I beg to move,
That this House
takes note of European Union Document No. 15521/13 and Addendum, a Commission Communication: Commission Work Programme 2014;
agrees that this document is a useful tool for planning the Government’s and Parliament’s engagement with the EU in 2014;
and supports the Government’s view that measures which promote growth and jobs in the EU, including measures towards completing the Single Market, are the top priority.
This year’s work programme is the last for the current European Commission. It covers what the Commission is giving priority to in the final months of its mandate as well as some new initiatives and, of course, it does not cover everything that the European Union and its institutions are doing.
In last year’s debate on the annual work programme, right hon. and hon. Members focused in particular on the process of our scrutiny of European legislation. Prior to this year’s debate, the House’s European Scrutiny Committee published a report on reforming scrutiny in this place. I want to give the House an assurance that the Government are considering that report with the seriousness that it would expect and we will publish our response as soon as we can.
As the Minister has referred to the report and to the formal response that the Government must give to it under the conventions of the House, I think it might be appropriate to mention the reactions of some members of the Government—I will not say everybody—to the proposals. They were described as “unrealistic” by one Minister and “unworkable” by another. That is not entirely consistent with the formalities of the convention that applies, but I think we will find that we will get a good response, as the Government have also said that it is a very important study.
This is an important study, which makes a large number of recommendations. The recommendations in my hon. Friend’s report have a bearing on business, which is the responsibility of pretty much every Government Department. The discussions that we are having at both official and ministerial level reflect the breadth of the areas of policy covered by my hon. Friend’s Committee.
The Committee noted, in its report recommending today’s debate, that—
The Committee recommended that the debate on the work programme should provide a useful starting point in the upstream scrutiny of EU proposals, and should help Parliament to make an early assessment of those dossiers in which parliamentarians are likely to take particular interest.
I thank the Minister for giving way. I wanted to intervene immediately after Mr Cash, because we read in the press that the Prime Minister had received a letter signed by 95 Conservative MPs supporting what the European Scrutiny Committee had said. Has the Prime Minister in fact received that letter, and do we know who those 95 people are?
I am afraid that I do not inspect the Prime Minister’s correspondence on a daily basis. If the hon. Gentleman wants to find out more about that letter he could go and talk to my hon. Friend Mr Cash, who chairs the European Scrutiny Committee, or my hon. Friend Mr Jenkin, or others who helped to draft that letter.
I shall give way to the hon. Gentleman, but may I say, Madam Deputy Speaker, that I am conscious of the fact that we have a limited amount of time for the debate. There are a number of Members on both sides of the House who want to participate, so while I shall try to give way wherever possible I am conscious of the need to allow others to speak.
The Minister is absolutely right, and he has been most courteous to the House. I trust that other Members will be courteous to the House in keeping interventions brief.
I advise the hon. Gentleman not to believe everything that he reads in the newspapers. If he directs his attention to the Government motion and, for that matter, to the European Scrutiny Committee report referring the document for debate, he will find that nowhere in the motion or the report is there any reference to letters from any right hon. or hon. Member on either side of the House. I propose to concentrate on the matters that the European Scrutiny Committee has referred to the House for attention and consideration.
This year, a new European Commission will take office. An important task is therefore to focus on those areas of the work programme that the United Kingdom Government would like to see as continued priorities for the next European Commission. It should come as no surprise to the House if I say that the Government’s priority is focusing on measures that encourage growth and jobs, and which are intended to deepen the single market, and on better and less costly and burdensome regulation so that we can free businesses in Britain and throughout Europe to compete vigorously in the global marketplace.
Does my right hon. Friend agree that a sensible reform for the European Union is to spend more than the 2% of its budget that it currently spends on trade on further promoting free trade agreements with countries around the world that could help precisely in generating jobs and growth in all EU member states?
My hon. Friend makes a powerful point. The directorate general dealing with trade does a pretty effective job, although, as she says, it accounts for only a very small proportion of the EU’s overall spending. If we are looking for a reallocation of priorities, I would agree that in terms of resource, good people, political priority and political will, global trade agreements should be a key focus for the UK and Europe as a whole.
Does my hon. Friend sense in the Commission’s work programme, including in the transition to the new Commission, a move to that agenda, to which we attach such importance for growth?
