Bill Cash MP: Fiscal union WILL affect Britain – and we must now have a referendum

By Bill Cash MP

Further to the Franco-German summit at the Elysee Palace on 16th August and the German Chancellor and French President vowing to defend the single currency and form “a real economic government” for the eurozone formed by an Economic Council of Heads of State and Government including the proposal to elect a stable president for that purpose for two-and-a-half years beginning with Herman Van Rompuy (the current President of the European Commission), on top of proposed draconian common tax policies for Germany and France, including a socialist-style financial transaction tax and a joint corporate tax rate by 2013 and the too-little-too-late deficit limiting laws, the Coalition Government must wake up to the dangers that this grave step to full fiscal union poses to the UK’s national interest. 

The translation of the Elysee Palace letter to President van Rompuy has only recently been published and the upshot is it does affect the EU and the eurozone and would require a treaty. If you look through the Elysee Palace letter to President van Rompuy, following the sections after ‘1/ Strengthening the governance of the Euro area’ and ‘2/ Enhanced surveillance and integration of budgetary and economic policy’ you will note it evens says, “The aforementioned proposals should be implemented in such a way as to serve the cohesion of the European Union as a whole.” It does affect the United Kingdom and our fundamental relationship with the European Union as a whole and the eurozone, making a referendum absolutely necessary. 

The letter from the German Chancellor and the French President to Van Rompuy following the Franco-German summit of 16 August ultimately involves elements of EU-wide policy which those acquainted with foreign policy and EU-policy making will observe is deliberate. They threw in the push for the EU-wide common consolidated corporation tax harmonisation, knowing perfectly well that it would be rejected because it is by unanimous vote and that the United Kingdom Parliament would never accept it. What this amounts to is that, with that rejection, the UK leadership would be left agreeing to an EU Treaty or enhanced cooperation without a referendum because they have evaded this under Section 4 of the European Union Act where they claim or assert that such a Treaty applies only to the eurozone. 

The earlier and startling announcement to the House of Commons by the Chancellor of the Exchequer on Thursday 11th August – which he slipped in whilst attention was riveted on the riots – that he and the Prime Minister have urged France and Germany to accelerate fiscal union in the eurozone, is historic and disastrous. It will have profound economic, political and constitutional consequences for vital national interests. It will fundamentally change the United Kingdom’s relationship with the whole of the European Union, not only our relationship with the eurozone.  A new Treaty will no doubt be essential but regardless of how they achieve fiscal union, a Referendum is now essential. 

Britain’s approach to France and Germany is clear acquiescence in the creation of a fiscal United States of Europe and yet we are not currently being offered a referendum by the Coalition because the European Union Act will not allow for one. Disgracefully and despite amendments which I proposed to the European Union Act (recently enacted) but which were rejected, any such treaty or proposal is designed to pass without referendum. Section 4 of that Act would evade the necessity of a referendum where the arrangements would be within the eurozone – but which we would acquiesce in, even surrender, to proposals even though they would clearly and disastrously affect us. 

Even Edward Heath would have vetoed, let alone called for, such a fiscal union of the other member states. This surrender is nothing short of appeasement. 

In the light of George Osborne’s view, it is a Referendum for the United Kingdom voters which is now a matter of “remorseless logic” and the question which must be put, given that the status quo is untenable, must be whether by a simple majority the British people decide either to leave the European Union altogether or to renegotiate all the existing Treaties and to form a trading arrangement with political cooperation but no more.