It is encouraging that David Cameron, in his Spring Forum speech, has focused on enterprise and growth – and that at a parliamentary meeting on the Budget only a few weeks ago, several of us emphasised that growth was key to reducing the deficit and not merely the importance of cuts which, where justified, should be accompanied by cuts in taxation as well.
However, it is simply not credible to set out a stall for growth without fundamentally cutting back on European regulation. The Government itself admits – as I have said repeatedly in debates – that at least 50 per cent of all economic regulation comes from the European Union and this does not even take account of the vast impact of the unacceptable transfer of financial regulation over the City of London and the UK to European jurisdiction, against which I have argued for several years in debate and which will cause immense damage to our competitiveness.
The promises made by David Cameron in the Centre for Policy Studies lecture of 2005 stating that “For Britain, the first priority must be the return of powers over employment and social regulation … This would be the strategic imperative of my European policy” and pledges during the leadership election which preceded that, must be rigorously followed through if the claims for economic growth and helping small businesses are not to be hollow. This is well overdue – as I made clear in my pamphlet The Strangulation of Britain and British Business (European Foundation, 2004); as Peter Mandelson, the then EU Trade Commissioner, said in a speech to the CBI, that EU red tape cost about 4% of GDP, and; as the EU’s Enterprise Commissioner Gunther Verheugen said in a 2006 interview with the FT that EU legislation now costs European business €600 billon (£405 billion) a year. Overall, we are told that EU regulation has cost the country over £124 billion since 1998. So, it is simply is not good enough to argue for deregulation without taking action on the European dimension and effectively – this includes the Working Time Directive in its entirety.
The only way to change European legislation, unless they are prepared to concede it, is to use the “Notwithstanding” formula, to override specific EU provisions. For example, the Conservative Party used the “Notwithstanding” formula on the Legislative and Regulatory Reform Bill in 2006. My sovereignty proposals in relation to the Legislative and Regulatory Reform Bill were then accepted by the current Prime Minister when he was Leader of the Opposition and by the party Whips. The Whips even asked me to put in their own tellers. So, the Conservatives have supported such a measure before. We lost the vote, but we won the principle within the party.
In fact, this was the sovereignty argument on Clause 18 of EU Bill, which itself is going to be debated tomorrow. This is not a general debate on sovereignty, as some commentators have incorrectly asserted, but is the way of delivering growth for small businesses on the ground. (There is some indication of a movement from those asserting that sovereignty is not the key issue – it is. Sovereignty is the sovereignty of the people through their elected representatives and must be asserted properly if we are to deal with the European issue. The necessity for a proper referendum is important but would not be effective if the issue of sovereignty was not reaffirmed at the same time).
There is an extremely important amendment which I have tabled related to European economic governance for tomorrow’s debate. At the moment, the Treaty for European economic governance on which I have asked the Prime Minister many questions – as yet unsatisfactorily answered – would be exempt from the referendum requirement of the EU Bill although it would have a vast impact on the United Kingdom. The amendment is supported by several Select Committee chairmen and other leading Eurorealist standard bearers. There is also the vital issue of the competitiveness package which also falls into the same category, the characteristic of both of which is to create, with the acquiescence of the Government, a two-tier Europe which would damage our own ability to compete because we would be parties to these arrangements even though we are not members of the eurozone. This is simply unacceptable and extremely damaging to the national interest for these arrangements to be allowed to go through without a referendum. I put down parliamentary questions on all of this for answer today from the Government, in time before the debate. If however we were to move down the route of association of nation states, and to not be drawn into the same Treaty and if it was truly a bilateral arrangement in which we were not involved in any Treaty arrangement, then that is a real alternative.
Every penny of public expenditure comes from private enterprise – so it is essential to repeal European legislation in order to give oxygen to the small business community to enable growth and remove burdens. To argue for economic growth without doing this is simply hollow.
Now that this important speech has been made by David Cameron, it must be accompanied by the specific repeal of legislation, which has been promised and supported in my amendment. We have to unravel the refusal to assert British sovereignty under Clause 18. It is neither constitutional outrage nor abstract waffle – because it is the only way to deliver the promises made in the manifesto and it is an absolute necessity if we are to achieve growth.