The debate is about prospects for the European Council, but I begin by welcoming back to the Opposition Front Bench Mr. Hague. We remember some excellent parliamentary performances from him—if I may say that, at the risk of damaging his reputation—from the Front Bench, when he was Leader of the Opposition, and some fine speeches from the Back Benches over the past four years, including a notable one on Iraq and a notable but less noticed one in our last debate, in June, on prospects for the European Council.
Having seen 10 Leaders of the Opposition during my time in this place, I am in no doubt of the truth of the old saw that it is the worst job in British politics—[Laughter.] I am glad that the right hon. Gentleman agrees. I hope that it is of some comfort to him when I say that, in my judgment, being shadow Foreign Secretary is probably one of the best jobs in British politics: many trips abroad and few decisions.
As an avid reader of the Darlington and Stockton Times, I noticed how long the right hon. Gentleman has been prepared for his role. From my researches, I saw that in the issue for December 1988 he said:
"I believe that knowing what is going on in the world is a vital qualification for political office."
That is indeed true and only a few months later he was elected for Richmond.
Most of us remember with great affection the right hon. Gentleman's clarion call at the last election, "Two days to save the pound". I am deeply grateful to him for that call, because my electors heeded it; they voted for me and the pound has indeed been saved—[Hon. Members: "Ah."]—as long as the five tests remain unfulfilled. I am pleased to say that whatever else we are talking about tomorrow and on Friday, and perhaps Saturday and Sunday, or Monday, we are not discussing the euro at the European Council.
Tomorrow and Friday, European Heads of State and Government and Foreign Ministers meet in Brussels for the December summit. The agenda is wide, covering many aspects of the UK's presidency. I will deal briefly with these items towards the end of my speech, but the Council will be dominated by negotiations on the EU budget, so let me come to that first.
The House will recall that six months ago, five nations, including the United Kingdom, had to veto budget proposals that were put forward by the then Luxembourg presidency. We took over the presidency 10 days later and since then we have consulted widely about the changes needed to the budget. Last Monday—
In summary, our proposals put forward a budget set at €847 billion for the seven-year budget period of 2007–13, which is 1.03 per cent. of the national incomes of member states. That compares with the 1.06 per cent., or €870 billion, Luxembourg proposal, and the massive 1.24 per cent., or €1,025 billion, Commission proposal. Under our proposals, Britain's net contribution would be an estimated €58 billion over the seven years of the budget. The rebate would rise from an annual average in the current budget period of €5 billion to an annual average of €7 billion, but it would be around €1 billion less a year than its default setting so that we would make a fair contribution to the costs of enlargement. I will deal with that in more detail shortly.
Since the publication of the proposals last week, there has been an intensive round of formal and informal discussions. For the convenience of the House in the debate, I published earlier today a written ministerial statement outlining revised proposals following those discussions. Full details have been in the Vote Office since 11 am.
I apologise in advance for the fact that I will be unable to stay to hear all my right hon. Friend's remarks, although I hope to return later. Does he accept that while the great majority of hon. Members support the Government's position that we should not give up our existing rebate until substantial changes are made to the common agricultural policy, most of us—on this side of the House, at least—would not want Britain to rip off the poorer countries that have just joined by insisting on every pound of flesh that we can get out of them as well?
My hon. Friend's view is implicit in the support of hon. Members on both sides of the House for enlargement over many years.
Budget negotiations have never been easy. The equivalent European Council seven years ago failed to reach an agreement. We in the UK are working extremely hard for a deal this time, but I believe that no deal is preferable to a bad one. The negotiations are especially complex this time for three reasons: the impact on the budget of the massive enlargement of the EU that took place last May; the consequences of any budget changes on the UK rebate; and the need for fundamental long-term reform of EU policies and spending priorities. Let me deal with each of those in turn.
First, I will address enlargement. Two months ago, on
My right hon. Friend is apparently considering the accession of Bulgaria to the European Union. Does he consider that the state of Bulgaria's judicial system, as shown in the treatment of Michael Shields, makes it an appropriate candidate for agreement to accession at this time?
Ultimately, the judgment on whether Bulgaria is fully ready for accession will take place at the end of this year or on
We have actively pushed enlargement since taking office in 1997. To the great credit of the Opposition, it was the previous Conservative Administration who prodded and prompted the EU to enter into association agreements with each of the eastern European applicant states to prepare them for membership. In 1995, the then Prime Minister, John Major, described enlargement as
"the most important task facing the European Union".—[Hansard, 18 December 1995; Vol. 268, c. 1222.]
Two years later, the right hon. Member for Richmond, Yorks, when Leader of the Opposition, promised the Government his "full support" for this "long-standing", "British objective", which has been regularly repeated from the Opposition Front Bench ever since.
More than that, the Conservative party has understood the need to back up words with action. John Major's Administration, in the early 1990s, spent hundreds of millions of pounds, quite rightly, via the know-how-fund, on the reconstruction and regeneration of eastern Europe.
When, two years ago, we debated the accession Bills which brought the 10 new states into EU membership, the then shadow Foreign Secretary, Mr. Ancram, was very clear on the need to invest on enlargement. He said:
"Successful enlargement will require commitment and courage from the applicant countries as well as those who are already members."—[Hansard, 21 May 2003, Vol. 405, c. 1036.]
He also said, quite rightly:
"Countries such as Poland are crying out for investment in their infrastructure, and wise use of structural funds could be crucial in helping their economies to prosper."—[Hansard, 5 June 2003, Vol. 406, c. 372.]
So I believe that there is unity across the parties about the policy of enlargement, and about the need for us to help pay for it. That means helping to build up the economic and social infrastructure of these east and central European societies, so long neglected under Soviet control. It also means constructing better roads, railways and industrial estates, regenerating run-down areas, developing the social housing stock, and so on. That sort of investment directly benefits us too.
Last Tuesday, I attended the summit of the European Union's small business organisations here at the Palace of Westminster. At that meeting I was struck by the overwhelming view of the small businesses of the new entrants to the EU that under the British presidency of the EU the Lisbon agenda has not progressed one whit. What has gone wrong?
I do not accept that for a second.
First, just yesterday, we were able to gain political agreement in the European Council on the chemicals directive, which could have affected very adversely small and large businesses alike throughout Europe in the chemicals industry, including many British businesses. We now have unanimous agreement on what is called REACH—the chemicals directive—which will ensure higher environmental standards without damaging British business.
Secondly, we in the United Kingdom have led what has been called the four presidency engagement to secure deregulation across the Union. The result of that is tangible: at long last the Commission has grasped this agenda—like turning round a tanker. Commissioner Günter Verheugen, who is in charge of deregulation, announced at a conference in Edinburgh not long ago that 68 key sets of regulations would be turned back, and that many others will be revised. In addition, with the Netherlands, we co-chaired a meeting on rolling back the powers of the EU centrally so that much more power was delegated and devolved to individual member states.
Yes, progress on Lisbon has been frustrating for all parties and for all Governments who are committed to seeing an open economy in Europe. That has been because of the difficulties faced by some Governments—not the United Kingdom and not some others—who failed to take account of the fact that the world is changing. We are now subject to serious open competition from countries such as India and China, and the EU must change, or it will not survive. We have done a great deal on that.
Do not all the reports indicate that Britain has done better on the five-year plan set out in the Lisbon agenda than other EU countries? Under our presidency there has been progress, but will my right hon. Friend assure the House that when our presidency has ended we will push that agenda forward so that other European countries and the Commission are able to co-operate in order to reach the rest of the benchmarks?
My hon. Friend talks simply about progress within the United Kingdom. We have done extremely well and met almost all the Lisbon targets. The problem has been other EU member states.
I return to the issue of enlargement. The budget that we have tabled proposes that, given the need to pay towards the cost of enlargement, the EU spends about €150 billion on structural and cohesion fund projects in the new member accession states. That is a very significant increase—more than five times the support that they have been receiving up to now. Because relative prosperity and priorities have changed, there is a corresponding and significant drop in structural and cohesion fund receipts for every western European member state. Amounts and proportions vary, but, for example, Spain will receive just over half in the next financial perspective of what it received last time and Ireland will receive less than a quarter.
Significantly, even if there were no change in any of the budget arrangements, our net contribution would stand to rise by €11 billion from €39 billion in the current financial perspective to €50 billion in 2007–13, mainly because of enlargement. I have heard no one from any party in the House say that it should not stand to rise. I therefore suggest that the question before the House is not whether we should pay a fair contribution towards enlargement, but what that contribution should be.
As part of its recommended budget, the Luxembourg presidency proposed back in June that our contribution should rise by €36 billion, or 93 per cent., from €39 billion in this financial perspective to €75 billion—€25 billion above that default setting of €50 billion. We told the Luxembourg presidency emphatically that that was totally unacceptable.
Under our proposals, we have proposed a total net contribution of €58 billion—an increase of €8 billion above the €50 billion floor. We judge that to be a fair contribution. Were we not to make an offer of such magnitude, our contribution would not fairly reflect our position as one of the most prosperous nations in the EU. On the other hand, countries such as the Netherlands, Sweden and Germany would be making contributions way out of line with their prosperity, and that would not be fair either.
The Foreign Secretary will undoubtedly be aware that many regions in the United Kingdom, such as the highlands and islands, for example, have benefited greatly from EU structural funding. I am grateful to see in the latest budget proposals that the Government have given up on proposals for repatriating European funds entirely to countries such as the United Kingdom. Will the right hon. Gentleman assure the House that structural funding for regions such as the highlands and islands will not be negotiated away in the small hours during the final round of talks, and that we can be sure that such places will continue to benefit substantially from EU structural funding into the future?
My right hon. Friend the Chancellor set out in—I think—December 2003 his approach and our approach towards structural and cohesion funding in the new financial perspective. I do not know whether a deal will be struck tomorrow, the next day or the next. I cannot say precisely what its conditions will be. I can say that the area for negotiation is narrow. Of course we take account of the needs of regions such as the highlands and islands, which will continue, or should continue, to qualify for structural and cohesion funds. The hon. Gentleman will excuse me if I do not give him an exact guarantee at the moment, because that would be to anticipate the negotiations.
I thank the Secretary of State for giving away. [Laughter.] I am sorry, I meant giving way. Giving up all or part of our rebate causes my constituents a great deal of concern. It is difficult to sell it to them as a positive, bearing in mind that they face the closure of their accident and emergency department because of a £16 million shortfall in funding. They would much rather that some, if not all, of the money that is to be given up remained in the UK to be invested in the health service.
Indeed. The hon. Gentleman's party has long supported enlargement, and Conservative Front and Back Benchers have called for money to be put into structural and cohesion funds for eastern European countries. That money must come from somewhere, and it can only come from the more prosperous western European member states.
We have sought to reform the CAP, and we have done a great deal more than the previous Government did under John Major and Margaret Thatcher, when there was virtually no reform year after year. We want more reform, but I do not believe that the Poles, Czechs and Hungarians should be punished for the obduracy of a number of western European member states that have benefited unjustifiably from the CAP.
People in my constituency, which is not very different from Broxbourne, have benefited directly from the money that we have already put into structural and cohesion fund projects in, for example, Ireland and Spain. In the 15 years from 1988 to 2003, we contributed about £500 million towards structural cohesion fund projects in those two member states. In return, there has been a £27 billion annual increase in trade with those countries, which has certainly benefited firms in my constituency and, I suggest, in Broxbourne. We are not beggaring ourselves by offering that money—we are helping ourselves directly. Building up the economies of eastern Europe provides economic benefits and increases the political stability and the overall happiness of those societies.
I fully accept the logic that the more prosperous states should assist the newcomers, but I remind the right hon. Gentleman that west Wales and the valleys, which constitute a large part of Wales, benefit from objective 1 status. Will he assure the House that whatever deal is struck—hopefully in the next three days—will not affect the amount of assistance that is available, as the gross domestic product of west Wales and the valleys is still, unfortunately, less than 75 per cent. of the average EU GDP?
I accept the point that the hon. Gentleman makes. My hon. Friend the Minister for the Middle East will provide more details for him and Danny Alexander. We are conscious of the needs of areas such as west Wales, the highland and islands and Cornwall, which qualify for objective 1 status, and we want to ensure that, as far as possible, they are protected.
After the rejection of the European constitution by France and Holland there was a period that was described as a "pause for reflection". That was about six months ago. Have the Government been reflecting, and why have we not heard anything in today's debate about the fact that the constitution is dead but certainly not buried? Exactly how does the right hon. Gentleman respond to the recent statement by the German Chancellor that her coalition would reintroduce the constitution in the first months of the German presidency, which starts at the beginning of 2007? [Interruption.]
Yes, I shall take my time, and reflect on my reply.
The blunt truth is that we have had rather more important things to do in the real world than try to revive the constitution. If the hon. Gentleman has abandoned the habits of a lifetime to suggest that he wants the document to be revived, I will listen carefully.
I have just explained what I think. The hon. Gentleman knows what I think anyway, so I am not entirely sure why he asked the question. Chancellor Merkel is the new leader of the centre right party in Germany, just as there is a new leader of the British Conservative party which, apparently, is a centre right party, although I shall come to that later. New leaders say new and interesting things, and perhaps it would be appropriate to have a period of reflection to consider them.
The Foreign Secretary intimated that Britain may be prepared to give up about £1 billion a year of anticipated income from the rebate to try to achieve a deal later this week. Will he confirm that that is not included in the pre-Budget report figures that were published by the Chancellor on
I think that the hon. Gentleman is correct to say—[Interruption.] Well, the figures could not have been included, because they have not been decided yet. In a column in the world's most important newspaper, the Lancashire Evening Telegraph, which I hope Members read, because it is even more important than the Darlington and Stockton Times—
That is our first disagreement.
In a column to be published tomorrow morning, I have told my constituents that if they are thinking about putting a bet on the outcome of the negotiations tomorrow and Friday they should place it on a horse instead, as I am not predicting the outcome. The pre-Budget report necessarily includes firm estimates of firm commitments, and the Chancellor will naturally seek to adjust it in the light of any negotiations that are concluded.
If my hon. Friend will allow me, I should like to make some progress before giving way.
The rebate was designed to deal with the unfair treatment of western European states of comparable prosperity. It was never intended to be a means of redirecting money from much poorer states to the United Kingdom. Indeed, in the early 1980s, when the rebate was negotiated, there was no serious expectation that the European Union could or would expand eastwards into the Soviet empire. I have been unable to find any occasion on which an hon. Member on either side of the House said that the new and poorer accession states should pay, directly or indirectly, the rebate in full. In any event, as I have already told the House, the rebate will rise from an average of €5 billion per annum in this period to €7 billion per annum in the next. It cannot therefore be said that we are giving it up. Our offer on enlargement involves a reduction of about €1 billion per annum in what the rebate would otherwise be. However, the rebate remains on every penny and cent of spending on the common agricultural policy anywhere in the 25 member states of the European Union, and on all spending in the 15 western European states.
When Baroness Thatcher made her statement on the Fontainebleau summit in 1984, you and I will remember, Mr. Speaker, because we were both in the House, that it did not quite receive the rapturous reception that is now written up for it. I asked the right hon. Lady why she had failed in her stated intention of achieving a broad balance between the United Kingdom's contributions and the amount that we got back. I pointed out that in the following year, and the year after, despite the rebates, Britain's net contribution would be more than it had been in the previous three years.
As it turned out, I underestimated the scale of the problem that Mrs. Thatcher was describing, for over the following 20 years the United Kingdom paid—after the rebate—twice as much net into the European Union compared with similar sized economies such as those of France and Italy. Under our proposals, we will for the first time achieve broad parity. For the first time in the 30 years of our membership and for the first time in the 21 years since the rebate was agreed, we will be making a net contribution broadly equivalent to those of France and Italy.
Mrs. Thatcher was unsuccessful in another respect too: she did not constrain the growth of the European Union's budget as a share of the European Union's economy. Under successive Conservative Administrations, it rose by 50 per cent. It is this Government who have led the way to budget discipline—an average of 1.03 per cent. of gross national income over the next financial period and falling to below 1 per cent. on a commitments basis by 2013. Finally, the previous Administration failed to sustain reforms which dealt with the inequalities underlying the rebate—the imbalances of their spending on the common agricultural policy.
That leads me briefly to my third point: the case that we are making for reform. Reform in the European Union is necessary if the Union and its member states are to compete effectively in a world economy that has changed beyond recognition over the past 20 years. We are pushing for parallel reforms in the World Trade Organisation negotiations, which got under way yesterday. We are proposing in our budget a full-scale review of expenditure and revenue, including agriculture, and the right of the EU to make further decisions in this financial period, rather than having to wait until 2014.
When Mrs. Thatcher returned from Fontainebleau she admitted to the House that because her Government had taken so much time on the problems of the budget, they had not been able to turn as much attention as they should have done to some other vital problems in Europe. We have done better. Away from the headlines, the Government have been getting on, successfully, with the vast majority of the business of a presidency.
