on the plan that had been announced in June. To put it simply, I believe that it is not enough to have a banking union that is stripped of the very elements—such as mutualised deposit guarantees, a common fiscal backstop and a framework for rescuing banks—that are needed to break the dangerous link in the eurozone between sovereign debt problems and the stability of eurozone banks. But because not all countries outside the eurozone—like Britain—will want to join such a banking union, it is also essential that the unity and integrity of the single market is fully respected. The organisation that currently ensures a level playing field for banking within the single market is the European Banking Authority. We need to make sure that it will continue to function properly, ensuring fair and effective decision making. This, again, is specifically recognised in the conclusions. More broadly, as eurozone countries take steps to deepen their economic and monetary union—as they will—it is important that we secure, as I did, an explicit commitment in the conclusions that the final report and road map in December will include “concrete proposals” to ensure that the integrity of the single market is respected.
Finally, the next Council in November will discuss the financial framework for Europe between 2014 and 2020. We have not put in place tough settlements in Britain in order to go to Brussels and sign up to big increases in European spending. I do not believe that German voters want that any more than British voters, and that is why our Governments have led the argument in Europe for fiscal restraint, so I put down a marker that we need a rigorous settlement. As the letter signed in December 2010 by a number of European leaders said, given the tough spending settlements that all member states have had to pursue in their own countries,
“payment appropriations should increase, at most, by no more than inflation over the next financial perspectives”.
On foreign affairs, the Council, led by Britain, once again discussed further restrictive measures on the Syrian regime, and made clear to Iran that we will increase the pressure if there is no progress on the nuclear dossier.
Making our economies competitive, dealing with uncertainty in the eurozone, keeping the EU budget under proper control, and making sure the EU speaks with a strong and united voice on the key international challenges: this is our agenda, and I commend this statement to the House.
Mr William Cash (Stone) (Con): I commend my right hon. Friend and the Financial Secretary for so far complying with the European scrutiny rules on these banking proposals. Now my Committee has been able to recommend them for debate, and an early debate at that. However, given the reported advice of the Council’s legal adviser and the inherent impact of the proposals on our national interest, will he veto the proposals, not least because the proposed voting changes would expose the City of London to qualified majority voting, which would be very damaging to it?
The Prime Minister: The European Union is going about this change to banking union through a treaty base that requires unanimity, so Britain has a full part in the discussions; but I do not want us to veto proposals for a banking union for the eurozone because I think the eurozone needs a banking union. We should be putting our negotiating heft, as it were, towards ensuring that those of us remaining outside the banking union have proper safeguards. Let me make one last point: I am sure that my hon. Friend knows that a lot of financial services regulation in the European Union is already done by qualified majority voting.
