Bill Cash MP: We need a referendum on the proposed Fiscal Union

Bill Cash is the Member of Parliament for Stone.

Ahead of the EU summit tomorrow, I and other Select Committee Chairmen and prominent eurosceptics from the new parliamentary intake have re-introduced a Bill in the House of Commons to require approval by Referendum and an Act of Parliament for provisions leading to fiscal union or economic governance within the Eurozone.

The European Union Act 2011 (Amendment) Bill has been presented by myself and other MPs, including Bernard Jenkin, John Whittingdale, John Redwood, John Baron, Greg Knight, Graham Stuart, Richard Shepherd, Jacob Rees-Mogg, Chris Heaton-Harris, Zac Goldsmith and Peter Bone.

The issue on the table for tomorrow at the summit includes proposals for a fiscal union within the eurozone. This emphatically and deliberately would not be put to a Referendum under the European Union Act 2011. It is deliberately excluded under Section 4 of that Act. That is why I re-introduced a Bill today to require such a Referendum.

I have already made clear that allowing Eurozone Member States to go ahead towards fiscal union and economic governance creates two Europes, to which the United Kingdom would remain bound by Treaty and law, though they are built on sand. The future of the United Kingdom is at stake – democratically, politically and economically. The European Union is a failed project and as George Osborne has indicated, the problems of the Eurozone are undermining our economy. It is destroying our democracy and it will only get worse.

The crisis in Europe which has been predicted since the early 1990s is now with us. It will not go away and it needs reasoned and democratic discussion, which is entirely absent.

What is required is a Convention of leaders of the European Union, together with representatives of the national Parliaments, which I believe should be held in the context of the current financial, economic and political crisis in Europe. I do not believe, given the scale of the impact on the 475 million people who live in the European Union, that it will be possible to solve the problems without a coherent strategy which simply does not exist at the moment. There have been innumerable summits and so-called solutions – on many occasions, explained as a ‘victory’ – but all of which tend to be economic and never resolve the issues.

Such a Convention should be in public and transparent and should be based on the leaders of each of the member states putting forward what kind of Europe they want without preconditions or assumptions based upon the existing Treaties.

The crisis is treated largely as an economic question but it is in fact an intensely political question about the daily lives of 475 million people.

As I told the House of Commons on 14 May:

“We need a Convention of the whole of Europe, at which the leaders of Europe sit down opposite each other and talk this through in a sensible, rational manner, admitting that what has gone wrong has to be remedied. Representatives of the national Parliaments must be present, too, and there must be a constructive dialogue about the kind of Europe we want, because at the moment it is heading for disaster.”

The Convention should discuss only issues of principle and the basis upon which the Treaties need to be renegotiated in order to achieve democratic stability and economic prosperity in line with what the voters of each of the member states actually want. The kind of muddling through which is currently being witnessed – with one failed solution after another – merely makes the economic, political and democratic black hole deeper without producing any solution.

This increasingly failing project can only be resolved through rational discussion based on democratic consent which could only be achieved by such a Convention and not by the imposition of solutions either by the European Commission or by certain Member States imposing their political will on individual nations and based upon the existing Treaties which clearly do not work.

There is however one means of beginning to resolve the economic, political and democratic black hole which has now opened up and which proposed fiscal and political union – firmly on the European agenda – will only make worse, deepening the black hole. A Convention would be a reasonable means.

In the course of the Convention, Member States’ would congregate around certain principles and not be driven by existing Treaties but around a sensible discussion – which could not only be debated in a Convention but subsequently debated by people in a Referendum.

A UK Referendum is essential based on a fundamental change in the relationship between such member states of the European Union and the United Kingdom – rather than a simple transfer of powers from Westminster to Brussels – because as I said to the Prime Minister in the Commons on 23 May:

“There is increasing pressure for political union between certain member states. Whether this is achieved by enhanced co-operation, by separate intergovernmental treaty or by other stealth measures, does my right hon. Friend accept that, irrespective of the European Union Act 2011, such a fundamental change in the relationship between such member states of the European Union and the United Kingdom would necessitate a Referendum?”

The Prime Minister replied he did not agree with that position, indicating:

“I think the right position for the UK is to say that we should hold a Referendum only if power were to pass from Westminster to Brussels or if we were to join some new treaty or political construction that involved the passing of that power.”

Yet we are faced with the proposed fiscal and political union leading to the construction of a two-tier Europe – with the UK being relegated to an outer-tier – which necessitates a Referendum. It must be accepted that fiscal union within the Eurozone will not work and will be unstable, damaging and not improve our own economy.

It will have profound economic, political and constitutional consequences for our vital national interests. This will fundamentally change the UK‘s relationship with the whole of the European Union, not only our relationship with the Eurozone. This means that we must have a Referendum in the light of such a profound change in our political relationship with Europe.