I do find in the Commission’s work programme an explicit acknowledgement that, for example, the EU is currently falling short in the implementation of the single market in services and the digital economy, and that more needs to be done in those respects. I also find an explicit commitment by the Commission to the priority that needs to be given to growth and jobs. In talking to Ministers from other European countries, I find them acutely aware of the challenge that Governments throughout the continent face from global competition, but also from the high levels of youth unemployment, which, tragically, we see in far too many countries.
May I give my right hon. Friend an example of an area in which the work programme includes a commitment that is burdensome to business, which has been scrutinised by the Justice Committee and needs to be changed, and it is the draft data protection directive?
Yes, my right hon. Friend makes a good point. As he knows, the Government’s belief is that data protection legislation is better handled by way of a directive than by way of a regulation, which does not allow properly for subsidiarity and the different systems in different member states. As a Government we are determined to ensure that the modernised data protection regime, which we need, in part to serve a continental-wide digital economy, is shaped in such a way as to minimise the regulatory burden on businesses. We want those data protection arrangements to be such that, yes, they give adequate protection to data subjects, but they do not hinder business from going out, winning the contracts and creating the jobs, as we all want to see them do.
After a slow start the Government have realised the economic benefits of fracking to this country’s economy. Under annex 2, on new initiatives, there are the regulations that will apply to fracking across Europe. Does he share my worries that there are members of the Commission who want to use those regulations to stop the exploitation of shale gas?
There are people in the institutions and elsewhere who certainly support policies that would inhibit the development of shale gas resources. We have made it very clear, from the Prime Minister down, that we believe that such a course would be wrong and would be a betrayal of the interests of European business, of European consumers, who would like to benefit from the lower energy prices that shale development would bring, and above all of the interests of those who are out of work, where a shale gas industry would not only provide additional employment in its own right, but, by maintaining a downward pressure on energy prices, would make it possible for more companies throughout the economy to hire additional employees. The UK Government will continue to work closely with the Governments of countries such as Poland and Hungary, which also have a clear commitment to the freedom of member states to develop shale gas resources in the interests of consumers and producers alike.
No, the hon. Gentleman has had a bite of the cherry already, so I will make some progress.
It is good that the Commission has focused on continuing negotiations on the transatlantic trade and investment partnership. The Government estimate that the benefits of that deal to this country could be worth up to £10 billion a year, or more than £380 for every household. Frankly, I would like to have seen even greater priority and emphasis in the work programme for that potentially transformative deal. I would also like other ongoing negotiations to have been mentioned, such as those on an EU-Japan free trade agreement, which we estimate could be worth £5 billion a year for the United Kingdom.
The Government also welcome the objectives of the telecoms package and the other measures in the work programme that would contribute towards the completion of the digital single market. For the EU to remain competitive, the single market needs to keep pace with developments in the digital economy. The digital economy is not only helping to connect, inform and entertain us, but driving innovation and growth across our economies.
The Minister talks about the need to deepen and complete the single market. At the same time he complains about excessive regulation. Does he not recognise that much of the excessive regulation has been brought in under the auspices of a single market, and that by extending and deepening it, he greatly expands the scope for excessive regulation, which produces economic stagnation?
I understand my hon. Friend’s argument, but—if I may say so—I think that he oversells his case. It is true that we can have European regulation, just as we can at national level, that is overly prescriptive, overly complicated and far too costly as far as business is concerned. Therefore, one of the tests that we have in mind when judging Commission proposals is whether in the first place the introduction of a single regulatory regime to govern a European single market would produce a net benefit for business, compared with the 28 different national regimes that would be eliminated as a consequence of a single European regulatory framework. Also, Ministers in this Government have argued repeatedly that we think the Commission could make more use of the principle of mutual recognition, which after all was made clear in the jurisprudence of the European Court of Justice some decades ago in the Cassis de Dijon case, rather than relying all the time on the detailed harmonisation of national arrangements, which can easily lead one into the sort of overly complicated system that my hon. Friend fears.
Does my right hon. Friend agree that completing the single market for services is so important for jobs and growth across the EU that we should be seriously considering whether those countries that want to proceed should continue under enhanced co-operation, leaving behind those counties, like Germany, that are far less willing to open their markets for services to other successful counties, like Britain?