In pursuing our agenda we have worked closely with the European Parliament. British Ministers have visited the European Parliament on more than 50 occasions. My right hon. Friend the Minister for Europe sends his apologies to the House. He is at the European Parliament today—we have an able substitute in my hon. Friend the Minister for the Middle East—and my right hon. Friend the Prime Minister will be at the European Parliament tomorrow. This engagement with the European Parliament has been particularly worth while in our discussions with British MEPs. Indeed, I am heartened to say that we have been greatly assisted by British MEPs of all parties.
As the House knows, each of the main British political parties is able to magnify its influence in the European Parliament through membership of the mainstream European political groupings. My party does so through the party of European Socialists, the Liberal Democrats do so through the Alliance of Liberals and Democrats for Europe, and the Conservatives do so through the European People's party and European Democrats or EPP, which covers the centre right. Who joins which group is a matter for MEPs and their parent British political party and not for the House, but the consequence of those decisions can directly affect the national interest. The House therefore has an interest in that.
All those groupings are loose confederations. There cannot be a single party which agrees with every item on the European political agenda. National party groups are free to depart from the groupings' line where they wish. That right was enshrined, as far as the EPP is concerned, by the right hon. Member for Richmond, Yorks when he was Leader of the Opposition in the agreement that he made with the European People's party in 1999. However, there is real practical value for the UK in these groupings. In particular, there is practical value in the Conservative party's membership of the EPP, because the EPP is the largest grouping in the Parliament and has crucial positions on many of the key committees. It holds such positions on five of the key committees, and I am grateful for the support that we have received from those co-ordinators.
The right hon. Gentleman recognised the importance of that when he was Leader of the Opposition. Indeed, as I said, he negotiated an agreement in 1999. When he signed that deal, he said that Tory MEPs would be joining
"an enlarged coalition with centre right parties and will work alongside allies old and new".
He went on to say:
"Conservatives will stick to their principles and have influence".
His predecessor continued the link, as did his two successors. Now we read that the right hon. Member for Richmond, Yorks is being pushed by his new leader, Mr. Cameron, to leave the EPP
"in a matter of months" and to form a new grouping.
"the MEPs whom no other group will tolerate, and include people like Jean-Marie Le Pen, Alessandra Mussolini and"— even worse—
In a later article he describes them even more succinctly as
"fascists and nutters that nobody else will sit with".
Mr. Davies has asked whether the Conservatives really want to sit with
"the barmy-army of obscure right-wing continental politicians".
The deputy leader of the Conservatives in the European Parliament who used to sit in the House, Sir Robert Atkins, thinks his new bedfellows will be
"a pretty unappealing ragbag of fringe politicians".
He gives further details:
"We would find ourselves in the company of The League of Polish Families (racist and Europhobic), the Danish People's Party (Ian Duncan Smith banned us from even talking to them!), the Italian Fascist Party, and, of course, UKIP".
Indeed, he quotes the right hon. Member for Richmond, Yorks as saying in 1999:
"I simply cannot afford to have my political opponents in the House of Commons suggesting I am isolated from the mainstream Conservative parties on the continent of Europe."
That is exactly what his new leader is proposing.
I am therefore not surprised that when the right hon. Gentleman was interviewed about that on the "Today" programme he was plainly extremely uncomfortable. After all, it showed that the promised unity of the Tory party had lasted for all of 36 hours. But it also shows that the Conservative leader, the hon. Member for Witney, is prepared to tear up solemn manifesto commitments, for the Conservative election manifesto in 2004 stated that
"Conservative MEPs will remain allied members of the EPP-ED parliamentary group for the duration of the 2004–2009 legislature."
In the right hon. Gentleman's argument with his new leader he has our full support and our full backing in fighting for what is right and for the national interest, and in fighting for a Conservative party that at least on one thing sticks to the principles on which it was elected only 18 months ago.
Having been a Member of the European Parliament I agree with the thrust of the Foreign Secretary's remarks and pay tribute, too, to Conservative MEPs. Does the right hon. Gentleman agree that this is a particularly futile gesture, given that the Conservative party's objection, as I understand it, is to the commitment of the EPP to ever closer union, which will of course be determined in treaty negotiation between the member states, and Members of the European Parliament will have no influence over that matter?
Indeed. The Labour party is a member of the party of European Socialists. No one is suggesting that those are wholly disciplined parties or that we have to agree to every last jot and tittle of what is said, and we do not. All of us accept that ultimately it is for the national group to determine its approach. I make the point seriously, and the right hon. Member for Richmond, Yorks agrees with it, because that has been his position consistently over many years: the European Parliament exists and it has certain powers. It is important that we work with it in the national interest. There is nothing disingenuous in my saying that I applaud the way in which Conservative MEPs have worked with those on the Liberal Democrat Benches and on ours in the national interest. Much of that influence will be lost if they go the way not of the right hon. Gentleman, but of the hon. Member for Witney.
I turn briefly to the wider progress that has been made in the European Union during the UK presidency. I mentioned the accession negotiations with Turkey. We have also opened accession negotiations with Croatia. The arrest last week of Ante Gotovina, the indicted war criminal, underlined the importance—in this, again, we had all-party support—of sticking very firmly to clear conditionality with Croatia, unless and until it assured its co-operation in delivering up Gotovina. That has been achieved.
We have reached agreement on reform of the European Union sugar regime, which will save between €3.5 billion and €4 billion each year. We have embedded the principles of better regulation, which I dealt with earlier. We have agreed REACH, the directive on the registration, evaluation and authorisation of chemicals.
In the field of justice and home affairs, Ministers have agreed a new Europe-wide counter-terrorism strategy and to manage migration and illegal immigration better. We have pursued an active common foreign and security policy, aid commitments have been doubled and a strategy for Africa has been introduced. We have also launched the international finance facility for immunisation.
We have done a huge amount on Sudan, Aceh and the middle east peace process. At the beginning of our presidency, we inherited a Union coping with the Dutch and French rejection of the constitutional treaty and the failure of the Luxembourg budget proposals. We have used our presidency to help set a pathway for a modern, competitive Europe, and we have taken practical and measurable steps along that path. Now we want to secure a fair budget. In the negotiations, which start tomorrow, the Prime Minister and I are determined to do everything that we can to secure a deal that is good for Britain and good for Europe—building a stronger, wider, more prosperous Union in which our citizens, British and European, can thrive.
I am grateful to the Foreign Secretary for the kind remarks with which he began his speech and for his welcoming me back to the Front Bench. He attaches an importance to the Darlington & Stockton Times that is appropriate for any Foreign Secretary of this country.
I am delighted that my mere presence on the Front Bench has produced the radical reinterpretation of the Government's policy on the euro so that the pound has now been saved. When the Foreign Secretary discusses that reinterpretation of policy with the Chancellor and the Prime Minister, he may be carrying out a job rather like the one that he described for me, which involved doing a lot of travel but taking very few decisions.
I am sure that we will have some vigorous debates across the Dispatch Box. My comments to the Foreign Secretary will be entirely free of personal abuse. According to the new convention in the Foreign Office, we can leave that to retiring ambassadors, who will no doubt continue to dish it out, so there is no need for the Opposition to indulge in such things.
As there will inevitably be much disagreement, I shall start on a note of concord and congratulation to the Foreign Secretary. The negotiations on Turkish accession were protracted—they must have been very difficult and undoubtedly required hard work and skill—and he successfully steered them to the conclusion that we all wanted. I have no inhibitions in congratulating him on that achievement and hope that future blockages in the process of admitting Turkey to the European Union can similarly be overcome.
There may be other areas of agreement across the Floor of the House and it is entirely possible that one of them is the fate of the European constitution. In addition to his role at the last hour in saving the pound, the Foreign Secretary played a key role on the European constitution, because if, as was reported, he persuaded the Prime Minister to commit the Government to holding a referendum in Britain, and if, as was reported, the British commitment prompted President Chirac to make the same commitment in France, then the Foreign Secretary did more than any other individual to ensure that the constitution was wrecked in May and June by voters in France. Although he is careful not to show any pleasure about that outcome, I cannot recall him issuing any words of regret, and even now there is no sign that it is causing him undue distress.
If the Prime Minister and the Foreign Secretary were happy to see the deeply flawed constitution collapse, why were they prepared to recommend it to the British people in the first place? That they should keep their quiet satisfaction quiet is understandable. What is not understandable—my hon. Friend Mr. Cash has made this point—is that they should make no use of the impasse on the constitution to take the initiative, to show leadership in Europe and to put forward ideas of their own.
It is six months since both France and the Netherlands gave the constitution a resounding no. Within days, the Foreign Secretary announced a "pause for reflection". We have been having the pause for six months, but where is the reflection? He was unable to enlighten us on that point in his speech. Is this not the time, buttressed by grave anxieties about the remoteness and unresponsiveness of EU institutions revealed by the referendums, to champion fresh ideas about a more flexible Europe with a stronger role for national Parliaments, which many hon. Members on both sides would be happy to support?
Was not that six months the time to speak the much needed truth that ever mightier central institutions in a tightly integrated bloc are an idea whose time has gone? Instead, in the absence of any alternative, the new German Government say that they will "seek to advance progress" on actually adopting the constitution once Germany takes the presidency in 2007.
I agree with the right hon. Gentleman's comments. Does he remember that the first attempt to promote the constitution collapsed because of the resistance of Spain and Poland? At that time, the press reported that the champagne corks could be heard popping in Downing street. This time, the Government were more modest in their reaction to the collapse of the constitution, which is welcome.
I do not know about welcoming the Government's modesty—we would welcome a bit of vigour in saying what they would do instead of the constitution. However, I am glad that the hon. Gentleman and I agree about the Government's policy.
Perhaps the Minister for the Middle East, who is winding up for the Government, will tell us how long the pause for reflection will last. Is it a pause or has it become a way of life? Are the Government content to see those democratic verdicts one day ignored and the whole process revived? Would it not be a great shame if the Foreign Secretary's excellent work in doing such damage to the constitution were of no avail in the end? If the Government are not happy to leave a vacuum in which others will insert their own ideas, when will they propose something different of their own?
Do the accession negotiations with Turkey indicate the future viability of the constitution? The constitution would have entrenched a relationship between small and large states that would be unsustainable if Turkey were ever to enter the EU.
Having served on the European Convention, the hon. Lady learned a lot, which appears to have reinforced her hostility to many of the ways in which Europe is developing or trying to develop.
Is the Foreign Secretary content to see the charter of fundamental rights, a document which, in the hilarious but notorious phrase of Keith Vaz—we cannot debate these matters without mentioning it—has the legal status of The Beano incorporated into new EU laws? The famous Beano document has even been cited in the European Court of Justice, although it is part of the constitutional treaty, which has been rejected.
Why did the Government not raise more than a whisper of protest when the ECJ created the power to introduce harmonised criminal law across the EU, a judgment that was fought by 11 Governments, including ours, but which brought forth from the Government only the response that
"We believed it was inappropriate to harmonise criminal law at EU level."?
Is that it? Are they going to say that it was "inappropriate" and leave it at that, without any attempt to put right in the future the relentless extension of EU competence by the ECJ that has been taking place in recent years? Are the Government entirely happy to see the steady loss of their own power to govern this country in its own best interests? Is it not time to stop going neatly along with an orthodoxy of integration that is not only out of favour with the peoples of Europe, but seriously out of date in the 21st century?
I, too, congratulate the right hon. Gentleman on his elevation to the Front Bench yet again. He has spent eight minutes discussing the constitution and other such matters, which are not the concern of the crucial discussions that will take place this week. When will we hear about Conservative party policy on those issues?
The hon. Gentleman will hear plenty, but as the Foreign Secretary spent the last eight or nine minutes of his speech discussing Conservative MEPs in the European Parliament, the hon. Gentleman cannot lecture us about discussing matters that are relevant to the EU summit. These debates provide an opportunity to raise all issues about Europe.
Following the remarks by Keith Vaz, is my right hon. Friend aware that the European reform forum has been taking evidence from not only Mr. MacShane, my right hon. Friend Mr. Redwood, Will Hutton, Lord Owen and others with a view to achieving a reasonable analysis of what has been going wrong with the existing treaties, in order to form a clear basis on which to make policies that produce constructive answers to the questions that my right hon. Friend Mr. Hague is rightly asking but which, regrettably, the Foreign Secretary simply ducked?
I am delighted that Keith Vaz is playing a more constructive role outside the House than he played a few moments ago inside it—that is wonderful news.
It is common ground across the House that Europe faces a crisis—the Prime Minister used the word "crisis" in his address to the European Parliament in June—and massive demographic social and economic challenges. I believe that it is also common ground that the EU has so far shown few signs of being able to meet those challenges. When the Prime Minister came to this House to trumpet the Lisbon summit, he announced
"a sea change in European economic thinking" along with a "fundamental reorientation" that would bring
"concrete measures with clear deadlines" and
"urgent measures to make the European economy as a whole more competitive".—[Hansard, 27 March 2000; Vol. 347, c. 21.]
Five years after all that, we find the Government calling plaintively for the implementation of the Lisbon agenda. The terrible truth of it all was laid bare by the report last year by Mr. Wim Kok and his distinguished colleagues, which pointed out that most of Lisbon had never been implemented, that as a result Europe was losing ground more quickly to the United States and Asia, that
"its societies are under strain" and, as he ominously summed up:
"What is at risk in the medium to long run is nothing less than the sustainability of the society Europe has built, and to that extent, the viability of its civilisation."
The goal of the Lisbon agreement was to make Europe into the world's foremost knowledge-based economy by 2010. Now that we are halfway there, we can see that there is no prospect of being able to make such a claim in five years' time—far from it. Two studies in the past week have shown that European spending on research and development is falling further behind target and the gap with the United States and Japan is widening. Such figures are deeply disturbing, because it is obvious that, as European economies will not be able to compete with China and India on price or have a larger available work force, it is self-evidently vital that their capital must be used more intensively and productively if they are not to suffer severe economic consequences.
It is impossible to envisage Europe competing effectively without high levels of investment in R and D and the highest possible standards of higher education. Yet the United States is striding ahead in higher education-based research and now has 17 of the world's top 20 universities. The Prime Minister raised higher education as a matter of serious concern in his second speech to the European Parliament on
Anyone looking at the EU from outside, dispassionately and objectively, would think that tackling these issues at this and every summit would be the almost daily preoccupation of European leaders. Even according to the Commission's own forecasts, the European share of world economic output is set to be virtually halved in our lifetimes. The absence of any sense of urgency is remarkable and it is hard to see it as anything other than a collective dereliction of duty by Europe's leaders. Faced with a massive loss of relative economic strength, with profound consequences for the future of employment, prosperity and social cohesion and justice, the general response is indistinguishable from inertia and indifference.
On leadership in Europe, what would the right hon. Gentleman say to Mr. Clarke, who described his new leader's policy on Europe as "head banging"? What would he say to the Tory MEPs who said that it showed "bad judgment", would "create disunity", is "cloud cuckoo land", "absolute madness", "very curious", "barking", and "silly", and shows that he "knows nothing about it"?
It is interesting that when we try to discuss some of the greatest issues that will affect Europe in the future, the hon. Gentleman can only read out a party brief about Conservative MEPs in the European Parliament. I assure him that nothing will be more encouraging to my right hon. Friend the Leader of the Opposition and me in carrying out the policy than that great concern is expressed about it by Members from other parties in the House of Commons.
It is only fair to acknowledge—the Foreign Secretary made this point in his speech—that the Commission under Mr. Barroso has shown an increasing consciousness of such issues and, in a first tiny sign of hope, has managed to withdraw 68 pending proposals for legislation as part of a deregulation initiative. However, we must not get overexcited about that, as it turned out that one third of those withdrawn regulations were defunct association agreements with countries that have now joined the EU, and the total of 68 regulations withdrawn has to be set against the net increase of 4,806 regulations and directives over the past eight years alone.
To be fair to the Prime Minister, his speech to the European Parliament in June did call for a change of direction. He said there was
"a crisis of political leadership".
He is right. He questioned whether Lisbon was being implemented and whether the EU was in any way
"reconnecting Europe to the people".
He was clear that
"we cannot agree a new financial perspective that does not at least set out a process that leads to a more rational budget", and he said in ringing tones at the end that the people of Europe
"are wanting our leadership. It is time we gave it to them."
Subsequently, there has been astonishment in Europe that such bold rhetoric has been followed by so little initiative. While to us in Britain it is entirely normal to hear a brave speech by the Prime Minister that bears no resemblance to what follows, it comes as a shock to people in other countries. As the former President of Poland put it,
"When I read what Tony Blair said in front of the European Parliament, I harboured the hope that the Brits would arrive in the Presidency with a new momentum . . . since then the weeks pass and scepticism grows."
MEPs have apparently circulated missing persons notices featuring the Prime Minister's face, one of which said:
"we have lost the President of the Council. From what we hear he is the British Prime Minister Tony Blair, although nobody has seen or heard of him . . . one rhetorically brilliant speech without consequences or follow-ups is simply not enough to secure success."
