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David Cameron faces new revolt over Euro court rule

Bitter clash: Nicolas Sarkozy says Britain 'has no industry'[i-Bitter clash: Nicolas Sarkozy says Britain 'has no industry']

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Nicholas Cecil

30 January 2012

David Cameron sparked a fresh Tory revolt today over a deal to save the euro.

The Prime Minister, who was attending an EU summit in Brussels, faced a backlash from Conservative MPs for allowing eurozone countries to use the European Court of Justice to enforce new fiscal rules.

Tory MPs had been buoyed by Mr Cameron's "veto" of a 27-nation treaty on tighter tax and spending rules, and his tough rhetoric, believing that Britain would also block the use of the court and the European Commission.

But Foreign Secretary William Hague confirmed today that Britain would permit eurozone nations to use the institutions, provided this did not threaten Britain's interests, including the City and the single market.

"We will reserve our position on the specific question about the use of the court," he said.
He stressed Britain was not agreeing to the "inappropriate use" of the court.

However, senior Conservative backbencher Bernard Jenkin said: "This is a retreat. What is the difference between refusing to sign the treaty of 27 and then allowing the hijacking of the EU institutions with a treaty of 17 plus?"

Mr Hague's comments also appeared to clash with the stance being taken by Work and Pensions Secretary Iain Duncan Smith, who said yesterday that Mr Cameron had "vetoed" the use of the institutions when he kept the UK out of the deal last month.

London Mayor Boris Johnson has also warned the Government about taking the "wrong approach" on the eurozone. Mr Cameron refused last month to sign up to a 27-nation deal after other EU leaders rejected safeguards to protect the City.

At the time he stressed: "In the months to come we will be vigorously engaged in the debate about how institutions built for 27 should continue to operate fairly for all member states, Britain included." But he also said there were "legal difficulties" about how the institutions were used.

Before the EU summit today, French president Nicolas Sarkozy, who has clashed ferociously with Mr Cameron over the eurozone crisis, took a fresh swipe at Britain by claiming the UK had "no industry".

After announcing a 1.6 per cent rise in VAT in France, he was challenged by a journalist who said such action had led to price rises in Britain. "The United Kingdom has no industry any more," Mr Sarkozy hit back.

He also said that France would press ahead, alone if necessary, to impose a new financial transaction tax which has been rejected by Mr Cameron as "madness".