Although my first preference would be a successful negotiation that would deliver a thoroughgoing single market in services across the whole European Union, if that ends up not being possible, my hon. Friend’s point about ending up with those countries that are willing to commit themselves to earlier and faster liberalisation doing so under enhanced co-operation is a very strong one indeed.
No, I will not give way to the hon. Gentleman again.
Securing investment in Europe’s energy infrastructure is critical to our long-term, sustainable economic growth. A cost-effective, flexible and ambitious 2030 climate and energy framework will provide clear and stable conditions for the up to €1 trillion of investment that European countries will require in the energy sector over the next 10 years. If designed in the right way, such a framework would complement domestic reforms here to ensure that the investment is forthcoming.
As has already been said in interventions, reducing the regulatory burdens on business is integral to boosting economic growth. The Commission’s REFIT—regulatory fitness and performance—programme was a welcome step towards reducing the burden of EU regulation on business and eliminating those barriers to growth, but we believe that the Commission needs to be more ambitious still to ensure that businesses feel real change.
There will indeed be measures in the REFIT package, as in other Commission proposals, with which we disagree. We have made it clear that we will continue to resist both the proposals to which my hon. Friend alludes.
It is also fair to say, though, that at a time when the Government are urging the Commission to act on the recommendations of the Prime Minister’s EU business taskforce, the Commission has already introduced some measures that implement what this Government, either off their own bat or by means of the business taskforce report, have been recommending. We have seen practical and proportionate rules on country of origin labelling for food and a member state agreement to a streamlined approach to the clinical trials regulation, with formal agreement due later this year. In addition, the Commission has committed itself to withdrawing the access to justice in environmental matters directive, as the business taskforce explicitly called on it to do.
We now want further action on the 30 specific recommendations in the business taskforce’s report, including on the REACH—registration, evaluation and authorisation of chemicals—directive to lessen its burden on small and medium-sized enterprises, in particular. Such radical, business-friendly reform is in the interests of job creation and business growth not just here in the United Kingdom but throughout the continent as a whole. We welcome the Commission’s commitment not to table new health and safety rules for hairdressers or to introduce new rules on ergonomics, and its commitment to withdraw a number of other proposals that we have long opposed on the grounds that they would impose unnecessary costs on business.
However, with regard to the REFIT package, it is disappointing that the majority of the repeals and withdrawals in the work programme relate to obsolete measures. We think that future withdrawals should focus on EU measures that impose the biggest burdens on businesses and do not deliver significant and commensurate benefits. We will not only continue to press this with the Commission but look for every opportunity to build alliances with other EU member states and, for that matter, with enlightened and supportive members in the European Parliament like our colleague Mr Malcolm Harbour, to ensure that the efforts to drive down business costs and increase the competiveness of European businesses are maintained.
No. I do not think that any member state would be able to say that they unreservedly welcome and endorse absolutely everything in the Commission’s work programme. Of the measures described in the work programme, there are some that we positively welcome, others where we think the proposal seems okay at first sight but we very much want to examine the detail of the promised measure before we come to a final conclusion, and others where we are quite open in saying that we think the Commission’s suggestion is mistaken. As I said to my right hon. Friend Sir Alan Beith, we have already expressed considerable concerns about the data protection package, and we will continue to negotiate to try to ensure that it does not over-burden business while providing adequate protection for personal data.
Nor can we welcome the draft regulation to establish a European public prosecutor’s office. We believe that the Commission’s evidence for this proposal is weak, and we will continue to challenge it on its unacceptable, rather summary response to the yellow card that national Parliaments raised about it.
My right hon. Friend is making an excellent point. Will he convey to the Commission how deeply disappointing it is for Parliaments to gather the requisite number of signatures for petitions from individual Chambers and for the Commission then peremptorily to say that it will go ahead all the same? That is very dispiriting for Parliaments.
I completely agree. It would be easier to accept the Commission’s unwelcome decision if, at the very least, it had produced a detailed explanation of its reasons and showed proper respect for the 19 different reasoned opinions. I continue to agree with my hon. Friend that the proposal is wrong, but I made it very clear at the last meeting of the General Affairs Council that I regarded the Commission’s behaviour on the measure as unacceptable, and I was pleased that Ministers from some other member states then spoke out and endorsed my criticisms of its approach.