Everyone in this House should be aware of that, and the Prime Minister above all.
I doubt that Foreign Office Ministers can put their hands on their hearts and say that Britain is now more respected in Europe than six months ago, or that any seasoned commentator or other Government in Europe judges their presidency to have been a success. Indeed, it seems unlikely that even they would judge it a success, given the objectives that they originally set out for themselves.
This debate on Europe in the run-up to this summit is different from those on most previous occasions. We have often engaged in a fairly predictable debate—for and against the constitution, or the social chapter, or the euro, or whatever it may have been—but this time Government and Opposition agree that Europe faces an intensifying crisis, including a crisis of leadership, to use the Prime Minister's own words. The tragedy is that, for whatever reason, and with all the admitted constraints on what can be achieved in a period of a few months, the Government have not shown the consistency, energy and purpose necessary to have any hope of alleviating that crisis or changing prevailing attitudes. They have often claimed to be winning the argument in Europe, but there is little evidence of that.
One deeply depressing example of failing to win the argument is being played out in the world trade talks in Hong Kong. Could not the Government have given a stronger lead towards pushing the European Union into a position more committed to free and fair trade and assisting real progress in a way that would help developing countries? Has not the lack of any reform of the common agricultural policy become a major problem for world trade negotiations, as demonstrated by the statement by Peter Mandelson's spokesman that EU subsidies will not be reduced by "one cent"? Should not the EU be going much further towards reducing tariffs and export subsidies? Is it not depressing and disturbing for the Government when a Commissioner who was until recently one of their own colleagues attacks the idea of liberalisation and states his opposition to
"what the consequences would be if we were simply to do as some in the British government . . . are calling for"?
I hope that when the Minister winds up he can say whether he considers that the Government have used all possible weight to influence the world trade talks in a way that would open up opportunities for developing countries without imposing over-stringent conditions on them and, if they have used such weight, why it has failed. Surely we did not join the EU to stand in the way of trade liberalisation and free trade. The Swedish Trade Minister said:
"The French have been very active, not least in the public debate, while there has really been very little said by the free traders."
Why has so little been said?
As always, my right hon. Friend makes a terrific case. However, is not it the case that, whatever our success in winning the argument, root-and-branch reform is needed to ensure that the people at the rudder and those in the engine room—the Commission—begin to follow the instructions of the skipper, that is, the politicians?
The right hon. Gentleman is discussing common agricultural policy reform and I do not believe that a single hon. Member would not like reform as urgently as possible. How much does he believe that British farmers should receive in CAP payments? Last year, they received £1.7 billion. The Duke of Westminster received £448,000, the Duke of Marlborough received £511,000, the Duke of Bedford received £366,000, the Earl of Plymouth received £459,000 and the Marquess of Cholmondeley received £306,000. Are all those payments appropriate?
No, of course they are not. Reform of the CAP would greatly reduce such payments. Huge payments are also made to large farms throughout the rest of Europe.
We agree on the need for reform of the CAP, which brings us naturally to the hot topic of this weekend's summit—the budget and the position of the EU rebate. An elector who participated in this year's general election only seven months ago would have had no doubt where the Government stood on the matter. Their mantra was that the rebate was "non-negotiable and fully justified." Any attempt to reduce Britain's rebate would be vetoed and blocked. It does British politics no credit when a cast-iron, comprehensive commitment, which was so freely given, is rapidly and deliberately abandoned. How Ministers expect any future assurances that they give on such matters to be believed is beyond imagining. Yet only five weeks passed after the general election before the Prime Minister devised a new and fascinating formulation. On
For those of us who are connoisseurs of the Prime Minister's extraordinary ability to face several directions simultaneously that statement was a particular treasure.
When the study comes to be written of the Prime Minister's techniques, the statement should have a chapter devoted to it. First, there was the fascinating use of the word "period", which initially seemed to derive from his recent visit to the United States and his habit of starting to imitate any audience that he wants to please. However, he was using it in a more calculated way—to give emphasis to an otherwise meaningless statement. The phrase,
"we will not negotiate it away" literally meant that the Government would not give away the entire rebate but might give away 10 per cent., 50 per cent. or even 90 per cent. The word "period" was used simply to fool everybody, like thumping the table hard while saying, "I don't know." It is testimony to the Prime Minister's skill in double-speak that he largely got away with that emphatic but meaningless statement.
The statement's meaning soon became clear. The rebate was indeed up for negotiation but only in return for genuine reform of the CAP. As reported on
"40 per cent. of the budget that goes on agriculture, which employs only 5 per cent. of the people".
He said that there had to be fundamental changes
"in particular to the agriculture policy."
That was not the Prime Minister's policy when he ran for election only a few weeks previously. Nevertheless, it was not an unreasonable policy.
Offering to trade part of the rebate for sensible reform of the CAP, with a view to making the EU work more effectively and without additional expense to the British taxpayer, was not an unreasonable negotiating position. The Government were right to stress the urgency of the matter, with the Prime Minister saying,
"Europe just cannot wait 10 years or more for the change that is necessary."—[Hansard, 20 June 2005; Vol. 435, c. 523.]
The Chancellor was applauded at the Labour party conference for saying:
"If we are to make poverty history . . . let us seek to make the excesses of the CAP history."
The Government were in a strong negotiating position. Since the rebate is a legal entitlement, with any changes to it subject to our veto, it is clear that there would be no need to ask the British taxpayer to stump up billions of pounds of extra contribution to the EU, on top of the massive contribution that they already make, without getting something serious in return.
The moral and economic grounds for CAP reform are strong. There are many willing allies on the subject in Europe and serious reform would free resources to help the new and future entrants to the Union. All in all, the position, albeit different from that in the election campaign, had merit and strength. Then the Government came up against the response of President Chirac, whose statement on Bastille day was intransigent:
"I am not willing to make the slightest concession on the Common Agricultural Policy".
It was also bizarre. He said that
"the CAP is the future".
How about that for a perspective different from the Government's?
At some stage after that highly unco-operative response, panic seems to have set in in Whitehall. The talk of firm leadership in June was drowned out by the noise of gears crashing into reverse in November. The Government's position moved from being described by the Deputy Prime Minister on
"the Prime Minister certainly wants to get rid of the present CAP."—[Hansard, 6 July 2005; Vol. 436, c. 299.]
to one of seeking only the vaguest commitment to future reform.
Moreover, no plan for CAP reform seems to have been submitted by the Government. The EU Agriculture Commissioner wondered whether Britain's proposals were
"just a gimmick or game-playing" and the French Agriculture Minister said two weeks ago:
"Ever since my arrival nearly a year ago there hasn't been a single EU Agriculture Ministers' meeting where reform has come up, including from the British Minister."
The Slovak Prime Minister said in October:
"Silence reigns. We do not have information . . . it is . . . important . . . that we ask our British colleague how he imagines the contours of the reform."
Does not the Foreign Secretary consider that the deployment of powerful arguments for fundamental change and the readiness to sacrifice a rebate of immense financial value to this country required a more serious, informed and diplomatically effective attempt to create some real momentum for reform? How on earth could the Government talk in that way yet come up with no proposals so that even well disposed countries were left muttering in the dark?
As the hon. Gentleman knows, the United Kingdom is one of the largest contributors to the EU. To talk of any other country in the EU subsiding us is therefore not the correct analysis. We already send enormous subsidies to the countries that are entering the EU. It is no good describing my position as unreasonable since it was the Foreign Secretary's position only a few weeks ago. It is right to consider trading part of the rebate in return for genuine reform of the CAP. That is the position from which the Government have now retreated. They have moved from talking about getting rid of the current CAP and showing "firm direction" and "firm leadership", according to the Prime Minister, to a policy of progressive capitulation that will cost British taxpayers at least £5.5 billion with nothing guaranteed in return. That is the equivalent in expenditure of 53,000 nurses or 39,000 teachers.
My hon. Friend Hugh Bayley asked an important question to which the right hon. Gentleman replied inadequately. We are not giving up a single penny of the rebate in so far as it affects any spending in the 15 western European nations or spending on the CAP. However, we unapologetically believe that we should make a fair contribution to the costs of enlargement and investment in the structural and cohesion funds for the 10 new accession states. That has been the Conservative party's consistent position. Given that, and all the calls for spending on those eastern European states, why does not the right hon. Gentleman have the courage of his convictions and say that the Opposition should support the Government in making that fair contribution?
I have the courage of the Foreign Secretary's convictions only a few weeks ago, when the rebate was not even to be discussed unless that happened alongside genuine reform. He was absolutely right to say in his speech that there was common ground across the Floor of the House on a lot of these matters. The issue is not whether we pay our fair share to help the countries that are joining the EU, but what that contribution should be. He was also right, in his initial negotiating position—a powerful one, given the legal entitlement to the rebate—to insist on reform of the CAP so that other countries as well as ours paid their fair share to those EU entrants. Now, however, the Foreign Secretary's own concrete concessions are being given without any bankable commitment to serious CAP reform for years to come. Rarely in the field of European negotiations has so much been surrendered for so little. That is my criticism of the Government's position.
Could it be that the former ambassador to Washington is right when he refers to
Have not things come to a sorry state when the Government's position is mercilessly mocked in an e-mail from one of their own ambassadors, our ambassador to Warsaw, who said that
"we all know that the absurdity and hypocrisy of this process are passing any reasonable limit."
He characterised the Government's position by saying:
"I am being asked to give more UK taxpayers' money to an EU which for years cannot produce properly audited accounts. Mon ami Jacques, with the support of most of you, is nagging me to give the EU more money while refusing to surrender an inch or even a centimetre on the CAP—a programme which uses inefficient transfers of taxpayers' money to bloat rich French landowners and so pump up food prices in Europe, thereby creating poverty in Africa, which we then fail to solve through inefficient but expensive aid programmes."
If the Government's own ambassadors do not believe in the Government's new position, who does? The ambassador even advocated setting aside the £5 billion that the Government propose to surrender from the rebate in order to create—I cannot quote every word of this in the House—a special development fund cutting out
"all the [expletive deleted] EU bureaucracy" and the amount that goes into
"sticky transaction costs, local and Brussels corruption, overhead and other rubbish."
What is this man doing as an ambassador when he should clearly be a European Commissioner?
Will the Minister explain, when he responds to the debate, why the extra concessions on the rebate, announced on Monday last week, were not factored into the budget deficits for the coming years set out by the Chancellor that same afternoon? If he had been a prudent Chancellor, he would, of course, have wanted to take account of, and make provision for, money that the Foreign Secretary was proposing to give away. If not, it seems that the Foreign Secretary has removed a large slice of any remaining margin possessed by the Chancellor to meet his golden rule, even on the new fictionalised basis.
Somehow, from a position of enormous strength, strong domestic support, many potential allies and a good moral case, the Government have managed to emerge in Europe as the villain of the piece, making concessions that are paid for directly by British taxpayers while simultaneously alienating the new entrants to the EU, upsetting almost everyone else, gaining no concessions whatever from the French and failing to achieve even the slightest part of their objective. Is that not a sorry position for a Government to have reached in advance of an important summit? While there is great agreement across the House on the causes of the European crisis, this much-vaunted presidency of the EU has done almost nothing to resolve them.
It is always a pleasure to follow Mr. Hague. May I congratulate him again on his appointment to the Front Bench? His speech was full of witticisms and knock-about stuff. The pantomime season really has begun, but I am not sure whether he is Cinderella or Mother Goose.
The right hon. Gentleman and I have a lot in common. It is not well known that I gave him his first job in the House, when I was chairman of the very important all-party footwear and leather industries group—probably the high point of my career. The right hon. Gentleman was a new Member and I made him my secretary because his footwear was always in a good state of repair. I am glad to see that he has done so well. We have another bit of shared history. When he was the Leader of the Opposition and I was Minister for Europe, we both took a bus tour around the United Kingdom. Mine came first—I had a customised campaign bus, in which I undertook 25 engagements in five days. The truck for his campaign to save the pound was sited in St. Albans. We did not actually meet, but I think that he abandoned his tour shortly after it began, such was the state of the Conservative party at that stage. The other thing, of course, is that we both had more hair at the time.
This is an important debate and I am glad to see that we have three heavyweights on the Front Benches talking about foreign policy. I congratulate my right hon. Friend the Foreign Secretary on winning the Minister of the year award in The House Magazine last week. That award was well deserved, and I did in fact vote for him. I hope that he will remember that. These European debates, which often used to attract only the usual suspects, now gather a much larger audience. That is good, because it is important that we should have strong, vigorous debates on Europe, and it is always good to know what Conservative party policy is on Europe.
My regret, in listening to the right hon. Member for Richmond, Yorks, was that he spent 21 minutes talking about issues that were really not the concern of the forthcoming discussions in Brussels. It is important to have this debate now because we have been calling for a debate on the UK presidency, but it is a pity that he wasted the opportunity to put forward Conservative party policy. He spent his entire speech—eloquently and wittily, as always—attacking the European Union, saying that it was not up to the job, and criticising the Government and officials. That was a waste of an opportunity.
We have a real opportunity to show leadership in Europe, but every time we discuss the European Union in the House, our debates consist of the Opposition attacking everything that the Government are proposing, and criticising Ministers for not standing up for Britain's interests. The right hon. Gentleman knows, as a former member of the Cabinet, that when British Ministers attend these summits in Brussels or wherever, they bat for Britain. They do everything that they possibly can to further Britain's interests. I am really disappointed that every speech from the Conservative Front Bench contains the criticism that we do not act in Britain's interests, because we do. That is what the right hon. Gentleman did when he was a Minister, and that is what our Ministers do when they perform their duties in Brussels.
This has been a good presidency, albeit a low-key one. I would like to have seen much more campaigning on European issues by our Foreign Secretary, because he has real style and panache and he is able to put forward the best of Europe to the British people. Inevitably, however, because of the great difficulties involved in organising a presidency over a six-month period, British Ministers have had to engage in the crucial decision-making processes.
We have had a huge success with Turkey, and it is worth reminding the House of the support that the Opposition have given to enlargement over the years. The Foreign Secretary generously paid tribute to John Major for the steps he took when he was Prime Minister. Certainly, the process was accelerated from 1997 onwards when our Prime Minister became a champion of enlargement. Through the previous Foreign Secretary, the late Robin Cook, and the present Foreign Secretary, Ministers have been fully engaged in the enlargement process. We all look forward to the day when Turkey joins the EU. It will be a different EU by then, but it will be one that truly embraces the whole of Europe. As we started the negotiations on Turkey, it was also important for us to give a green light to Croatia. The entry of the Balkans will also be crucial to the peace and stability of the European Union, and that process rightly started under our presidency.
Does the hon. Gentleman agree that it would be impossible to achieve the result that he would prefer, namely, a different kind of structure in Europe, while hanging on to the past and to the constitution? Are not serious changes needed to return power to the national Parliaments and, as I would prefer, to go down the route of associate status, so that we could address the real question of how to accommodate the proper aspirations of the enlarged European Union and of Turkey?
I do not agree with the hon. Gentleman's conclusions, but I pay tribute to his analysis and the work that he does in this area. What he does with the European Reform Forum in taking evidence on these issues is extremely important, as the House should discuss European issues not just in the Chamber and European Scrutiny Committee but on an all-party basis. In that way, we will find a great deal about which we agree, as well as issues about which we disagree.
Turkey must be admitted as a full member because it seeks that kind of status. I do not agree that we should have a two-class Europe. That is why I supported the Government in the measures that they took to ensure that when the latest enlargement took place, on
I hope that we will get a decision on whether Romanian and Bulgarian workers will be allowed to come here on an equal basis with the rest of European Union citizens before the 2007 deadline, as it would be wrong to leave it until the last minute to be fuelled by hysteria in the tabloid press. I hope that we will get that decision soon, as it is important that we send out a signal to the rest of Europe that we are the champions of enlargement.
That leads on to what the Foreign Secretary has said about the rebate and the difficult negotiations that are going ahead, and I wish him and the Prime Minister well in those. I remember sitting round the table and trying to get agreement with other Ministers in an EU of 15. In an EU of 25, however, it must be extraordinarily difficult. I pay tribute to all our Ministers for the way in which they have engaged in discussions, especially with the new member states. The right hon. Member for Richmond, Yorks commented on the Prime Minister, Foreign Secretary and other Ministers not being seen in other parts of Europe over the past six months. That is because they have been dealing with crucial negotiations. In the past week alone, five Prime Ministers—perhaps more—and dozens of Ministers have come to London to have meetings to try to resolve the problem.
My hon. Friend talks about the difficulty of securing agreement between 15 and now 25 member states. Rather than trying to force through decisions that cause difficulties, would not it be easier if we had a much looser arrangement in which each member state had a higher degree of independence?
