Mr Redwood’s contribution to the emergency debate on the Treaty on Stability, Co-ordination and Governance, 29 Feb

Mr John Redwood (Wokingham) (Con): This debate is about the future of democracy itself. There can be no more important issue. We are considering a draft treaty that presumes to take substantial powers of decision over how much a country can spend, how much a country can tax and how much a country can borrow from the democratic choices of the member state to a centrally imposed system, which it is hoped will make the euro work better. This matter is of vital importance to the United Kingdom because we wish our neighbours to live in democratic prosperity for their own sakes, because we wish to trade with them successfully and because we wish to make sure that there is no danger whatever that our cherished freedoms and independence as a member state that has deliberately kept out of the euro could in any way be damaged by this treaty, which presumes to use European Union institutions to enforce a non-European institution will.

The peoples of western Europe are right to be mightily worried about the bad state of health of their respective democracies where they have adopted the euro. We see daily on our televisions or hear reported on our radios dreadful scenes from Greece, Spain and Italy, which are struggling with the common economic discipline and policy being imposed today. The German-led new treaty says that such discipline is not strong enough, that there needs to be more mutually assured deflation and that there needs to be a madness imposed on these countries to try to see whether the euro will work.

Ministers rightly say that they must not say anything in public or be seen to do anything in public that makes the difficulties of the euro area worse. I fully endorse that approach. They should never normally comment on the euro, because it is too dangerous, it is too difficult and it is up to those in the euro to say what they wish about how their currency is developing. But how it develops is of grave interest to us, so I urge my right hon. Friend the Prime Minister to ensure that, in private, when he is round the table, as he will be, with all the other leaders and with a right to a view, he speaks truth to their impotence. He should say to those assembled leaders struggling to get a grip on their recalcitrant economies and some stability into their very unstable currency, “This is not working.” He should tell them that, in truth, the treaty before us this afternoon cannot conceivably make the euro work. Other things can help to ease the pain of the euro, and in another debate we could discuss many other policies that could pull off the trick of getting many countries through and the euro out the other side, but this treaty is not the way to do it.

This treaty is deeply offensive to many democratic peoples in the countries of western Europe that will face it. It reinforces a German view of how to make the economies of western Europe work that clearly is not working. If part of the medicine for a country that has borrowed too much is to spend less and borrow less in the public sector—that can be the right approach, and I can think of countries where that could apply—at the same time a series of policies have to be adopted to promote growth in the private sector, so that there is some hope, there are some new jobs and there could be new tax revenue coming in.

Where the EU is proposing tax rises, it needs tax reductions on enterprise, business and success. Where it is proposing a bigger monetary straitjacket, it needs monetary ease. It is now creating a very big monetary easing across the eurozone as a whole by tipping trillions of printed money into the system to try to make it work, but that new money cannot possibly help Greece or Portugal, because they have frozen and damaged banks, they are under the austerity cosh, and representatives of the European Union are going in and treating them as if they are damaged economies that cannot conceivably pull through.

The euro scheme is damaging the confidence that Greece and Portugal need in order to see light at the end of the tunnel; it is putting people off investing there. Why would someone go to Greece to invest through euros, if they think that it may be driven out of the currency and forced into a big devaluation? Why would they seek to do business in Greece when the banks are frozen and they are not benefiting from the liquidity injection that is helping the corporate bond market and the Government bond market, temporarily, in Italy and in Spain?

Above all, our Prime Minister has to secure and protect the British interest. We in this House should be very proud of what our predecessors created, obtaining control over how much is raised in taxation, how much is spent and how much this country borrows and prints. We are rightly out of the euro, because those in it cannot conceivably maintain democratic control over those issues. I am grateful to my hon. Friend the Member for Stone (Mr Cash) for raising this issue today before the summit, but we are worried that—inadvertently, I am sure—the Government might get us dragged into much greater supervision of our economy by the European Union, in a way that signs us up to the very mad policies that we are rightly warning them cannot conceivably work.

Europe is at risk: jobs are being destroyed; economies are being gravely damaged; the people are on the streets; and the main political parties in these European countries are signing up to exactly same policy, so even where a general election takes place the popular will is thwarted, as people do not have a proper choice if they stick to the main parties. In one or two countries Governments are even being changed by the European elite without a single vote being cast and without the democratic view of the people and their parties being consulted. Surely everyone in this House is ashamed of that. Surely we all unite in saying that the thing that brings us together is our belief in the power of the ballot box, the voice of the elected representative and the right of people to choose and to say that a policy is failing. We are told by the European establishment that only its policy can work. There is no evidence whatsoever that the policy is working, but there is massive evidence of the damage it is doing.

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5 Comments

  1. Kevin Ronald Lohse
    Posted March 1, 2012 at 4:21 pm | Permalink

    So true, but the Europeans are so committed to the Euro as a binding for political union that they cannot afford to listen. If the PM has the temerity to echo the constant warnings of certain Conservative MEP’s, he will be laughed at and ignored, and the assault on the City will be intensified. Furthermore, the LibDems would not allow him to say such a thing in their name – no doubt a Clegg-appointed commissar will accompany the PM to the talks to ensure that.

  2. n
    Posted March 2, 2012 at 1:48 pm | Permalink

    Dear Mr Redwood,

    I could not criticise a single word of your statement. Well done! I only hope that Our Dear Leader is listening. If not, then “we are doomed”!

  3. Derek Emery
    Posted March 2, 2012 at 2:10 pm | Permalink

    Isn’t the problem that the EU (i.e.Germany) cannot let the PIIGS off their debts on a country basis because German voters would never allow it. Therefore the PIIGS are left with all the disadvantage of being locked to the same currency as high productivity Germany. In a proper full union such as UK or US the perennially poor outer regions are given money year in year out to prevent them falling into abject poverty.
    The German plan assumes they can be made into efficient highly productive copies of Germany. In the real world this cannot happen because they do not have the German psychology or culture or long history of investing in technology.

  4. Alan Wheatley
    Posted March 2, 2012 at 3:39 pm | Permalink

    Well said.

  5. Barbara Stevens
    Posted March 2, 2012 at 6:22 pm | Permalink

    I agree with your article, but somehow I just do not believe that the PM will do well for this country. He can come away with ‘promises’ and well intentioned ‘red lines’, but when the chips are down across the Channel they do as they please. They bring in new laws and expect all to obey, even when we’ve abstained from the treaty. They cannot be trusted at all. Anyone who thinks they can is very foolish indeed. I believe the PM is not up to the task of delivering the best for this country, he appears brainwashed by the pomp and circumstance of the EU. Has he his eye on the fine detail?
    We all know the EU is not working, we all know its behaviour is silly and undemocratic, yet, MPs here still support it and don’t speak out against it. Is this right, when the country as said it doesn’t want it? It appears what ever the public say they are ignored. You are right voting is the best thing it gives the public it’s chance to voice it’s choice, and if we keep being ignored we will make our choice; it won’t be the same as we’ve had in the past or now. I want out of the EU, the money could be spent elsewhere, and people who want to go out and develop new busineses they will, the world is their oyster. Not with the millstone round our necks the EU.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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