The House will be aware that tomorrow marks a year since the Prime Minister’s speech setting out a vision for European Union reform. Today, there is growing support across Europe for reform and for accepting that it needs to become more competitive and democratic, so that it is a Europe in which, to quote the Dutch Government, our enterprise is based on being
“European where necessary, national where possible.”
As I said last week at the very stimulating conference organised by Open Europe and the Fresh Start group, we will get behind the proposal made by the Dutch Foreign Minister, Frans Timmermans, for a governance manifesto for the new Commission—agreed by the 28 accountable national Heads of State and Government—that lays out what Europe should focus on and, crucially, what should be left to member states. On the new items in the work programme, the House can be assured that we will be vigilant in relation to the subsidiarity principle and do our utmost to ensure that action is taken at EU level only when that is the correct level to take proposals forward.
We already work with partners across Europe to deliver concrete changes that benefit this country and every EU member state, including the first ever cut in the EU’s seven-year budget, which protects the British rebate; agreement on a single European patent after 23 years of negotiation, which safeguards the intellectual property of innovative British businesses; keeping the UK out of any eurozone bail-out facility, which safeguards British interests; and abolishing the obscene policy of discarding caught fish, which is a key element of wholesale reform of the common fisheries policy. It can therefore be done: reform is possible and it is happening. However, the Government recognise that there is much more still to do to make Europe more flexible, competitive and democratically accountable. Ministers will use every opportunity to push forward that agenda.
I welcome the opportunity to discuss the European Commission’s work programme for 2014. I thank the European Scrutiny Committee for its useful report. The Committee suggested that a debate before Christmas would be timely, and given the thinness of the Government’s agenda for this House, it is surprising that this debate has not taken place earlier.
The work programme published on
The result is that the Prime Minister finds himself in an increasingly isolated position in Europe. Indeed, the Prime Minister has been attracting an increasing number of openly hostile comments from crucial European allies. Germany, Poland, France and Bulgaria are our allies in Europe, and yet senior figures in their Governments—most recently the German Foreign Minister, Mr Steinmeier—have given briefings on their profound disagreement with our Prime Minister’s views. The political weight of the people in those countries who have made their disagreement with the Prime Minister known and the tone in which they have done so are concerning. Once again, the Conservative party is pushing Britain into the isolated corner that John Major’s Government left us in.
The Prime Minister has promised to renegotiate the terms of Britain’s membership of the European Union. He said that treaty change will deliver important opportunities to repatriate a series of powers that are apparently held by the EU and which he thinks ought to be back with the United Kingdom. Having looked at the work programme, I confess that I cannot see a major treaty change in preparation. It is far from clear that the treaty change on which the Conservative party is banking is likely to happen soon. If the Minister were to be honest with the House about that, I suspect that he would say that he is starting to realise that the game is up. The Chancellor’s recent plaintive call for treaty change in the context of banking union gave the impression that he knows that the possibility of such treaty change is retreating. Even if we assume that treaty change will happen, we still have absolutely no idea which powers the Conservative party wants to repatriate. The Minister has once again failed to tell us today.
The work programme priorities for 2014—economic and monetary union; smart, sustainable and inclusive growth; justice and security; and external action—are critical to the UK. In particular, a strong and stable economy in Europe is crucial to British jobs, security and prosperity. As the UK continues to battle through the Government’s cost of living crisis, with falling wages, rising prices and stagnating growth, our continued membership of and active engagement in the European Union are crucial to Britain’s economic prosperity. Almost half the UK’s trade and foreign investments come from the European Union. More than 3.5 million jobs in the UK depend on our membership of the EU.
The hon. Gentleman knows perfectly well that the figure of 3 million jobs is a monumental myth. It came out 10 years ago and was denied by the National Institute of Economic and Social Research, which described it as Goebbels propaganda.
The information that I gave was confirmed as recently as 2011 in a written parliamentary answer from the Foreign Secretary. Who am I not to believe the Foreign Secretary on a matter of such importance? If the Foreign Secretary’s view is not good enough for the Chairman of the European Scrutiny Committee, perhaps I could point him towards recent research by the CBI, which estimates that our membership of the EU is worth between £62 billion and £78 billion, which equates to about 4% to 5% of the country’s total economic output or about £3,000 per UK household per year.