My hon. Friend keeps saying that, but of course those states have independence. That is why we have discussions. We are not trying to force through these issues, and nobody tries to do so. Ministers do not turn up and try to dragoon people into supporting our view. There must be a process of painful negotiation and agreement, which is why it takes so long. That is why the Foreign Secretary has honestly told the House—the House admires his plain speaking—that if there is no deal, there is no deal. The Government will do their best, however, to ensure that there is a deal.
It is right, of course, that discussion about the rebate needs to be set against reform of the common agricultural policy. We have sought to do that for the past eight years. When the Conservative party was in government—and when the right hon. Member for Richmond, Yorks was a Minister in John Major's Government—I did not see Conservative Ministers coming to the Dispatch Box and telling us about all the work that they were doing to try to reform the common agricultural policy. I did not hear about any campaign by the then Conservative Government to try to put right the iniquities that were present, and are still present, in our system. All we had was silence.
All that I know in respect of the CAP policy is that Ministers have been trying for the past eight years to do something about the iniquities of the CAP. The budget must be set in that context. We cannot have a fundamental reform of the EU budget unless we have a fundamental reform of the CAP. There is agreement on both sides of the House on that. That is why the Prime Minister and Foreign Secretary rightly said that we negotiate about our rebate in terms of a reform of the CAP.
The cost of enlargement is quite different. One cannot be in favour of enlargement and want a wider Europe and then not pay for the costs of a wider Europe. Of course, the 10 new member states are benefiting because of the millions of euros that will be spent on those countries. Why do they need to be spent? Because those countries need to be brought up to speed with the rest of Europe, and because it benefits our country to have countries with which we can trade—which are our partners and with which we can trade on an equal basis. That is why we are spending all that money on the issue.
My hon. Friend talks about our generosity to the new countries coming in from eastern Europe. The amount of money that they receive from the CAP is a tiny fraction of that received by the rich countries in western Europe. It is an absolute nonsense. If there was sincerity about the CAP, those new countries should have the same proportion of CAP spending as other richer nations. Then, of course, the whole thing would break down.
On that point, my hon. Friend is absolutely correct. That is the case that is being made—that there must be a reform of the CAP. It is unfair because it favours France. We should ask the Polish farmers—and the Polish Government when they were seeking to join the European Union—what they think about that. Of course they want a much fairer deal. Until they have that fairer deal, however, it is up to European Union countries, through structural and cohesion funds, to give them a deal that will enable them to do the kinds of things that we want them to do.
As I understand it, that is the basis of the deal currently on offer from the Foreign Secretary. The rebate is to be considered in the context of the common agricultural policy, but we need to find other ways in which we, as a rich nation, can contribute to the new members so that they do not lose out as a result of our rebate. We must therefore give them additional funds to make sure that they can reach the level that we promised them when they joined the European Union. That also means considering the way in which those funds are dispensed. We do not want to see public opinion in the new member states waning since they joined the European Union, which appears to be happening, because they look at the European Union and see an organisation that seems not to be willing to reform.
In the discussions that my right hon. Friend the Foreign Secretary has over the weekend, I hope that he will pursue the reform agenda, as the right hon. Member for Richmond, Yorks said he should be doing. I have raised that matter with the Foreign Secretary on a number of occasions. There is no prospect of the constitution being adopted at this moment—my right hon. Friend the Foreign Secretary has been given credit in that regard, but I know that he is too modest to accept such plaudits—but the fact remains that reform is needed of the structures and practices of the EU.
That was originally set out in the joint letter from the then Chancellor Schröder and our Prime Minister in February 2002. That reform agenda is essential if we are to make the European Union work efficiently, especially in respect of the Lisbon agenda. Of course, the Kok report was damaging, but that was the point of having a report five years after Lisbon—to see what had been achieved. Many benchmarks have not been met—we have done better than other countries, but it is essential that that reform agenda survives beyond our presidency and into the Austrian presidency, and into the discussions and negotiations that we will ensure happen after our presidency has finished.
The world will not end on
This has been a slightly unusual debate in a number of respects. First, Keith Vaz departed from the sanctity of the ballot and revealed that he had voted for the Foreign Secretary—no doubt he had no ulterior motive whatever in doing so. A habit also seems to have arisen, almost like the congressional record in the United States, of making reference to local institutions such as local newspapers. Not to be left out on this occasion, I should like it to be known that I more than value the contribution of the St Andrews Citizen to the great political debates of our time.
There has been a warm and genuine welcome—an affectionate welcome—for Mr. Hague, who demonstrated, in a trenchant speech, the considerable talents that he possesses and of which we hope to hear and see more in future debates. I have been trying to formulate in my mind how the change in personnel effected by his new leader could best be characterised in relation to him. I suppose the best way of putting it is to say that Mr. Cameron shot the fox and gave us the comeback kid.
I shall discuss the issue of the deal in some detail in due course, but let me first point out that at one stage the Foreign Secretary said that no deal was better than a bad deal. The phrase has a certain resonance on occasions such as this, but when we analyse it we must ask what would be the consequences of there being no deal. What would be the political consequences in the European Union, and what would be the consequences for the influence of the United Kingdom? Can we be confident that if the matter were, so to speak, kicked into the arms of the Austrian presidency, a better deal would emerge from those circumstances?
Those are all questions that cannot, I think, be answered in this debate. Although we now have, in the form of a ministerial statement, an up-to-date indication of the Government's position, all the issues will be on the table on Thursday and Friday, Saturday, Sunday and perhaps even Monday, and the truth is that they may well change in material respects. The verdict on the proposals will have to rest until the Government, on Monday or perhaps even Tuesday of next week, return to report on precisely what they have achieved.
To an extent, that makes our debate a little artificial, but it is undoubtedly important because, as the right hon. Member for Richmond, Yorks said, the European Union stands at a very important point in its history and its evolution. It is worth reminding ourselves—and the right hon. Gentleman made some reference to it—that in his speech to the European Parliament on
The Prime Minister said in his speech that he believed that the French and Dutch rejections of the constitution constituted
"not a crisis of political institutions, it is a crisis of political leadership. People in Europe are posing hard questions to us."
In that speech, he raised expectations. He raised expectations that the crisis would be met, and that the hard questions being posed by the people of Europe would at least be the subject of an attempt to answer. I am afraid that, despite the Foreign Secretary's brave face on matters, history will judge that—with the exception of the opening negotiations on the accession of Turkey and Croatia—there has been, unhappily, a lack of substantial achievement during the presidency.
Some will say that the Prime Minister has failed his own test: that the political leadership to which he pointed in that eloquent speech has not been on display, and that the hard questions being asked by the European public have not been answered. I suppose one could say that the Prime Minister has been caught between the promise of his own rhetoric on that occasion and the failure of achievement that many will consider to be a characteristic of this period of the United Kingdom's responsibility.
I am most grateful.
Is it not possible that the real reason why the Prime Minister is having so much difficulty and has failed is that, despite his best efforts to secure an open, competitive Europe, the others are not listening? They do not want to change the acquis, they want to stick to the constitution, and the Prime Minister has pretty well given up banging his head against a brick wall.
I think that the material phrase in that intervention was "despite his best efforts". If I were satisfied that we had seen the Prime Minister's best efforts in this regard, I might be more sympathetic to the hon. Gentleman's position, but I do not believe—although I realise that we are dealing here with value judgments—that over the past six months we have seen the best efforts to which he refers.
We must, of course, accept that the conditions for progress were far from encouraging. President Chirac and Chancellor Schröder have failed signally to support the reforms that are necessary to enable Europe to respond better to the challenges of globalisation. I have made the point before, but I do not hesitate to make it again.
The economic advance of China and of India should not be seen in a vacuum. Those countries will seek to exercise greater political influence based on that economic advance. One illustration is the extent to which China is now investing in its defence forces and adopting, to a degree, a more robust approach to Taiwan. India, meanwhile, is demonstrating an overwhelming conviction that it is entitled to—and should soon be admitted to—permanent membership of the United Nations Security Council.
It is possible, in a sense, to bury one's head in the sand in relation to the economic explosion that is taking place in those two countries, but it is certainly not possible to do so in relation to the political influence that they will seek to exert—a political influence that will definitely impinge on the interests of the United Kingdom and, of course, those of Europe.
Here is another Member to whom I am always happy to give way, in the sure and certain knowledge that I have some idea of where he is coming from.
All of us in the Chamber take certain positions, but I should like to think that mine is rational.
The right hon. and learned Gentleman suggested that there was a failure of leadership in Europe on issues of reform. Is it not a fact that the peoples of Europe are simply rejecting what their leaders are telling them? At the last German election, when the Christian Democrats tried to win an election on that basis, people returned to the Social Democrats in droves because they did not want liberalisation.
That is a measure of the fact that the case has not been properly put. I do not think that any of us should have any confidence in a notion that things will continue as they have in the past. I believe that so far we have failed signally to understand what the economic and political impact of the resurgent countries will be. The sooner we get abreast of that, and the sooner it is understood in the chancellories of Europe, the better things will be both domestically and for the European Union.
One problem is that the United Kingdom, and the presidency, have had difficulty in exercising influence. I concede that much to Mr. Cash. Nevertheless, I do not recall, over the past six months, any serious efforts to initiate high-level political dialogue on these political issues. In that respect, I agree with the right hon. Member for Richmond, Yorks. Part of the difficulty of initiating such dialogue is caused by the continuing legacy of the disagreement over Iraq. Whatever our view of the rightness or wrongness of the military action that was taken, that is the context and the background against which we may unfortunately have to continue to operate for some time.
Reference has already been made to the period of reflection that was supposed to follow the rejection by the French and the Dutch, in referendums, of the constitutional proposals. I do not think we need dwell on that document to any great extent, because I believe it is clear to those of us who supported it and to those of us who opposed it that it is moribund. What is likely to occur now is a period during which a European Union of 25 will be compelled to operate within the framework of the Single European Act and the treaties of Rome, Maastricht, Amsterdam and Nice. It is my firm belief that the constraints imposed by the differing sources of the acquis, and by the fact that finding out where powers do or do not rest requires an extraordinary amount of investigation, will prove sclerotic.
In a European Union of 25, it will swiftly be realised that arrangements that were appropriate for a Union of six, 12 or 15 are simply not sufficient. Through force of events, we will come, one way or another, to a point at which people will say, "We ought to try to produce one document that incorporates the essentials." That will provide a further opportunity, which I hope will be taken, to embrace the principle of subsidiarity, to ensure that proportionality lies at the very heart of what the European Union does and to produce the constitution for which many in this House argued: a constitution that reflects rather more simplicity than the—in the minds of many people—complicated proposals that eventually emerged from the convention.
I understand what the right hon. and learned Gentleman is suggesting, but there is an alternative approach that might be being considered, and which has already been adopted by the EU bureaucrats: to bring in parts of the constitution by the back door, by stealth, as they have always done.
There was some agreement in this House that parts of the proposed document could be introduced without the need for constitutional proposals. One example that I can refer to, and which was mentioned by virtually everyone who spoke in the six, seven or eight debates that we had on this issue—[Interruption.] The Foreign Secretary indicates by semaphore that there were six such debates. Virtually everyone who spoke in those debates was of the view that the proceedings of the Council of Ministers should be in public and that voting should take place in public—that there should be transparency to a degree not previously achieved. We could do those things now, and if such measures were in effect they might help to deal with the disillusionment of the people of Europe to which Kelvin Hopkins referred earlier. I may be proved wrong, but it is my belief that in due course, the pressure of trying to operate 25 countries—perhaps it will be 27 or even 30; who knows?—within the framework of the existing treaties will become such that the need to alter the constitutional position will become overwhelming.
"The . . . rebate will remain and we will not negotiate it away."—[Hansard, 8 June 2005; Vol. 434, c. 1234.]
Two weeks later, the Prime Minister said that, after his talks with the Swedish Prime Minister, he was in fact prepared to negotiate on the rebate. It has been our consistent view, in supporting the Government, that the rebate should be renegotiated only in return for wider changes to the European Union budget, and in that regard I agree with the principle that Great Britain should be willing to make a contribution to the cost of enlargement.
The hon. Member for Leicester, East made a point earlier about public opinion in the countries of the 10. One need not go very far in those countries to find an approach to, and support for, Europe that is a long way short of the euphoria that was characteristic only 18 months to two years ago. We should remember that the purpose of the European Union is not just to provide a market and economic opportunity, but to ensure political stability. So it cannot be in the long-term interest of the European Union as a whole that disaffection with the EU should arise in those countries because of a failure to meet obligations, and because of a feeling that expectations have not been properly met.
Part of the Government's difficulty is that they failed to set out what the changes to the budget ought to be. There are two particular changes for which we would argue. First—here, the right hon. Member for Richmond, Yorks and I are again in agreement—there should be a significant improvement in the EU's position on tariff cuts during the World Trade Organisation negotiations. Given what the Commissioner said this morning, it seems that it is too late to achieve that in Hong Kong: he has gone there with a certain mandate or remit, beyond which he cannot go. But Hong Kong will not be the end of the matter. If we are concerned about the fate of the poorest countries in the world—as we rightly should be, as many of our constituents are and as the G8 summit appeared to be—making more concessions on agriculture is absolutely essential. Perhaps most important of all, we need to tackle the practice of dumping, which undercuts indigenous agriculture and puts farmers in the countries in which dumping takes place in an impossible position. It is hardly surprising that there is such indignation in those countries, where agriculture is often at subsistence levels or just above.
I turn to the second change for which we would argue. It is surely time to consider restructuring common agricultural policy funding through co-financing. European Union support would be substantially reduced and member states would be permitted, under conditions, to supplement it if they so choose. That would give more responsibility and influence to domestic Parliaments. In turn, it would benefit EU consumers, help to make more progress toward the creation of a free market in Europe, and be of considerable benefit to economies in the developing world. There has been a sad lack of detailed reform of the Government's position on this issue.
Everyone agrees on the need to reform the CAP, which has been described as an anomaly. I cannot remember a single Member making a speech in favour of it, but in talking to representatives of the National Farmers Union in my constituency, it is clear that many of our farmers regard the CAP as being of significance. [Interruption.] Given the nodding of heads in the Chamber, I suspect that my experience is common to others. Those farmers are waiting with some anxiety to see how the single farm payment system, introduced some 12 months ago, will operate in real-life, practical terms. But I have no doubt that the CAP does require reform.
Yes, that may well be so, and that is an argument for financing.
The difficulty with the Government's approach to CAP reform is that no detailed proposals were put forward. CAP reform was mentioned only twice in the White Paper on the presidency: once in the context of reform of the sugar regime, which had already been proposed by the Commission, and once in the glossary.
In a moment.
If we were serious about CAP reform, we surely had an obligation to put on the table the precise way in which we would seek to bring about such reform. We can hardly be surprised at a lack of enthusiasm for reform if we fail to provide the detail necessary for people to make an informed judgment.
I am very grateful to the right hon. and learned Gentleman for giving way. I have sat here listening to his complaints about our alleged lack of vision for agriculture, as echoed by Mr. Hague, with some surprise. We have produced a series of papers on CAP reform and we have followed that policy in practice, as illustrated by the big reduction that my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs achieved the other day in respect of sugar. Just two weeks ago, we brought together this approach in a 70-page document entitled "A Vision for Common Agricultural Policy", which was published jointly by my right hon. Friends the Chancellor of the Exchequer and the Secretary of State for Environment, Food and Rural Affairs and put before this House. I am very surprised that the right hon. and learned Gentleman and his staff, who are normally well-informed, failed to spot this.
I spotted it, but four weeks away from the end of the presidency, one has to ask precisely what kind of impact it will have. The whole House has been united on this issue for a long time. Surely, if we were serious about securing this necessary reform, we would have been in the market—no pun intended—with proposals long before four weeks before the expiry of our responsibilities.
It is actually even worse than the right hon. and learned Gentleman and my right hon. Friend Mr. Hague have said, because the document to which the Foreign Secretary refers—"A Vision for the Common Agricultural Policy", which was published two weeks ago—states:
"The vision in this paper focuses on where we need to be in 10 to 15 years time, and why. It does not set out a route map for getting there."
Even at this stage, the Government have no concrete proposal and no idea how to achieve the objective.
Perhaps the Government need one of the devices that can be fitted to the motor car: if one plumbs in the proper information, it will provide a direct road-by-road demonstration of how to get from here to there. We can all agree, I think, that CAP reform is vital and that much more needs to be done.
In that context, we should note that, in 2003, the Government endorsed the financing arrangements for the CAP, which would remain unchanged until 2013. I have some sympathy for the Prime Minister because on that occasion he was bounced. By the time he arrived at the summit, Messrs. Schroeder and Chirac had arrived at an accommodation, shall we say, that they were determined to press through.
Doha has already been mentioned by myself a few moments ago and by the right hon. Member for Richmond, Yorks. In the White Paper, "The UK Presidency of the European Union", let me remind the House of what the Government said under the heading, "Prospects for the EU in 2005":
"The UK will play a key role in moving the Doha trade round negotiations forward . . . to ensure a successful outcome at Hong Kong . . . which helps to deliver a freer and fairer global trading system."
