Prepare for storms ahead as new battle looms over Europe

Denis McShane

AS the autumn chills cool the summer’s over-heated speculation about the bust-up of the euro or the expulsion of Greece from the single currency, there is one nation’s political class that remains stolidly Eurosceptic.

In the House of Commons and among key Conservative ideologues like the influential Tory MEP and polemicist, Daniel Hannan, the clamour for referendum and for Britain to quit the EU grows and grows.

Hannan’s latest book, featured in Saturday’s Yorkshire Post, has the splendidly unambiguous title Britain and Europe: A Doomed Marriage. His Tory colleague in the Commons, Douglas Carswell MP, has an even more vivid metaphor. He says that Britain “is shackled to a corpse” – Europe.

Meanwhile, across the Channel, the death of the euro has again been postponed. In Germany, the Constitutional Court has declared that Germany agreeing to the 500bn euro bail-fund, the European Stability Mechanism, was legal. The court made clear the decisions on Europe lay with the Bundestag, Germany’s parliament, and it was up to elected politicians to make decisions about treaty obligations and decisions.

In the Netherlands, the main pro-EU parties of the right and left scored a decisive victory in last week’s elections. The ugly racist, Islamaphobe politician, Geert Wilders saw his vote halved. The ex-Maoist, populist, anti-EU Socialist Party lost to the centre-left Dutch Labour Party which came back from trailing in the polls to win nearly as many seats at the ruling centre-right Liberal party.

The Dutch are the most pragmatic voters in Europe. They flirt with populist nationalist politics but their heads and wallets know that Dutch prosperity is built on open trade and open markets.

The currency Balkanisation of Europe promoted by those who want the Dutch to revert to the guilder, the French to the franc, the Germans to the DMark or the return of the drachma and peseta for Greeks and Spaniards has little attraction for the Dutch.

They follow British politics closely and know that despite the massive devaluation of the pound sterling since 2008, there has been no improvement in the British economy while Britain’s trade deficit with the world has increased from £20bn in 2009 to £24bn last year.

British business is silent on the question of Britain’s future in Europe. Business leaders know how neuralgic the Europe question is for the Conservative Party, especially in its tortuous coalition relationship with Nick Clegg’s pro-European Lib Dems.

But with the news that BAE is looking to merge with EADS to create a giant European defence conglomerate, the need for British firms to look to Europe grows as the US economy falters and the Pentagon budget is slashed.

William Hague and other Eurosceptic Conservatives like David Davis and Liam Fox make much of the need to look to rising economic powers like China, India and Russia. Yet Britain runs massive trade deficits with all three nations. In 2011, Britain exported more to Spain than to China, more to Austria than to Brazil, more to Poland than to India, and four times as much to France as to Russia. The emerging economies are important but UK exports to the Netherlands and Italy produce more profit for British business.

Might the CBI, the EEF and the other business outfits decide that the bottom line is more important than allowing the anti-EU line of the Conservatives, Ukip and the off-shore owned London Press always to remain unchallenged?

To be fair, the mood of the nation has never been more Eurosceptic. All recent opinion polls show a majority of voters believing that Britain’s membership of the EU should now be up for revision. The next stage will be the proposed Banking Union treaty outlined by the EU Commission president, Jose Manual Barroso, in the European Parliament last week.

As in 1950, when it was decided that leaving the coal and steel industries under national sovereign control had been an error, today there is a broad acceptance that Europe’s banks need to accept supranational supervision after their disastrous performance in recent years.

The Banking Union will require a new treaty. The ECB will have new powers to dictate the terms of trade for banking and linked financial services. This is a nightmare for David Cameron and George Osborne. Just as the City has to abide by US regulatory rules to trade in New York or Boston, so too will British banks, insurance firms and other City operators have to obey ECB banking rules if they want to trade in the world’s biggest market – the EU.

Eurosceptic Tories would like to repatriate powers and William Hague has ordered a review by all ministries of regulations or competences that could be clawed back from Brussels. But this supposes agreement from 26 other nations to Britain having its tailor-made à la carte EU menu.

If, as is likely, this is not forthcoming, then Mr Cameron will find it impossible to avoid a referendum – the dream of Ukip and Tory Eurosceptics come true.

The Prime Minister is trying to threaten Europe with a British referendum unless he obtains a semi-detached status for the UK. But the EU either has a common single market rulebook or it ceases to exist. And a referendum may well produce a Brexit – Britain quitting Europe. For the first part of the coalition’s existence, the European issue has been quiet. But if the Banking Union treaty goes ahead, it will return to the heart of British politics with consequences no one can foretell.

How the EU can create a brighter future for farming

Anne McIntosh

FARMING has created many of Yorkshire’s most loved and evocative landscapes over many centuries.

In many rural areas of North Yorkshire, farming also underpins social and economic activity, especially in the uplands.

The EFRA select committee, which I chair, spends much of its time considering how Government policy can support food production and rural communities. Over the past two years, we have published several reports on these themes, including four specifically considering the European Commission’s proposals to reform EU farming and fishing policies.

At around 40 per cent of the EU’s total budget, the Common Agricultural Policy (CAP) is the single largest item of EU expenditure. The future form of the CAP is under discussion and a reformed policy should be in place after 2013. This round of CAP reform takes place against a background of increasing awareness about the twin challenges of food security and environmental protection. To be effective, the new CAP must ensure payments represent value for money and help support both environmentally friendly farming and the wider rural economy.

In many rural areas, farming provides direct employment and supports a great many businesses and professions that power the local economy and serve the entire community. The EFRA Committee believes that the CAP should enhance our food security by keeping land in productive agricultural use and good environmental condition. Even if we are not self-sufficient in food as a nation, we should retain the capacity to increase production whenever required.

UK farmers are highly dependent on direct payments made under the CAP; without them, more than half of our farms would be unprofitable. Removing those payments would drive even more farmers out of farming, which would harm local economies and risk degrading landscapes. I believe that CAP direct payments should be retained until 2020 at least.

While I am adamant that the UK needs a competitive and viable agricultural and fishing sector focused on food production, this should not diminish the contribution those industries can and should make to environmental protection.

The European Commission proposes a greater level of environmental obligation in the future CAP – known as “greening the CAP”. My committee agrees that in principle the future CAP should reward and encourage sustainable farming, looking after our natural resources such as soils, water quality or landscapes. Greening measures should not however come at the expense of productive, successful agricultures.

I believe that a single set of prescriptive rules applied across all of Europe is unlikely to deliver the desired environmental improvements, and so we advocate the Commission enabling member states to tailor environmental measures to local environmental and agricultural conditions.

The importance of bringing decisions back from Brussels also applies to the Common Fisheries Policy. The Common Fisheries Policy has rightly been criticised for many years – it has failed fishermen, the consumer and done little to protect fish stocks. My committee is scrutinising CFP reform proposals. We believe a new CFP should provide greater flexibility to enable countries that share a fishery to put in place more effective and appropriate protection measures.

This decentralisation of fishing policy would allow decisions on fishing policy to be delegated to regional groupings of member states with the fishing industry fully involved. In particular, the future CFP must protect the small-scale fleet, which is the lifeblood of many coastal communities t.

Aside from the CAP and CFP, the future for rural communities in Yorkshire will depend on a whole raft of other government actions. I am delighted that Yorkshire was chosen as one of the pilot areas for the roll out of superfast rural broadband. The provision of rural broadband will help businesses develop, enable faster and more efficient interaction with public bodies and help social and educational development.