I will give way in a moment.
In short, the Prime Minister is willing to take the risk of a £3,000 hit to the living standards of UK households from a British exit from the European Union in order to try to paper over the divisions in his party.
I give way to the hon. Gentleman. Perhaps he will tell us whether he was one of the 95 who signed the recent letter.
I was proud to be one of the 95. I might mention that if I catch your eye later, Madam Deputy Speaker.
The hon. Gentleman has quoted a figure for the contribution to the economy of our membership of the European Union. What is the counterbalance to that figure? What do we pay through extra regulation and our subscription to the European Union, and does that leave us with a credit or a debit?
The hon. Gentleman might like to go into a bit more detail with the CBI about its calculations. It appears from the detail of its work that it has weighed up the benefits of European Union membership and the “challenges”, as it describes them, such as the cost of regulation.
The hon. Gentleman is absolutely right and perhaps I should have been more enthusiastic about his intervention. It is not just Norway that has a problem. A number of countries find themselves outside the EU with very little influence on what EU regulations are approved, and they often still have to accept 75% to 90% of them
I am not the hon. Gentleman’s hon. Friend, but I am nevertheless happy to give way to him in the hope that one day he might want to join us and become my hon. Friend.
I always regard the hon. Gentleman as my friend. Does he not agree that Norway does two and a half times more trade per capita with the EU from outside than we do from within, and that Switzerland does four and a half times more trade per capita from outside the EU than we manage from within? It is, therefore, perfectly possible to trade more freely with Europe from outside the EU than it is from within.
It is interesting that a series of Norwegian politicians have confirmed their lack of influence over EU regulation, and have pointedly suggested that we do not go down the route—I know the hon. Gentleman is an enthusiastic supporter of this route—of denying ourselves the opportunity to have influence over the detail of the single market.
My hon. Friend paints a pessimistic picture of the Conservative party becoming increasingly Eurosceptic, but does he take heart from the strong rumour going around Brussels that the Conservative party might be reconsidering its decision to leave the European People’s party group and might apply to join it once again?
It is not for me to comment on the Conservative party’s membership, or not, of the EPP. We will no doubt hear more if there is any truth in the rumour.
The Commission’s work programme quite rightly cites deepening the single market as a key priority. It is the biggest such market in the world: a consumer market of 500 million people that generates £11 trillion in economic activity. It remains a deep concern of many in business that the Conservative party is willing to put at risk Britain’s membership of such a huge market for British goods and services. The Prime Minister also appears to be willing to risk our participation in bilateral free trade agreements, not least the hugely important potential EU-US trade agreement.
We on this side of the House recognise that to help Britain compete in the global market and uphold British living standards, the UK needs to advance, together with others in Europe, a reform agenda that promotes economic growth across the EU and, as a result, helps to tackle unemployment, particularly youth unemployment. That includes, as the work programme sets out, the need to extend and complete the single market—I agree with the Minister’s comments on the digital market—so that British companies can benefit from the opportunities of trade with our nearest allies. The operation of the single market in existing sectors must be protected in the face of potential closer integration between eurozone states.
The work programme outlines the continuing work of the Commission on economic governance and the banking union. Clearly, the stability of the eurozone, and sorting out the problems faced by banks in eurozone countries, is not just of great importance to countries in the single currency—it has a significant impact on the UK, too. Why it takes the European Union to clamp down on bankers’ bonuses, when the Government should be doing it, is a question we are still waiting to get a sensible answer on from Ministers. In this country, we still need real reform of competition in our banking sector to help small businesses get the support they need to grow, employ more people at decent wages and help Britain earn its way to better living standards.
Another important theme of the work programme is European co-operation on justice and security. The Commission is currently negotiating with the UK on the justice and security measures that we can opt back into. Our police and security forces are rightly working ever closer with their counterparts across Europe, co-operating on issues such as international terrorism, organised crime and human trafficking. For example, we would not have seen the arrest of one of the terrorists responsible for the 7/7 attacks in London without help from our European colleagues. More than 4,000 suspected criminals have been sent back to other EU countries to face justice, more than 90% of whom were foreign citizens, and while not perfect, the European arrest warrant has helped to tackle the so-called Costa del Crime, with 49 of the 65 top UK fugitives hiding in southern Spain having been returned to face justice. In short, we depend on our European partners for intelligence and operational support in order to protect the British public and the freedoms they enjoy. To ensure that those goals continue to be realised, the Opposition want to see the EU’s collective effectiveness further improved.