The Foreign Office website established for the purpose of the presidency claims that one of the priorities is to
"demonstrate clear progress in breaking down barriers to trade".
Even on the most generous analysis of the Government's position, those objectives will clearly not have been achieved within this presidency.
We had some amusement at the expense of the Conservative party a little earlier. Looking around, I suspect that not all of us remember Sir Robert Atkins. Let us describe him as a former hon. Member with direct and robust views and a man of considerable political acuity. It is remarkable how reputations can improve as soon as one has left and gone elsewhere. I cannot do other than refer again to the quotation attributed to Sir Robert:
"We would find ourselves in the company of The League of Polish Families (racist and Europhobic), the Danish People's Party (Iain Duncan Smith banned us from even talking to them!)"— they must have been pretty Eurosceptic for the then leader of the Conservative party to have thought that his colleagues should not talk to them—
Struan Stevenson, a Scottish Conservative MEP, said:
"We would have to sit round the table on a weekly basis with these fascists and nutters that nobody else will sit with".
I wish to develop the theme. I am sure that Struan Stevenson would be happy to sit around the same table as the hon. Member for Stone. It suggests to me that the first task of the right hon. Member for Richmond, Yorks—to persuade these men of foresight and common sense to change their view—will prove formidable. We look forward to hearing reports on his success in that respect. Then our old friend, Mr. Clarke—unhappily, he is not in his place on this occasion—used words such as "headbanging", which suggests that his appetite for Europe has not been diminished by his relative failure in the leadership contest for his party.
I think that the right hon. and learned Gentleman and others—I heard one of his colleagues on the "Today" programme this morning—are misunderstanding the arguments that are emerging, albeit slowly, about the future shape of Europe and the need for serious reforms in the interest of individual member states and perhaps of Europe as a whole. I believe that there will be a change in the words used to characterise people such as myself who have taken a view—that we should reject the idea of an all-embracing European constitution and reject centralisation—that was previously described as "nutty". That viewpoint is now gaining much greater purchase, and there will be further changes in other member states.
Let me say straight away that I do not regard, and never have regarded, the hon. Gentleman as nutty. He takes a particular view of Europe that I do not share, but I admire the fact that he has not departed from that view and that he takes every opportunity to advance it. Also, he never joined UKIP, which, if I may say so, is a clear indication that he does not fall under the category of nuttiness or anything similar. It is clear, however, that those who represent his party's interests in the European Parliament are going to need an awful lot of persuading that they should not associate with the conservatives of the EU countries. If I may say so, I was impressed by what the Foreign Secretary had to say about the national interest, as reflected in an article written by my hon. Friend Chris Huhne in one of this morning's broadsheet newspapers.
Let me finish on the bright spot of Turkey and Croatia, which I believe represent a substantial achievement on the Government's part. There will be difficulties and the Turkish Government and people must understand that, however strong the advocacy of the US on their behalf, the Copenhagen criteria must be met. They must be met, furthermore, not just in letter or form, but in substance. The EU cannot and should not reduce its standards, however politically desirable it may be to bring in the first Muslim country. There can be no doubt, however, that what has happened is a substantial achievement by the Government, so the Foreign Secretary and the Minister for Europe most certainly deserve recognition.
I also want to mention briefly the more open attitude towards the Balkan states. Let us remind ourselves that when the former Yugoslavia broke up, the constituent parts were necessarily outside the European Union. They were outside of it because of political and historical events. The former Yugoslavia imploded with all the devastation—including Srebrenica, where perhaps 200,000 people were killed—that came with it. I venture to suggest that had those countries been members of the EU, much of that terrible bloodshed would not have taken place. Slowly and painfully, not always immediately successfully, these constituent parts of the former Yugoslavia are coming to a better understanding and realisation of democratic institutions and tolerance. Unfortunately, tolerance is not always evident: 18 months ago, Kosovo provided a glaring and unpleasant example.
As long as these countries have the prospect of becoming members of the European Union, it seems to me that they have a much better chance of achieving the levels of stability, conformity with the rule of law and democratic institutions that are necessary. The stimulus and inducement of EU membership is extremely significant. We talk about the details of the budget that are so important to us because we are members. They have an impact on our financial circumstances and our economic opportunities. However, we should remember that a much larger prize, in many ways, remains to be achieved—the continuing enlargement of the EU in order to provide a bulwark for democracy in a part of the world that went to war three times in 100 years.
The forthcoming EU summit is clearly in our minds, but the purpose of politics is not just to deal with the here and now; it is also to think and plan strategically about the welfare of our country and of future generations—our children and grandchildren. We need to face up to the fact that the EU's long-term economic prospects are poor.
Compared with the US, China or India, our competitiveness is falling quite sharply. We have the problems of an ageing and shrinking population and underfunded pension systems. The European Commission estimates that, by the middle of this century, the UK's share of world gross domestic product will have halved. Goldman Sachs has said that the EU's relative decline will be even greater, and that our share of global GDP will fall by something like two thirds.
Therefore, if we want to survive as a major player in world markets and retain a strategic role in global affairs—in respect of climate change, peace and security and combating terrorism, for instance—we need to set in train urgent and radical reform of our national economies. We need to invest more, especially in science and technology, to increase our productivity and competitiveness, and to create new products, and especially new services, to sell in world markets. We need to save more, especially to fund an ageing population in retirement. We need to continue to reduce the costs of doing business, and to pursue energetic welfare-to-work policies.
The UK has taken a lead in Europe on all those policies. That is why our economy is performing better than other EU economies. It is why our growth rate has been higher in recent years, and why our unemployment rate is significantly lower.
In a rapidly globalising world, few problems can be solved by one country acting alone. The economic challenges that I have described cannot be solved within the boundaries of our country. Sir Menzies Campbell spoke eloquently about the need for trade reform, and there are other problems that can be addressed only in partnership with other countries, including the quest for environmental sustainability, international migration, immigration and asylum, organised crime, the international drugs trade and terrorism.
We therefore need to co-operate internationally, not least with the other EU states. On this morning's "Today" programme, I heard a Conservative MEP bemoan the fact that the EU has the competence to negotiate on the UK's behalf in the World Trade Organisation, and that it is Peter Mandelson rather than the Secretary of State for Trade and Industry who represents the UK's interests. The MEP made the case that UK trade policies are more progressive and would be more likely to achieve agreement in the WTO than the compromise position proposed by Commissioner Mandelson. That is to ignore the fact that the WTO works on the basis of unanimity, and that if one country in the EU can veto CAP reform and the reduction of agricultural subsidies, so can one country in the WTO.
I believe that the CAP is the stumbling block when it comes to making substantial progress in the development dimension of the current WTO round, and that it must be changed. Separating our trade representation from Europe would not help us to reform the common agricultural policy, as that must be done within Europe. All of that means that backing away from Europe is not the solution. We need the EU to deal with the global problems that I have set out, but we need a reformed, modernised and more effective EU that is fit for the 21st century.
First of all, we should begin by reforming the EU budget. I believe that the Government are right to press for a reduction in overall EU spending. We need to rein in state spending to improve our economic competitiveness in respect of emerging economies such as China, India and Brazil, and in relation to the US.
Secondly, the Government are right to agree to pay towards the costs of structural reform in the 10 new EU member states. Those reforms will make those states richer, and us richer too. That is what has happened with every EU enlargement to date. The resources that the EU put into Greece, Spain and Portugal made those countries and all other member states richer, because we trade with one another and our economies are interdependent.
However, I do not believe that my right hon. Friend the Prime Minister's proposal to reduce the overall budget slightly will impede aid needed for the new EU member states. The Financial Times reported today that, in the first two years since its accession, Poland has been allocated €8.6 billion in structural funds but that to date it has spent only 4.3 per cent. of that amount and has committed only about 50 per cent. of it. The newspaper also said that, so far, the Czech Republic has spent only 2.6 per cent. of the €1.7 billion that it has been allocated. The accession countries will therefore get the money that they need to carry out the necessary structural reforms even under the slightly reduced overall budget that the UK proposes.
Thirdly, the UK is right to propose changing the EU rebate, because circumstances have changed. All 10 new member states have much lower average incomes than the UK, and eight have emerged from the shadow of communism. I have many disagreements with Margaret Thatcher, but she was nevertheless a tough and determined opponent of communism. She wanted to free states from the dictatorship under which they existed. That was because she believed in freedom, not because she wanted them to pay a rebate to the UK Treasury. She was not fighting to ensure that Estonia, Latvia, Poland and the Czech Republic would subsidise the UK.
In his youth, Mr. Hague was a passionate admirer and supporter of Margaret Thatcher, so I am sorry that he should seem to fudge on the question of whether the accession states should make a contribution to the UK rebate. Our Government are right to say that that burden should not fall on them.
Another way in which circumstances have changed since 1984, when the rebate was agreed by EU member states, is that the UK is much more prosperous now. In 1984, unemployment stood at 3,298,000, or 12.1 per cent. of the work force. On the same measure, it has now fallen to 4.9 per cent. The UK average income, or GDP per capita, was £5,750 in 1984, but now it is £19,537. Even adjusting for inflation, that represents a real-terms increase of 62 per cent.
I looked this morning at the report in the Financial Times of the 1984 EU summit when the rebate was agreed. It said:
"the one-nation deal for the UK is based on an explicit acknowledgement that it is a relatively poor member state".
In relative terms, the UK was poor then, but it is not now. Average incomes here are higher than in Germany, France, Italy or Belgium.
Fourthly, the Government are right to say that we will not abandon the rebate without reform of the CAP. The CAP is bad for families: according to a recent parliamentary answer, the average family of four would save £5 a week on food if the CAP were scrapped. The CAP is also bad for taxpayers: to that average family of four, the cost of CAP subsidies amounts to a further £3 or £4 a week. That means that the CAP leaves the average family worse off by nearly £10 a week. The CAP is also bad for the EU because it is a totally perverse misuse of its overall resources: 40 per cent. of EU spending goes on the CAP, whereas 5 per cent. of the EU's population works in agriculture and produces only 2 per cent. of the EU's output.
CAP reform is necessary to remove a roadblock in the way of progress in the WTO negotiations. It is necessary for global trade justice, and it is a precondition for the economic reform that the EU needs to make to secure our own future prosperity. Oxford Economic Forecasting calculates that the EU's GDP could be boosted by €200 billion a year, which would create hundreds of thousands of new jobs in the EU, if CAP subsidies were ended and EU tariffs were cut.
It is necessary not just to reform the CAP; perhaps the Minister can also ensure that the UK team takes to the summit the need to reduce tariffs. We have tariffs of more than 100 per cent. on many foodstuffs: 170 per cent. on lamb, 120 or 130 per cent. on beef and 100 per cent. on rice. It is utterly absurd to impose that burden on consumers in the EU, particularly on those in this country, which is such a large net food importer. We in the UK alone would benefit by £20 billion a year—about £1,500 per family of four—if that economic liberalisation, the abandonment of the CAP and a reduction in tariffs were made. Developing countries would gain at least twice as much as a proportionate of their national income as we would in the EU.
The report to which the hon. Gentleman refers and the benefits for the average family in the UK are absolutely right, but the people who would gain most proportionately would be those in the poorest 10 per cent. of society. Trade liberalisation would benefit the poorest the most.
Yes, that is true globally, and it is certainly true in this country. If I remember rightly, the figures in the report suggested that the poorest 10 per cent. of families would see an increase in their average income of about 3.5 per cent., whereas the richest 10 per cent. would see an increase in their income of about 0.5 per cent. If we were to make those changes, it would be good for social justice in Britain, and it would be good for global social justice, too.
The real importance of a rebate is not the reduction that it makes in the UK's net contribution to the EU, but the incentive that it provides to reform the CAP. To return to the Financial Times report of the Fontainebleau summit in June 1984, when the rebate was agreed, it said:
"The real impact of a budgetary deal will be critically dependent on parallel steps to impose tighter control over Community spending, and to reduce the share going on agriculture. If the Community can, over time, substantially reduce the farm burden, Britain's gross budgetary transfer should also decline."
The way for the EU to get rid of a rebate is to get rid of the cause of the rebate.
I share the hon. Gentleman's passion for CAP reform—he and I both served on the International Development Committee for a number of years—and he has made an eloquent case for reducing the tariff barriers, but does he share the concern of those who suggest that the subsidies could be paid by national Governments rather than by the EU? Would that not just simply compound the problem? We are trying to get rid of a subsidy regime. To transfer it to national Governments would be self-defeating.
The hon. Gentleman has moved on to greater things, but as a continuing member of the International Development Committee I went to Brussels to meet the Commission last week. We met the Agriculture Commissioner, and I can tell the hon. Gentleman that the idea of converting the agriculture subsidies into a call on national Government spending, rather than the EU budget, gets no support whatsoever from the Commission. Whatever the merits or otherwise of such a change, it is not one that will happen under this Commission presidency.
I do not know what the outcome on the budget will be at this week's summit—it may end in deadlock because of a French "non" to change in the CAP—but I have little doubt that the final budget package, when agreed, will be close to the UK's proposal. I expect that it will contain substantial support for the 10 new member states. It will include a slight reduction in the overall budget and an agreement to review the CAP earlier than the current deadline of 2013. So I say to the Government, "Stick to your guns." The EU needs to reform not only its spending, especially on the CAP, but its contribution system. Although I do not expect progress to be made on the latter this weekend, tax systems generally are seen to be fairer—they are certainly better understood and more transparent—if they are simpler.
At the moment, there is an overlapping matrix of four main income streams for the EU. We should move to a much simpler system, whereby all the income derives from the source that a majority of it comes from now: a simple proportion of gross national income. Then people in this country would feel that they were being treated fairly, alongside those in Germany, France, the Czech Republic or Latvia. That would not make a huge difference to the overall budget, but it would become much more understandable. I have asked the Library to generate some figures on such a system. It would produce some marginal benefits for the UK, but it would produce a system that would be much fairer overall and seen to be so by people throughout the EU.
I am pleased that Hugh Bayley introduced the subject of the European economy and financial and economic performance into the debate, although I draw the opposite conclusion. I believe that economic success goes to self-governing countries that possess their own fiscal, monetary and trade policies. There are dangers in membership of a large bloc if that large organisation pursues anti-competitive practices. Unfortunately, the EU is largely discredited as an economic model for the world to emulate. We are paying a heavy price for that already.
The Chancellor of the Exchequer occasionally expresses admiration for the United States economy and enterprise, but he, the Treasury and the Government are converging not on the US model but on a European model that is characterised by high unemployment, high taxation and a high regulatory burden. That should form the basis of the discussion at the forthcoming summit that will take place at the end of this week, instead of which we have got bogged down in a series of quarrels and it is difficult to expect that anything positive will come out of it.
A positive development in the debate has been the return to front-line politics of my right hon. Friend Mr. Hague. That was certainly a benefit of the recent leadership election. I wish him well in his endeavours. I contrast his contribution with those of not just the Foreign Secretary, but all Government Members, who have talked endlessly about reform that is not happening.
In fact, it is striking that almost no hon. Member even tries to stand up for the EU as it is; they talk instead of the possibility of reform, but we have had the reform process. I was part of it—it was called the European Convention—and the organisation that met for nearly two years in Brussels, chaired by ex-President Giscard d'Estaing of France, was given a very wide remit indeed. Instead of tackling reform, the Convention wrote a constitution that gave more power to the very European institutions that had created the problem in the first place. The public's sense of alienation and disillusionment has got worse since 2001 when the Convention came into being. There was no sign in the Foreign Secretary's contribution this afternoon that he had grasped the scale of the reform that is needed.
The right hon. Gentleman will be aware that there have been reforms, although obviously not on the scale that we would like. For example, the CAP has been reduced from 66 to 40 per cent. of the budget over 10 years, and between £3.5 billion and £4 billion has been knocked off the CAP due to recent reforms to the sugar regime during our presidency. He does not give credit where it is due.
Those are trivial and peripheral changes. I am talking about the need for deep-seated structural reform of the European Union, as signalled in the Laeken declaration of December 2001, when it was asserted that Europe stood at a crossroads. It was said that Europe was behaving too bureaucratically and referred to the gap between the leaders of Europe and the led. It called for more democracy and simplification. None of that was done.
The Government tabled about 200 amendments, only a handful of which were accepted. They almost immediately gave up on the concept of the constitution. Originally, the Prime Minister said that he did not want a constitution, but he retreated from that when it became inevitable. He gave up, too, on his promise not to make legally binding the EU charter of fundamental rights. Then he actually signed the constitution. He cannot have believed in large chunks of it, because we return occasionally to the Government's unsuccessful amendments, but we now know that the constitution was turned down not by the politicians of Europe but by the people. The Government failed to take advantage of that reform process. The entire process was a failure, so it is not good enough to say, in the dying days of the British presidency, that the Government stand for reform.
The same process—talking tough in advance and then giving way—is apparent in the question of the budget. The Prime Minister gave explicit and unambiguous assurances at the Dispatch Box that were simply forgotten. I shall not repeat the process eloquently outlined by my right hon. Friend the Member for Richmond, Yorks, who showed how the Government started by saying that the rebate was justified and would not be given up in any circumstances. Then they said it would be given up in return for CAP reform and then in return for talk of CAP reform. Now they say that it will be given up with no CAP reform.
The present budget is indefensible and, as long as that situation endures, we must not give up our only real lever for reform—the British rebate. This year, this country is giving more than £4 billion net to a European budget whose accounting system is pre-15th century. The former chief accountant of the EU, Marta Andreasen, discovered that the Commission did not even use double-entry bookkeeping, which was invented in Venice in the 15th century, as I know because I am a chartered accountant. It was a European invention, but it has not yet reached Brussels. Into that unreconstructed, unreformed accounting system, where the auditors have refused to sign off the books for the past 11 years, we pay a net amount of more than £4 billion.
During the debate, it has been said that the poorer countries of the east need that money. In fact, they joined under the present system not to obtain handouts but to exert a comparative advantage in a free market, as well as for the supposed political and security advantages. They did not join for an endless stream of cash transfers. They are not by any means the poorest countries of the world, but if there is a case for helping the poorer countries of the east and one accepts that obligation, it would be far better not to meet it by filtering money through the most inefficient and corrupt accounting system in the western world.
The same is true about our structural funding and the CAP. Indeed, several Members have said that we need the structural funds. We represent different parts of the UK, some of which are in receipt of structural funds, but for every £2 we pay into the EU budget, we only receive back just over £1. That is a bad bargain. If we really want to look after our farmers and those in receipt of structural funds, it would be much easier, and certainly more efficient and better for the taxpayer, if we repatriated that money. Indeed, the Chancellor of the Exchequer advanced the proposition that we should repatriate structural funding.
I thank the right hon. Gentleman for giving way, not least because I was not in the Chamber for the last couple of speeches, for which I apologise.
The right hon. Gentleman thinks that the CAP should be repatriated, so does he believe that every country in Europe should be free to do whatever it wants in terms of agricultural subsidies? Would not that be counter-productive for developing fair trade for poorer nations?
I shall return to fair trade at the end of my remarks. Meanwhile, I merely observe that there could be a common policy, but the funding could be repatriated. People in this country do not resent paying money to British farmers. I represent an agricultural constituency and I should also declare an interest in that I have a partnership farm, so I receive some CAP funding. The resentment is not that we pay for our own farmers but that we pay for everybody else's in Europe.
I apologise to the right hon. Gentleman for not being in the Chamber for the beginning his speech. Like other members of the European Scrutiny Committee, we were unable to be here for the start of this important debate.
Does the right hon. Gentleman agree that it is time to look at repatriation of the common fisheries policy? Could he clarify the position of the Conservative party under its new leader? Does the CFP remain Conservative policy and will the Conservatives apologise for signing us up to it in the first place?
One of the minor scandals of the European constitution is that it entrenched and formalised a common fisheries policy that is bad not just for fishermen but for fish. Occasionally, I visit Iceland where I have seen the advantages to all concerned of the concept of stewardship. Those who own and control their own waters tend to look after their fishery resources, but when there is a common policy everybody tries to get what they want. That is intensely bureaucratic, bad for the environment and bad for the livelihoods of our fishermen. Enormous changes are required, but all the changes that have been made were in the wrong direction. In the constitution, the Government tried to give whole CFP away.
I want to advance a wider truth and put a wider question. Why is the cornerstone of our foreign policy—the EU—such a nightmare to deal with for all Governments? When the Government go to the next European summit, all they can hope for is to avoid damage. They never go to summits with the hope of changing the world for the better; it is all about fighting a desperate battle to preserve what remains of our self-government, to stop too many advances on our criminal justice, foreign policy and defence. We are fighting a losing battle.
As my right hon. Friend the Member for Richmond, Yorks said, the European constitution is already being implemented by the back door, by manipulating the existing treaty base in collusion with the European Court of Justice. He gave an example of how a recent court case will allow criminal justice matters to be spread right across member states, even if those member states' Governments disagree. The situation is in fact worse than that. The court case signals the fact that future environmental and other directives will require criminal penalties. Even if the directives are agreed by majority voting, as they will be, member states that vote against them will have those criminal penalties imposed in their domestic jurisdictions. There can be no clearer example of the way in which the House of Commons or another national Parliament will lose control of the most precious, basic and central power: imprisoning or fining citizens and electors.
It was explicit in the European constitution that the power was to be given away. The constitution was turned down by referendums in other member states, but exactly the same measure is being introduced by the back door by manipulating the existing treaty base. That matter should be on the agenda of the summit at the end of the week. We should defend British interests against the encroachment of an expansive jurisdiction. It tells us something about the entire process of the European Union that the best for which Ministers can hope is to avoid further damage.
With member states freed from the temporary and perhaps artificial unity of trying to create a European constitution, the real and deep-rooted differences in the European Union are becoming clearer. We have debated the budget this afternoon and I want to mention trade. We have had a year of making poverty history. The cause has mobilised enormous numbers of our constituents, who know that among the best things that we can do for the poorest countries of the world is to help them to get a bigger share of world trade. In fact, small increases in trade share do more good than a lot more aid.
The paradox is that this country does not have a trade policy—we have given it away. Of the eight Ministers in the Department of Trade and Industry, only one deals with trade, and he is shared with the Foreign Office. There is half a ministerial job in the DTI dealing with trade. We have simply disarmed. We have no expertise on trade. We have sub-contracted the whole thing to the European Commission and our ex-colleague, Peter Mandelson, who is not really a negotiator, but more an impresario who is trying to synthesise an agreed position between the French protectionist ideology and what is loosely called the Anglo-Saxon, or liberal trading, position of the United Kingdom. He is failing to reconcile our interests with those of the French, but the victims are the poor: the poor in our country who could do so much better if we could import things more cheaply and consumer prices could be brought down thereby and, most importantly, the poor and the poorest in the developing world.
Think what we could do if we were in charge of our own trade policy. We could import immediately goods and products that the developing world produces. There would not be competition with our farmers because we do not grow bananas and oranges in this country. We could import the goods from poor countries free from tariffs and protection, which would be to their advantage and ours. However, that is illegal. It is against treaty law because the European Union, to use its jargon, has an exclusive competence over trade policy. It is not only our interests that are being betrayed, but the interests of the poorest people in the world.
The right hon. Gentleman speaks eloquently about the virtue of trade liberalisation as a way to help developing countries. Indeed, his party leader touched on the same theme earlier today. Will the right hon. Gentleman explain then why, when a French Trade Commissioner, who was the predecessor to the present Trade Commissioner, unveiled perhaps the most ambitious proposal on trade liberalisation for the benefit of developing countries—the "Everything but Arms" initiative, which was designed to allow total duty-free trade of products from the 46 poorest countries in the world—Conservative Members of the European Parliament resisted the measure on the ground that they wished to protect sugar farmers in this country? Rhetoric is easy, but when will the Conservative party put that rhetoric into practice?
I do not accept that. The Conservative party has a long and honourable record of fighting for free trade, as, I concede, did the old Liberal party. My family were all members of the Liberal party up to the second world war, partly because we were free traders. We were in manufacturing and we took on the landowners and feudal interests in these days. We fought to do away with the corn laws, and, indeed, we were helped by the ancestors of my hon. Friend Mr. Cash. We fought together on the matter, so it is sad that the old Liberal party is unrecognisably represented in the Liberal Democrats of today. I do not accept the strictures of Mr. Clegg. I have always believed that free trade benefits the poor, especially. It is a scandal and a shame that we have no means—political or legal—to exert such influence in the wider world because we have given up powers to another jurisdiction.
Does the right hon. Gentleman seriously think that we would be more likely to get a deal in the World Trade Organisation if each EU member state were represented by its own Trade Minister? By pooling the policy, France has to give a bit. For example, it had to make the concession of agreeing to the phasing out of export subsidies, but that would not have happened if France had been acting alone. The world trade negotiations would have been even more deadlocked than they are now.
We have heard about the ambition of reforming the CAP for decades. The European Union is incapable of reform—I know, because I tried to achieve it. National Governments can change, and a change of Government leads to a change in policy. No changes are possible in the European Union because it is a bureaucracy that is immune to reform. The CAP is the vestige, albeit an important one, of that immunity to reform.
I end my speech by making an observation about Britain's place in the world. The Government have not addressed the question of where we stand in the world. It is true that we are in part a European continental country and we play our role as such. However, General de Gaulle said more than 40 years ago that Britain is an insular, maritime country with instincts and traditions that differ profoundly from those of the continentals. That is a profound truth. Our global links, language, pattern of trade and legal system mean that we are not just a continental country. We have links with what de Gaulle called the maritime parts of the world, although I think that they would now be called global links. Technology, the unassailable position of the English language and what has been called the death of distance have strengthened those global links and the global pull in many ways. However, the European Union—especially through the euro in the financial field and the European constitution in the political field—was and is an attempt to park us permanently in a continental situation. That defies our national character, along with our traditions, history and instincts. I believe that that is understood on the Opposition Benches. There is no inkling that the Foreign Secretary or the Government have even addressed these issues. These are the matters that they should be discussing in the coming days. They will be discussed by the Conservative party on its return to office.
It is unfortunate that the Government's revised proposals for the financial perspective 2007–13 were not available yesterday. My right hon. Friend the Foreign Secretary came before the Foreign Affairs Select Committee yesterday afternoon, but regrettably we did not have an opportunity to go through the revised proposals in detail. I have now been able to read them—
No, not yet. I will give way later. Please let me make some progress.
I have read the proposals in some detail. I am interested that the position to which the Government have come does not substantially change in the main area that I want to talk about, and that is that we now have 14 EU missions under the common foreign and security policy. That is seven more missions than when Britain began its EU presidency. There is a requirement—there is a proposal within the initial Commission proposal and within the Government's proposal—for a significant increase in funding for common foreign and security policy missions within the EU. My concern is that if we do not get an agreement in the next few days, there will be big question marks about the sustainability and long-term role of many of the important EU developments and activities throughout the world.
The hon. Gentleman knows my particular interest in the south Caucasus. To raise the issue of joined-up Government, does he feel that it is regrettable that the Government have cut their funding of conciliation resources for that part of the world, the south Caucasus, before the EU takes up the reins as part of the European near neighbourhood policy? Does he agree that that is a profound lack of joined-up Government in what is an important agenda on improving human rights and democracy in the south Caucasus and elsewhere?
I will come on to regions of conflict—I think that there was an Adjournment debate on the issue in Westminster Hall, although I do not recollect everything that was said. Perhaps hon. Members will read the report of the debate in coming days.
The 14 missions to which I refer include a military operation in Bosnia and Herzegovina and a police mission there; a police mission in the former Yugoslav Republic in Macedonia; a police mission in Kinshasha in the Democratic Republic of Congo; the so-called rule of law mission for Iraq, which is involved in some of the training and activities that are taking place outside Iraq but in relation to Iraq; the mission in the Congo, which is a security mission and in addition to the police mission that I have mentioned; the mission for support for the Africa Union in Darfur; the Aceh monitoring mission in Indonesia, which has been playing an important role; and a police mission to Palestine—which I, with other members of the Select Committee visited two weeks ago when we were at the Rafah crossing. We saw the carabinieri who are in charge of that mission, together with Romanian and Danish police officers, doing a fantastic and vital job in opening up Gaza for trade with Egypt, and potentially leading to the beginnings of viability for a Palestinian state. The members of the Select Committee were very impressed by the work that the EU is doing there.
There is also the border control assistance mission in Moldova. It is important because in, perhaps, two years Romania and Moldova will be the border of the EU. We know that Moldova is a conduit for people smuggling and other crimes, including drug smuggling. We have a European-wide security interest in the success of such missions.
Many bad things have been said about the EU; many criticisms have been made. I want to be more positive, because in all the difficult areas that I mentioned the EU has been playing a positive role in conflict resolution, conflict prevention and reconstruction. Why is the EU at Rafah? The answer is that the Americans did not wish to do the job. There needed to be a consistent long-term commitment. The EU now has the beginnings of the ability to act in the interests of peace and security throughout the world as a whole, without worrying only about subsidies to agriculture or contributions to the budget.
Having listened to the remarks of Mr. Hague, one would think that everything about the EU is terrible— that it is declining and failing. Why, therefore, have 10 countries recently chosen to join the enlarged EU? Why do Bulgaria, Romania, Croatia and Turkey wish to join? Why do countries in north Africa and around the Mediterranean seek association agreements? Some countries want to join the EU even though they are not in Europe. Why do people in Ukraine and other countries regard the EU as the way forward on democracy, human rights, economic development and pluralism? The EU is magnet and a beacon for many other countries.
Although people with mid-Atlantic views think otherwise, the EU is important to Britain's foreign policy. Through our work in the EU we can play a vital role in developing policy and gaining international support and allies, just as we do through the Commonwealth and our membership of the UN Security Council. It is not a choice between being an Atlanticist or being a European—it has always been in Britain's best interests to have good relations on both sides, as Sir Winston Churchill recognised when he was Prime Minister and subsequently.
The hon. Gentleman has made some powerful points, but when he spoke about countries that want to join the EU, he was in fact talking about the Governments of those countries. There were no referendums in Bulgaria and Romania to find out what the people thought, but opinion polls showed that they were against membership.
We must wait to see what happens with Bulgaria and Romania as they have not yet joined the EU. In central and eastern European countries that held referendums before they joined, there was overwhelming support for membership. In countries throughout central and eastern Europe, apart from some extreme left and right wingers, there is a vast consensus in favour of EU membership. People may not agree with every aspect of policy—some of them, particularly in Polish agriculture, have received a sudden wake-up call about the need to change and reform agricultural policy. Nevertheless, the younger generation and people who look to the future rather than live in the past accept that the EU is a magnet for those countries and is the way forward. Having said that we wanted to end the cold war divisions of our continent, and as we believe that we should work together and co-operate as a single Europe, we would do ourselves and the rest of the continent a great disservice if we reneged on our commitment to current and future enlargement.
The hon. Gentleman spent the first eight minutes of his speech talking about various European security and defence policy operations. Does he think that the enthusiasm of some countries for the 14 missions is connected to the fact that those missions are second-pillar operations and are intergovernmental in nature? The European Commission is not involved in any of them and the European Parliament does not have competence in that area. He mentioned the mission to Bosnia—Operation Althea. One of the largest contributors to that mission is Turkey, which is an applicant state and not yet an EU member. Several other states, including Ukraine, were involved in those missions.
I welcome the fact that non-EU member states have co-operated with the EU in a number of those missions. I welcome, too, the fact that the old theological argument about NATO or the EU has been resolved. It was important that SFOR in Bosnia and Herzegovina was transformed into EUFOR relatively smoothly, with German concerns about national caveats and so on being resolved. In time, the EU may play a greater role in parts of the world from which the United States chooses to step back.
I am not saying that the EU will be in Afghanistan instead of NATO, but we are at the point where European Union countries and other countries—the hon. Gentleman mentioned Ukraine and Turkey, but there are others—can work together in policing, monitoring and even military operations, as we have seen them do successfully in Africa and other parts of the world. There is nothing wrong with that.
Is there not another point that we could draw from the instance in Bosnia? The old theology of a divide between NATO and Europe is a false one, as my hon. Friend said—witness the fact that Swedish forces are operating alongside British forces in Bosnia, and there are also Swiss forces operating there. The British forces would not have been able to operate very effectively over the past six months without Swiss Cougar helicopters taking them around. However, is not the more important point that in the future it is likely that British forces will rarely work on their own? Consequently, the more closely we can integrate our operations with EU allies, the better.
That is already happening. There are not many EU countries—in fact, only ourselves and the French—who can carry out the gamut of defence activities. There are arguments that certain of our EU partners need to do far more on their defence budgets and their commitment to security. In particular, I hope that the new German Government will review their commitments. By relying on just a few European countries, we cannot deal with the many problems, especially in a world where the United States is reluctant to be engaged or feels that it is already over-committed elsewhere. We need others to be involved and to provide a breadth of support. Such co-operation is working and many examples can be quoted.
There are potential problems. I spoke about enlargement, and it is reported that French Government officials are saying that future enlargement will not go ahead if there is not financial support for it. That is code for, "Don't mess around with the budget. Give us more resources, otherwise we will block Macedonia and potentially Turkey". They have some difficulty with the fact that we were so successful at the opening of the accession negotiations on
We in the UK must maintain our unity and consensus about future enlargement. I have been encouraged by the remarks about the need for further widening and enlarging of the EU. Whatever changes the Conservative party undergoes in its 18-month reflection period, I hope that it will not go back on the commitment to enlargement and the accession of Turkey.