As I mentioned, the Government have triggered the justice and home affairs opt-out. Indeed, the Home Secretary and the Justice Secretary told the House that the block opt-out was first and foremost about bringing powers back home, yet the European Scrutiny Committee, chaired by Mr Cash, having reviewed the significance of the justice and home affairs opt-out, said:
“we see little evidence of a genuine and significant repatriation of powers.”
Whom should the House believe when making that judgment—our European Scrutiny Committee or the Home Secretary?
It was one of a series of sensible reforms that the Labour party negotiated when in power. It was right that we had that judgment to make. It is clear from the work of the European Scrutiny Committee, however, that the list of measures the Government want to opt back into will not deliver what the Home Secretary and Justice Secretary claim it will—a significant repatriation of powers—or at least that appears to be the case, on the basis of the Committee’s conclusions.
It might help the House to reach our own judgment were the Government to update us on the negotiations with the European Commission on the measures they want to opt back into. For example, can the Minister reassure the House that the European arrest warrant will not be put at risk this year? If Ministers’ rhetoric is taken at face value, there remains a threat to continued British participation in European co-operation on cross-border police investigations, while UK involvement in criminal record sharing, work on trafficking and online child pornography, as well as deportation arrangements for suspected criminals, are all at risk too as a result of the opt-out. Such measures provide a vital legal process to prevent people from fleeing justice and to ensure that those responsible for crimes are held accountable.
Finally, on the tobacco products directive, the House might recall that Labour MEPs voted in favour of a range of proposals aimed at protecting children from being targeted by tobacco companies, including graphic warnings on packaging, the banning of chocolate and strawberry-flavoured cigarettes and a future ban on menthol cigarettes. Ignoring warnings from Cancer Research UK, the British Heart Foundation and even the advice of their own Health Secretary, Conservative MEPs voted to weaken cigarette warnings, for weaker regulation of electronic cigarettes and to delay the ban on menthols, and blocked a ban on slim cigarettes, which I understand are particularly targeted at young women. Will the Minister tell us how those negotiations are progressing?
In general terms, the Opposition support the work programme, but 2014 will be remembered less for this programme and more, I suspect, for how the Prime Minister’s continued weakness in front of right-wing Back Benchers threatened our influence across the European Union.
It is important that the House considers the European Commission’s work programme, as we have done before.
The Greek presidency has the potential to make a major difference to the EU at this critical time, and we should have every hope that it will attempt to make those changes, bearing in mind the recent history of the Greek Government. Greece is arguably one of the greatest victims of the bungled “integration at any price” agenda of those behind the European project and should be well placed to showcase the dangers of recent approaches. This was an opportunity for European integration to change course, but the message from the programme of the Greek presidency is that that process of political integration and state building continues apace regardless. This document and agenda do little to address the very real concerns of ordinary voters across the EU and convey that detached superiority of a complacent unaccountable elite. At a time when Europe teeters on the brink, this work programme presents an agenda for ever-more integration, justified in language that would cause even the most cynical to take note.
We are promised that the Greek presidency will
“reverse the current trend of youth unemployment” as part of the effort on economic growth and job creation, but it seems that the main output is to
“enhance the implementation of the Compact for Growth and Jobs”,
whose relevance is worthy, to say the least, of deep scrutiny. If we want to reverse the trend of youth unemployment as well as put right many of the wider ailments of the European economy, we need to revisit the entire economic model on which the European project is based. Instead of a burdensome, overbearing single market driven by a social model that is neither desirable nor affordable, we need a much lighter, more flexible and trade-focused agenda for wealth creation and prosperity.
That is not, however, the priority of the Commission. Instead, we are promised a further push on the integration of the EU and the eurozone. The work programme undertakes to push hard on banking union, and promises to
“create a well coordinated Economic and Monetary Union with a view to ending the instability and uncertainty observed in particular in the ‘periphery’.”
Are they talking about the fastest-growing economy in the world when they talk about the periphery? One wonders whether that is how they see Britain.
Perhaps of the greatest concern is that we are promised
“a particular focus on the social dimension” of European monetary union,
“which, for the first time, will be integrated into the European Semester cycle”.
My hon. Friend refers to banking union. For the last two and a half days, I have attended a conference in Brussels, in which it was explicitly said, over and over again, that it was crucial to get the banking union proposals through. They pleaded with national Governments to get those proposals through before the European elections, because they fear that if they do not get them through before then, they will never get them through.
My hon. Friend is, of course, right. We know that banking union was proposed as a last-ditch effort to give some confidence to the market, but I doubt whether these are the key economic promises for businesses across the EU—that is the truth of the matter. They are a long way from where voters would like the political emphasis to be placed—especially, if I may say so, in this country.
It is difficult to reconcile these priorities with the economic realities, particularly within the eurozone. As we emerge tentatively from recession, alongside the United States, the eurozone continues to face a crisis of existential proportions. The promising picture in Ireland and Spain, as well as improved confidence, is more than offset by the risk of a widespread deflationary spiral and the worrying travails of the French economy, which, being socialist-driven, frightens most of the people in most of the countries across Europe.
Does my hon. Friend agree that there is almost nothing in the Commission work programme that seems to correspond with this Government’s stated priority of trying to change and reform the EU fundamentally to our advantage?
Tragically, this particular report makes the Government’s task even more difficult. These are real problems that need to be dealt with very quickly.
The levers of monetary policy within the single currency have been almost completely exhausted: with interest rates at just 0.25%, it seems that the Commission’s only response is a further push for integration. It is as though it were blinkered like a racehorse. It is aiming in only one direction which everyone believes will lead to failure, but its duty is to ensure that jobs for the boys in the European Commission continue to be its prime objective. That problem is caused by the fact that—as we all know—the European Parliament has so little control. The answer is not to give it greater control, but to ensure that control is sent back to sovereign Parliaments where democracy is alive and well, and, I am delighted to say, living in Westminster. At least, I hope that that is what the Government will try to prove.
The proposals for banking union are chaotic, underfunded and unnecessarily complex. How can a single banking union operate in the context of national vetoes? We do not know the answer. Why is there still no agreement on responsibility for the collective costs? We do not know the answer to that either. If the banking union proposals lack credibility, they will not enhance the prospects for growth and prosperity; indeed, they will do the reverse. These proposals were made on the edge of desperation, in an attempt to give some stability to a market that clearly did not believe in a European currency.
We need a different relationship with the European Union as never before, and we need it more urgently than ever before. I call on the Government and the Minister to ensure that we start talking very soon about the red lines of negotiation. That does not mean talking about the details of renegotiation, but it does mean talking about the overall areas in which we need to renegotiate. Sadly, the Government have been immensely silent about that, and I fear that unless they start talking about it before the European elections, it could well rebound on us.
I appeal to the Minister to ensure that we have a proper discussion, so that we can present to the British people a vision of genuine negotiation on issues that genuinely matter to them. That may well enable this Parliament to do one of the greatest services that it has ever done to this country.
This debate matters to all our constituents, given the significance of the issues involved in the work programme. Those issues affect our economy because our largest single export market is in the rest of the European Union, and because of the priority attached to completing the single market—particularly in relation to energy and telecommunications—promoting greater access to justice, and redoubling the European Union’s efforts to offer hope and jobs to the millions of young people across the EU who are without work.
At a time when events remain very precariously balanced in Ukraine, we should also reflect on the Commission’s continuing role in overseeing the EU’s enlargement strategy. Negotiations with Serbia began this week, and association agreements with third countries are still being negotiated. The EU’s neighbourhood policy remains a great force for good in the world.
The Minister and other Government Members spoke of the risk of the United Kingdom’s being left behind, but today in The Guardian the head of Unilever spoke of the risk of its being left out altogether. We increasingly hear the voice of business in strong support of the UK’s remaining in the EU in order to enjoy the benefits that it brings to business and workers in this country.