Does the hon. Gentleman agree that, realistically, Turkey is not likely to join the European Union because President Chirac, in an unsuccessful attempt to buy support for the European constitution, conceded a referendum, and something similar has been done in Austria? Turkish membership is popular among politicians, but not among the people of those countries. I am afraid that Turkey is being led up the garden path and is very likely to be disappointed.
There have been great changes in Turkey in the past four or five years. The prospect of EU membership will, I suspect, lead to even greater changes. Nobody is saying that Turkish membership of the EU will occur in the next five, seven or even 10 years, so let us wait and see where we are when that referendum takes place, if it takes place. President Chirac will be long gone by the time Turkey joins the EU.
On a related point, is the hon. Gentleman aware of a report that is being drawn up for the European Parliament about the future of the European constitution? It is being prepared by Andrew Duff of the UK Liberal Democrats, together with Johannes Voggenhuber of the Greens, and it is believed that they will recommend that a constitution should be in place in the EU before Turkey could ever accede. Does the hon. Gentleman agree that that would put Turkey's membership in the medium or long term in severe doubt, because we will not have a constitution in the form that has been presented to us over recent months and years?
I am not aware of that report, but I shall try to find out what it says.
My hon. Friend Hugh Bayley has spent some time discussing trade and the importance of progress at the negotiations in Hong Kong, which relate to important issues such as the common agricultural policy, US farm subsidies and other international difficulties. It would be absurd if we were to discuss the repatriation of negotiations on trade. The only reason why we, as Europeans, could stand up to the United States when it introduced its illegal and unjustified steel restrictions was because we, as Europeans, were collectively strong enough to take them on.
I do not want a world in which one country, the US, or perhaps two countries, the US and China, totally dominate all the small countries because of their weight in the global economy. There should be a multi-polar negotiating structure that involves trading blocs which are strong enough to resist the most dominant and the most powerful, whether that is the existing great power, the United States, or the coming great power, China, which will dominate the east Asia region. As Europeans, we will be extremely vulnerable if we allow our internal divisions to reduce our ability to negotiate and stand up for our interests in future trade talks.
I am not a fan of the CAP. I represent an entirely urban constituency, which does not even contain a city farm, so I have no interest in my constituents consuming food that costs significantly more than it would had it been bought on the world markets. I also have a commitment to developing countries, and the CAP and related regimes have caused great damage to many poor people in poor countries around the world. However, the aspiration to get rid of the CAP does not mean that it will go, and we must work hard to achieve that objective over the coming years, which is why it is important that the Government stand firm on their commitment to hold a review as soon as possible.
In future, even less of the EU budget should be spent on the CAP. In recent years, there has been a welcome reduction in the percentage of the budget that goes on agricultural spending, but the perspectives for the next few years still mean that about 39 per cent. of the total budget will go under that heading, which is too much. The matter should be re-examined, because the CAP is not in the interests of Europe, the developing world or my constituents in Ilford, South, given the prices that they pay for imported food.
In the course of today's debate, I have sensed a sea change, which is less obvious in some cases than others. I have participated in debates in this House for the past 20 years, and for the first time I have detected an element of realism, although it has not necessarily been reflected in the remarks by some of the more fanatical members of the Europhile contingent.
Enlargement, which I have always supported, and the idea of co-operation in Europe, which I have also always supported, are producing their own consequences. It is apparent and clear, irrespective of whether any of us went to France during the French referendum, that the French people decided against the constitution, and the Dutch decided against it, too, but nobody can claim responsibility for that.
The fact remains that a substantial shift is taking place, even if it is not yet more than a tremor. There is an increasing recognition of the lack of democracy in the European Union. The argument is beginning to move to the question of whether, irrespective of the fate of the constitution, the existing treaties are adequate to deal with the dynamic that I described. I mentioned the best efforts of the Prime Minister, although that is not to say that I think that his best efforts are anything like good enough. I took the trouble to read his speech to the European Parliament and agreed with many of the sentiments that lay behind it.
As I said in International Development questions the other day, I am extremely glad that the Government are taking a far more constructive view about the developing world. We see all the debates that are going on in Hong Kong and in the Doha round, and the attempts to reform the common agricultural policy in the interests of getting a proper balance between farmers in the developed world and those who are desperately and damagingly poverty stricken in Africa and other parts of the world.
Yesterday, the European Court of Justice made a ruling—no doubt on the basis of some argument that had been put to it—gathering to itself the right to make decisions about the Marks and Spencer tax case. Cadbury-Schweppes is another such case. We need not go into the detail of that. Low growth and high unemployment are problems in France and Germany and in other parts of the eurozone.
This realism is not born out of the so-called previous rantings of the Eurosceptic right. In the past, some have no doubt been prepared to point a finger at me, and perhaps even at my right hon. Friend Mr. Heathcoat-Amory. I would say that there is no harm in looking at the record and asking who has been right over the past 15 or 20 years. It has been a shared operation by those who have persistently and consistently argued for a policy of Euro-realism. One extremely prominent new Labour Member of Parliament who is not that far from the Chancellor of the Exchequer said to me the other day in the Lobby, "Bill, you call it Euro-realism; we call it realism." Some of the policies that the Chancellor is putting forward show an understanding of the necessity for open markets and competitiveness.
I have visited the countries of eastern and central Europe many times, and I have many friends there to whom I talk regularly. A few weeks ago, I had the pleasure of meeting some of them—they were from the Czech Republic—in this Parliament. They were social democrats, not from the centre right. They expressed their deep concern and disillusionment about overregulation in Europe, their discovery that their agriculture was being put under severe duress, the significant reduction in the amount of cultivated land in the Czech Republic because of the imposition of European quotas on products such as milk and sugar, and the fact that the Czech Republic had been self-sufficient in agricultural products before joining the EU, but was now a net importer of them.
Anyone who heard me say that a few years ago might have remarked, "There they go again—Eurosceptics ranting on." However, I read the information from an informal note prepared by an official in a European Committee, who heard what was said and took careful notes. It is necessary to work towards the co-operation in Europe that I mentioned, bearing in mind the comments of my right hon. Friend the Member for Wells, with which I agree, that the way in which the acquis and the treaties are constructed and the institutions established does not admit of the sort of reform that we want, let alone what the Prime Minister wants. We have an increasing amount of realism and a greater dynamic towards making things right yet a problem that is inherent in the structures prevents the latter from happening.
Sir Menzies Campbell is right to say that the Prime Minister has failed in the EU recently but that is because he is hitting his head against a brick wall. It is no good talking to us about 68 proposals for deregulation. As my right hon. Friend the Member for Wells said, they mainly deal with accession agreements and matters that are defunct. If we are to make a difference to dynamism and enterprise for those countries that are in a proper relationship in the European continent, we must make sufficiently radical changes to ensure that something happens.
Although progress has been glacially slow on reforming the CAP, there is nevertheless progress. How does the hon. Gentleman account for the fact that, when I first knew the CAP in the late 1970s, it took 78 per cent. of the EU budget and the figure is now 40 per cent.? I hope that he is prepared to concede that some progress on reform has been made.
I concede that the percentages have changed as the hon. Gentleman described, but we are now at a watershed in Europe. There is therefore a need, which also applies in the context of the developing world and in the interests of efficiency, to ensure that the levels are brought even lower. Time will tell, but at this juncture President Chirac makes it abundantly clear that there will be no change. That has become inextricably bound with the problems of the rebate, which has got bogged down. We shall see what happens in the next few days.
Much has been made of the falling proportion of the EU budget that the CAP consumes. However, the EU budget is much larger than when Britain joined and, viewed as a proportion of the EU's gross national income, agriculture is more costly than it was when we joined.
The structure of the CAP is such that the sole legitimate governmental function is exercised by the European Union, as is also the case for trade, according to the legal arrangements laid down by the treaties. There is no reason on earth why we should not provide the necessary subsidies to our own farmers, or why we should not enter into proper trading relationships with other countries, if there were a tangible advantage in doing so. However, because we are hidebound by the treaty arrangements that created the common agricultural policy, the common fisheries policy and so on, we are unable to make those changes without breaking the law. That is why I reassert my proposals regarding the supremacy of Parliament over and over again. When our vital national interests are affected, it is and should remain the case that we will legislate on our own terms, unilaterally, in our own national interests, if we have to. We should not be overawed by the fact that some treaties that might have been relevant to past thinking have been drawn up to deal with problems that are not relevant to the present.
There seems to be a difference of opinion between the hon. Gentleman and Mr. Heathcoat-Amory. Does the hon. Gentleman really believe that there should be a free-for-all in agricultural subsidies across Europe? That seems to be the end point towards which his logic would lead. He seems to be saying that we in Britain should be able to give out whatever agricultural subsidies we want to. The cost of such activities would go through the roof across Europe, and there would be no benefit whatever to the developing countries.
We are engaged in a dynamic process at the moment, and changes are needed. At this juncture, however, the proposed changes to the common agricultural policy are being blocked by France in its own protectionist national interests. I hope that, in the course of these discussions, some common sense will eventually emerge, resulting in our not being completely constrained by the common agricultural policy. The CAP is the elephant sitting in the room. It is unnecessary to have a common agricultural policy in order to have a sensible agricultural policy. There is a difference.
We must be radical in our approach to all matters affecting the European Union because its structures were constructed in the 1940s and 1950s and, thereafter, were followed by the treaties of Maastricht, Nice and Amsterdam and, ultimately, by the European constitution. None of these was ever pursued, in this Parliament at any rate, with any kind of rational explanation. We were simply told that this was the way forward and that they involved negotiating positions that we had to try to accommodate.
The problem that we now have in Europe is such that we are at a crossroads. It is therefore essential that everyone, whether in the Government or the Conservative party—or even, to judge by what I have heard from the right hon. and learned Member for North-East Fife, the Liberal Democrat party—takes a realistic view and starts to work out which structures are relevant. We must also recognise that, in order to achieve the necessary changes, there will have to be substantial, radical reforms that other member states in the European Union are not disposed to implement.
The hon. Gentleman mentioned pro-Euro-realism. I believe that that phrase was first used by the Chancellor of the Exchequer in his Mansion House speech in 2001. The hon. Gentleman talks about withdrawing unilaterally in regard to agriculture and trade, and gives the impression, as members of his Front Bench have done, that we can somehow pull away from qualified majority voting or even leave important groups in the European Parliament, such as the European People's party. Is he not at that point withdrawing from the world of realism? Is not that form of realism really the realism of withdrawal?
I think that it was T. S. Eliot who said that humankind could not bear very much reality. The hon. Gentleman may just have demonstrated the importance of that statement. To be realistic in this context includes accepting the fact that the Lisbon agenda, for all its attempts to improve the competitiveness of Europe, has failed. Recently, in the European Reform Forum, we took evidence from Will Hutton, who was the rapporteur on the Kok report. He indicated that, as he said in his report, he was deeply concerned about the failure to make the kind of progress needed. The European Reform Forum has also taken evidence from Lord Owen, Lord Dahrendorf and those on the left and right such as my right hon. Friend Mr. Redwood, Rodney Leach, Charles Grant and others. We have asked open-ended questions of a cross-section of people, with a view to trying to find out whether there is a rational basis for the status quo of the existing treaties, and whether there is or ought to be a serious examination of those existing treaties to improve the situation in Britain and Europe as a whole.
I fear that the hon. Gentleman is in danger of falling into the same trap as Mr. Hague in assuming that the failures of the Lisbon process are somehow down to the EU. Let us remember that the competence for the Lisbon process is overwhelmingly with the nation state. I am sure that the hon. Gentleman would be the last person in the House to advocate that competences for labour market reform and other structural matters should be handed to the European Union.
I think that the hon. Gentleman is rather perversely misinterpreting the information at his disposal. The fact is that the Lisbon agenda is an EU initiative, and it has failed. The best thing that I can recommend him to do—I am surprised that he obviously has not done it—is to read the excellent, or at least interesting, report by Will Hutton. That will answer his questions.
Problems relating to fraud are endemic in the European Union and have not been solved. There were the incidents involving Martha Andreasen, about which we have heard a lot. Nothing effective has been done to change the system to make it work properly. The Court of Auditors has failed to sign off the accounts for the 11th year. Those things are now common knowledge.
I remember saying to the Prime Minister, shortly after he took up his post in 1997, that he was walking on water now but he would drown in Europe. At the time, he did not really believe that that was possible, but it really looks as though it might be happening. The cheerleader, Peter Riddell, an eminent columnist whom we all read avidly, said in a recently published book, "The Blair Effect 2001–05":
"So after eight years Blair had failed in his initial aim of ending the decades of British distance, reservation and hesitation about Europe . . . Europe has been a central failure of his premiership. Moreover, since it was one of his top priorities in 1997, Europe is a failure that will feature heavily in the final assessment of his record in 10 Downing Street."
If that is the case, and the analysis comes from somebody as respected and distinguished as Peter Riddell on a subject that he knows well, all I can say is that the situation has got completely out of control and must be restored, and the existing treaties must be reformed, which will include some extremely difficult but necessary institutional changes. I put it to my party that that will involve a realistic assessment of the kind of Europe that will be capable of delivering prosperity and democracy in the next century. I fear that it will not be capable of reform in its present shape, and that it will therefore fall to the individual member states—and Britain in particular—to take unilateral action to ensure that those things are done, first through diplomatic negotiation and secondly through assertion of the supremacy of our own Parliament.
There is a vast amount at stake in terms of stability. That has been demonstrated by what is going on in France and Germany, and the rejection of the constitution. There is a massive democratic deficit. In my opinion and, I believe, the opinion of a growing number of people here and elsewhere in Europe—not among the elite, but among the ordinary people—there will be an increasing need to move to a form, whatever it may be called, of associate status. That will enable us genuinely to co-operate in a democratic environment, while sustaining enterprise and business in the new global economy and also ensuring that we preserve the rights of the people who elected us to make decisions on their behalf.
As we all know, this week's European Council comes at the end of the six-month British presidency. I think it is fair to say that disappointment has been expressed in some quarters about the presidency, but we should bear in mind that just a few months ago there was talk of Europe being in crisis. The constitutional treaty had been rejected by the French electorate and by the electorate of the Netherlands, and in many quarters there was great doom and concern about the future for Europe. Would it implode? Would the crisis lead to an unravelling of the whole nature of the European Union? It is to the credit of the British presidency that the Government have taken the lead in getting to grips with the situation, and in introducing what they have called a period of reflection.
That period of reflection was required. We have now begun to engage in a sensible, down to earth, pragmatic debate on what the European Union is all about. We have also refocused on the issues that really concern people from day to day throughout the member states. Let me give an example. An issue that has loomed large in the British presidency, which I do not think has been mentioned so far today, is the collective emphasis placed on the fight against terrorism. That is tremendously important, and, although it was not anticipated, the presidency has risen to the task of tackling it effectively. For instance, we have seen agreement on the storage of telephone and internet data for use in terrorism investigations, which is of almost inestimable practical importance in the fight that we all face daily.
My hon. Friend speaks of the progress that has been made on terrorism. One practical example of the way in which European co-operation works in that regard is the use of the European arrest warrant to apprehend an alleged participant in the
That is a very good example. It precedes the British presidency, but it has been put to good effect. As my hon. Friend says, when Europe focuses on issues that are of real concern to people it can be extremely effective, and can command support on that basis.
Another issue that is high on the EU agenda is people trafficking. In recent days and weeks, a number of member states have announced that they have launched inquiries into alleged people trafficking by one of our coalition allies in the fight against terrorism. Does the hon. Gentleman believe that the UK Government should work with our EU partners to stamp out all alleged people-trafficking?
Without being drawn into specifics in any oblique way, as a matter of principle, yes, there should be dialogue and discussion, and where practical co-operation is mutually beneficial, it should of course take place.
The other issue of central importance to the British presidency has been the enlargement of the European Union. According to the treaty that was agreed and ratified by this House, at least, Romania and Bulgaria should join the EU in January 2007. It is true that both countries have a great deal of work to do in the next few months to ensure that the European Commission can propose to the Council next April that they are indeed ready to join, but there is good evidence to show that they are making a big effort and that they will be ready.
I draw attention in passing to the case of Michael Shields, the football supporter from England who was arrested in Bulgaria, to whom reference was made earlier. The European Scrutiny Committee raised this issue as part of our discussions when we went to Bulgaria the other day; indeed, I raised it with the Bulgarian President. The Bulgarians are acutely aware of that case and I know full well that our Foreign Office has been working hard on it.
In that context, is the hon. Gentleman also going to refer to Turkey and the Ocalan case?
If the hon. Gentleman will contain his enthusiasm for a moment, I shall logically work my way toward Turkey.
It is noteworthy that in the past six months the European Commission has proposed that Macedonia become a candidate country. That is important, given the recent history of warfare in the Balkans. If the EU can be used to bring more stability to, and cohesion in, the western Balkans, that is to be warmly welcomed.
I turn to Turkey, to which Mr. Llwyd referred. As we know and as Members in all parts of the House will welcome, Turkey—along with Croatia—has begun negotiations on joining the EU. The momentum that has built up in the past few months is likely to continue. Genuine reform has taken place and there is the real prospect of Turkey's future EU membership stimulating further reform. Of course, many things are still wrong in Turkey. When the ESC visited Ankara last week, we discussed with the Turkish authorities some of the current misdemeanours and incidents of human rights abuse in that country. No one would condone such behaviour for one moment, but it is important to recognise that our being able to have that dialogue and to put pressure on the Turkish Government is worth while in itself and is already producing positive results.
Of course, the issue that will loom large in the next few days is the financial perspective: the EU budget for 2007–13. In that regard there are two closely linked issues of central importance: the common agricultural policy and the British rebate. The case for reform of the CAP has been well made time and again in this House and elsewhere. As we all know, it needs fundamental reform in the interests of the British consumer and taxpayer, and of poorer people throughout the world. Our Government are absolutely right to say firmly—to the French Government in particular—that we want nothing less than full-blooded reform and that we will fight on until it is achieved.
It would be wonderful and easy for us to conduct negotiations among ourselves about what the financial perspective should look like, but it is important to emphasise that, however long it takes, we must continue to argue the case for reform. Ultimately, that case is unanswerable: sooner or later, the French Government will have to accept it. More information should be provided better to inform the debate.
It is important to recognise that the British Government have moved on the rebate to some extent and for justifiable reasons. We do not want to penalise countries that have just joined the EU in respect of their contributions. We do not want them subsidising the British rebate. Furthermore, many of the new countries are making use of and looking forward to future structural funds from the EU.
One of the biggest problems faced by the east European countries is absorption. Indeed, we had to confront a similar problem in south Wales under the last Conservative Government, when industrial south Wales was classified as an area of support called objective 2. We had real difficulty drawing the money down from Brussels because of the match funding stipulations. There were problems at that time with public expenditure, but the point that I am making is that it is not as easy as simply allocating tranches of money in one direction. The money must be used effectively and the match funding and infrastructure must be in place so that the full amount can be put to the best use.
Many of the Governments of central and eastern Europe now recognise that, under the Luxembourg presidency's proposal, those large sums of money could not be used effectively. We are seeing a greater realisation among those countries that it is important to have the money quickly and up front and to make the most effective use of the structural funds that are allocated. This is not a theoretical debate about large sums of money, but a practical debate about how to invest specific amounts of money as quickly and effectively as possible.
Does the hon. Gentleman agree that structural funds have played a significant role in the economy of Wales and Scotland? Does he share my concern that part of the UK Government's position might result in a step-change reduction in structural support, although the need for such support in Scotland and Wales remains? What would be his advice to Ministers about the stage at which such reductions become unacceptable?
Of course I want to see as much money coming into my constituency and nation as the hon. Gentleman does into his constituency and nation, but it is important to recognise what the Chancellor has said on many occasions: whatever the final agreement reached under the British presidency or later, the regions and nations of the UK that are presently in receipt of structural funds will not lose out. We have a cast-iron commitment, whatever the hypothetical scenarios of the future, that that support will continue.
If agreement is reached in Brussels over the next few days—I certainly hope that it will be reached—it will not be the end of the story as far as the financial perspective and the budget are concerned. If agreement is reached, negotiations on the fine detail of the budget will continue next year under the Austrian presidency and discussions will carry on under the inter-institutional agreement. The European Parliament will be intimately involved and it would be wrong for us to think that those discussions do not matter. They matter a great deal to the fine detail of the final budget arrangement.
We must also recognise that the European Parliament has real powers these days. The co-decision procedure gives it real influence on EU legislation, so it is all the more remarkable for the Leader of the Opposition to suggest that his 27 MEPs should neuter themselves, in effect, by leaving the European People's party, and so consign themselves to political oblivion in the European Parliament.
I am sure that the House is fully aware that Mr. Clarke has, in his usual way, made some very trenchant remarks. However, hon. Members may not be so well aware of what some Conservative MEPs have said recently. I refer in particular to an article in this morning's edition of The Times by Caroline Jackson, who has been Conservative MEP for South West England for many years. She is a very distinguished European parliamentarian, and has chaired that Parliament's Environment, Consumer Protection and Public Health Committee with some distinction. In the article, she considers where Conservative MEPs might go on leaving the EPP, and with whom they might associate. She states that
"so far the only possibilities may be Polish and Czech peasant nationalists, three eccentric Swedes, a French protectionist Eurosceptic and two MEPs from the Netherlands' extreme Christian party which wants to stop Sunday . . . riding."
That says a great deal about the options facing Conservatives in the European Parliament.
If I may, I shall give the House one other quote. It is from Mr. Edward MacMillan-Scott, a Conservative MEP who is treasurer of the Conservative group in the European Parliament. At one time, he was its leader, and he was quoted in the Daily Mail as saying:
"I can't believe that a leader of the Conservative Party would seriously contemplate breaking the last remaining international link that the party enjoys. I negotiated an agreement with William Hague when he was leader in 1999 that we would remain associate members of the EPP. The alternatives are frankly barking."
Does the hon. Gentleman share my concern that the stance taken by the Conservative party in disassociating itself from the EPP will damage the British national interest, at a time when many large Governments in Europe are run by centre-right politicians? That is especially worrying, given that the recently elected Chancellor of the EU's most populous and, in terms of overall GDP, most prosperous country belongs to a centre-right grouping from which our Conservative party is trying to distance itself.
Yes, I am concerned about that. Of course, it gives Labour Members much joy and pleasure to make fun of the ridiculous position that our Conservative opponents' new leader has put them in, but I am very concerned about our national interest.
The point that I was implying was made explicit by Mr. Browne. It is that the EPP is the largest group in the European Parliament, where negotiations are going on about the EU budget. The EPP is fighting hard for a certain political outcome, and it also contains British MEPs who—I hope—are fighting for the British national interest. Taking those British MEPs out of the EPP and marginalising them is bad for the Conservatives, but it is also bad for our country's national interest.
Like me, the hon. Gentleman is a member of the European Scrutiny Committee. Does he accept that Labour MEPs have also disagreed with their Government on occasion? When one cuts to the chase, do not the real questions have to do with the nature of our national interest, and who represents it? I believe that the short answer is that the national interest is represented by our Government, who are elected in the Westminster elections. Final accountability ultimately rests with this Parliament, and the key point is that we are talking about national sovereignty.
With all due respect to the hon. Gentleman, this is not an academic debate; it is a debate about practical politics and practical influence. In the EU as it currently exists, power is divided between the European Commission, the European Parliament and national Governments. If we are to be truly effective in exerting our national influence, as well as changing the face of Europe, we must ensure that we exercise our influence in all those different institutions. That is the important point that we must bear in mind.
In conclusion, it is very fortunate that we are having this sensible and constructive debate on the eve of such an important summit. I do not think that it will be the end of the world—it certainly will not be the end of the EU—if agreement is not reached on the budget. Discussions will have to continue into the Austrian presidency and, possibly, beyond. However, there is a very good chance of reaching an agreement in the next few days. I am absolutely confident that the British Government have ensured that, at the end of their presidency, Europe is pulling together far more than was the case six months ago. Britain's national interest has been clearly and precisely mapped out, and the British Government have done so in such a way that is not just crudely in Britain's national interest; they have couched their arguments so that they are seen as in the interests not only of Britain but of the whole EU. That is why, on balance, I am optimistic that an agreement will be reached on the new financial perspective that will be good for Britain and good for Europe as well.
Thank you, Mr. Deputy Speaker, for calling me in what is a most important debate.
I welcome my right hon. Friend Mr. Hague back to the Front Bench. He brings considerable experience and credibility to debates on foreign affairs and a great deal of knowledge of the subjects that we are discussing. He mentioned in his speech a great deal of disappointment, which is general not only in this country but throughout Europe, at the lack of any real achievement from the UK's presidency of the EU over the past five and a half months, without saying that there would be no achievement at all.
I congratulate the Foreign Secretary and the Government on their one achievement of the presidency: the opening of negotiations with Turkey. There were times when I thought that they might be knocked off course by a number of European leaders—most notably, the President of France, Mr. Chirac—but the Foreign Secretary certainly saw his way through and negotiations were opened with Turkey. That is the right way to proceed. The Turks accept that that will be a slow process.
A few months ago, I attended a meeting with the Turkish Finance Minister, who openly said that he was looking at a minimum time scale of 10 years for the negotiation process before Turkey will become a full member of the EU, but it is right that we should be moving in that direction, as we are doing with Romania and Bulgaria. I also welcome the opening of negotiations with Croatia. A number of other states, both in the Balkans and elsewhere, are eyeing EU membership, but I want to talk, Mr. President—[Interruption.] I apologise for that slip, Mr. Deputy Speaker.
I want to talk about another presidency that runs in parallel with the presidency of the EU, which the UK Government hold at the moment: the presidency of the Western European Union. They are interrelated, because, as I said earlier, the European Commission and the European Parliament have no competence in European security and defence policy, but the WEU, which predates the EU and the European Economic Community, has such competence. The military operations of the WEU are vested in the EU and the two bodies act in parallel—a concept known as double-hatting.
The WEU Assembly is composed of members from several national Parliaments, including ours; 18 Members of the House and the other place are full members of the Assembly and 18 are alternate members. The Assembly meets twice a year to oversee security and defence policy in the European arena. It is custom and practice that the Government holding the EU presidency come to the Assembly, in the shape of either their Foreign or Defence Minister, to answer questions and make a presentation on the achievements of the presidency in European security and defence policy.
It was thus with great embarrassment that, at the June session of the Assembly, British members found that although the Foreign Secretary's name appeared on the agenda, he failed to turn up as he had discovered that he had business elsewhere. Not only did he fail to turn up, he failed to send any of his junior Ministers at the Foreign Office or a Minister from the Ministry of Defence. Instead, he sent the British ambassador in Paris to read out his speech and answer questions on it. The ambassador was extremely competent, but he is not a Minister.
At the Assembly's most recent meeting, which took place last week, we were full of hope that, given the achievements that had been made, the Foreign Secretary would make a speech to the WEU. His name appeared on the agenda for Wednesday, but on Monday morning the agenda was changed to indicate that yet again his speech would be read by the British ambassador, as the Foreign Secretary had urgent business elsewhere. We all understood what that business was: he was trying to negotiate the budget. Again, however, a Foreign Office with six or seven Ministers, and a Ministry of Defence that probably has the same number, failed to send a substitute and the speech was read by the British ambassador.
That was doubly embarrassing, because Austria, which takes over the EU presidency on
Britain is a founder member of the WEU, so it was with some embarrassment that I discovered yesterday—I gave the Foreign Secretary prior notice that I would raise this point—that the UK had failed to pay its budget contribution to the Assembly, to meet the salaries and pensions of its staff. The amount is not enormous: €278,000 or about £190,000. I understand that this is not the first time that it has happened, but on the previous occasion on which the United Kingdom failed to pay, the Assembly secretariat was promised that it would not happen again and told that there had been an oversight. An oversight has happened again, so by the time that the Minister makes his winding-up speech, I hope that someone in the Foreign Office will have found their biro and cheque book and made the payments so that the staff of the body can be paid at the end of the year.
We can trace back the whole concept of the European security and defence policy in its present guise to the Maastricht treaty, which quite clearly set it up as a second pillar operation, meaning that it was intergovernmental. As it is an intergovernmental arrangement, it does not involve the European Commission or the European Parliament. There might be some hon. Members who welcome the fact that those bodies are not involved, but there is scope for parliamentary scrutiny.
I am sorry that the Foreign Secretary has left the Chamber again because I going to quote from the speech that was read for him last Wednesday—I hope that he wrote it so that he knows what I am about to cite. It is all about parliamentary scrutiny. As Mike Gapes, the Chairman of the Foreign Affairs Committee, said, 14 military operations are taking place under the ESDP, but I am worried about the lack of accountability and scrutiny.
The Foreign Secretary's speech last week said:
"Scrutiny of European defence and security issues by national parliaments is essential. The WEU Parliamentary Assembly remains a unique forum to facilitate interparliamentary dialogue and discussion. The Assembly is inclusive and reaches beyond the boundaries of the EU. It continues to offer an important link between EU citizens and governments in security and defence—vital issues our citizens care deeply about".
If the Assembly is to provide that link between Governments and the people, we must bear it in mind that the Foreign Secretary is presently the representative of those Governments as the holder of the presidency of the WEU.
The Western European Union—I will not go on about this ad infinitum—dates back to the 1948 Brussels treaty, which was why I said that it predates the European Community and the European Union. The Assembly was established in 1954 under the modified Brussels treaty and it had its first meeting a year later.
The hon. Gentleman may or may not be aware that these debates are normally held before European Councils so that we can reflect on the presidency of whichever country has held it and perhaps offer advice or support for the forthcoming meeting. I understand that the Western European Union is not on the agenda of the forthcoming European Council.
If the hon. Gentleman does not believe that the matter is on the agenda, he does not believe in democratic accountability for the European security and defence policy. As has already been pointed out, seven more missions under the ESDP have taken place under this presidency. Surely we, as parliamentarians, should exercise democratic scrutiny of what is being done in our name and the names of the peoples of Europe under the policy. If the ESDP is not on the agenda for the European Council, it jolly well should be. I believe that it will be on the agenda because there will have to be stocktaking of what has taken place regarding the missions, especially the new missions that are under way and those that have been agreed to. Only two weeks ago, the EU agreed to a new mission on the border between Moldova and Ukraine.
I would appreciate the hon. Gentleman's remarks more if he would discuss the new institutions and not go back to 1948.
I was merely trying to give right hon. and hon. Members who may be unaware of their role and powers in this regard an outline of what they are. I will continue briefly to develop that point. It is important that we have scrutiny of European intergovernmental activities because that scrutiny cannot be exercised elsewhere. It must be exercised either through individual national parliaments or through an inter-parliamentary body. That body already exists, and it has existed since 1954. I have made the point about the Foreign Secretary's non-attendance at two important meetings. It is important that Governments take note, and particularly that the presidency takes note, of the fact that parliamentarians deserve to be treated in such a way that they can exercise appropriate scrutiny and achieve democratic accountability.
The nature of the operations that we have embarked upon—the 14 missions—is that they take place under the Berlin-plus agreements, which means that they take place within NATO. They are EU operations within NATO, using NATO assets. The EU military commander in this regard is the deputy Supreme Allied Commander Europe of NATO.
There are missions in the Balkans, to which reference has already been made. There are missions in Iraq, Afghanistan and in Palestine, which the hon. Member for Ilford, South mentioned. There are other missions in Africa and also in south-east Asia. I am concerned about the lack of effective scrutiny of these missions. If the European Parliament has no competence, is it realistic to expect 25 individual national parliaments to exercise effective scrutiny of missions that are intergovernmental and international with an international commander? That is why I make the point that under the second pillar of the European Union, this intergovernmental pillar, we should give real weight to the one inter-parliamentary body that exists, which is the Western European Union Assembly. Power is exercised already in terms of the Council of the WEU in the form of its permanent representatives, which is also the Political and Security Committee of the EU. The western European armaments group has become the European Defence Agency and the military staff are now part of the EU. If we are to have effective parliamentary scrutiny, Ministers must attend.
I will make one other point on scrutiny and I direct it to the Minister, who can relay it to the Foreign Secretary, who holds the presidency of the General Affairs Council. It is that the EU high representative, who is Secretary-General of the European Council, and was also Secretary-General of the Western European Union, Mr. Javier Solana, must also be subject to some form of democratic accountability. His record is worse than that of Ministers. It is four years since he has subjected himself to any form of democratic scrutiny.
I understand that Mr. Solana never appears before the Political and Security Committee of the EU. He rarely appears before the General Affairs Council because he regards himself as solely responsible to Heads of Government and Heads of state. He appears to go round the world like some proconsul taking responsibility for sorting out all this ESDP on his own shoulders and then presenting the occasional report to Heads of State and Government in the European Council.
This democratic deficit must be solved. There has to be better scrutiny of all EU affairs in the House and in other national parliaments. We must make sure that accountability and transparency is much greater in Brussels. I was not in favour of the European constitution, but one of its provisions was that the Council should meet in public for its decision-taking processes. That does not require a treaty or a constitution, and the decision could be put before the Council by the incumbent presidency. Given that the constitution is no longer on the radar screen, I am disappointed that the UK presidency has not put before the European Council the proposal that the Council of Ministers should meet in public so that we can see what decisions are made.
Keith Vaz, a former Minister for Europe, said that he always argued Britain's case in the council. It would be nice to see our Ministers doing so, so that we can be sure that a British Minister has argued our case. If they lose, we can see them doing so. At the moment, when Ministers find a decision from Brussels embarrassing they use the cover of blaming Brussels, even though they were at the Council meeting that agreed those provisions. We therefore need transparency in that decision making. Finally, we need much better and much more effective democratic scrutiny of the ESDP, which is a second-pillar measure.