Is my hon. Friend aware that BASF and Monsanto have already removed their research facilities from this country and from Europe because of European regulation relating to genetically modified foods, and that the REACH regulations—the EU regulations on the registration, evaluation and authorisation of chemicals—are in the process of destroying heavy industry in the north-west of England? This is a complicated issue, and my hon. Friend should be presenting a more balanced argument.
I am grateful for that intervention, but I remember that major employers such as Hitachi established themselves in the north of England precisely because we are in the EU and have access to the single market as a result. Many investors have said that if we were no longer part of the single market, many jobs in this country would be put at risk. I simply ask my hon. Friend to reflect on that point.
If the hon. Gentleman were to read not only The Guardian but also The Daily Telegraph today, he would see references to what the chairman of Unilever said. His comments were much more in line with the arguments made from the Government Benches because he was saying that reform was needed and that far more concern was being expressed about that reform than was necessary.
I am conscious that other Members wish to speak and I do not want to do a survey of all of today’s British newspapers, but I simply say to the hon. Gentleman that the main story on the front page of the Financial Times this morning was headlined “City warns UK over loss of EU influence”, so I think we are hearing precisely the voices of business, who want to promote job creation and who are expressing the view that isolating ourselves in the way that the Government are trying to do, in a vain attempt to placate the hon. Gentleman, is simply not going to work in our long-term interests.
There are several points I want to develop in the remainder of my remarks. First, on economic and monetary union, yesterday the International Monetary Fund’s world economic outlook predicted growth in the eurozone for this year at a mere 1% and for next year at an only slightly higher 1.4%. At the same time, there are 26.5 million people out of work across the EU28, and 5.6 million of them are under the age of 25. That is a youth unemployment rate of nearly 24%. That should shame all of us. It should represent a call to action for every politician who has influence to shape the EU’s priorities to focus on job creation for the next few years.
Over the year to last November our trade deficit with the EU rose to £3.2 billion and the continued low growth in the eurozone area was one of the main contributory factors to dampened demand for our manufacturing exports. By contrast, our trade in services, including financial services, is in surplus. So it is in the interests of business and workers here in the UK to see the fault-lines in economic and monetary union repaired by putting in place a strong set of common institutions like a single resolution mechanism and processes to allow for the resolution of distressed banks in the eurozone area. The question of whether there should be a common deposit insurance guarantee, or commonly issued debt, is certainly a more divisive issue among the eurozone members, but now that a new coalition is in place in Berlin, we should at least begin to have greater certainty about Germany’s intentions on both those fronts.
We should also welcome the fact that, contrary to many expectations—not least from Members on the Opposition Benches—the eurozone has not broken up. Indeed, Latvia became its 18th member this month. Nevertheless, in this work programme the Commission has acted on the widespread sense among peoples in Spain, Portugal, Greece, Cyprus and Ireland that monetary union lacked a sufficiently social or democratic dimension, with little regard being given to the effects on inequality, wages and, most devastatingly of all, youth unemployment in some of the programmes imposed upon those member states in the name of deficit reduction. It is interesting to note that the Commission’s work programme refers to the further priority for work in this area in the coming 12 months.
As Commissioner Andor’s report today makes clear—this certainly was covered in The Daily Telegraph, to which Mr Cash referred earlier—eurozone members should not be left with the only options being internal devaluations or wage cuts as the means of escape from any future downturns. The price for that would simply be paid by ordinary working people with substantially lower living standards. A eurozone with a strong fiscal union component will help to avoid that possibility in the future.
When Government Members visited Brussels in October last year we heard from the office of President Van Rompuy that eurozone member states now recognise that sharing a currency and a common interest rate was not enough to avoid the effects produced by the economic shock of the great recession. So plans are now being developed to establish limited pooled resources that could help share out or equalise economic demand when some states suffer a severe dent in their output. We should welcome that. It has also been proposed that a revision of some of the terms of the fiscal pact could allow eurozone states greater flexibility to boost demand through fiscal policy in times of economic trouble. We should also welcome those proposals.
In common with weak lending to small and medium enterprises in this country, the Commission should also focus in much greater depth on how the European Investment Bank should increase lending to businesses in the coming months, so that Europe’s growth rate can be expanded. In that sense, there are real parallels between the debate on the flaws of monetary union in the eurozone and the debate that will take place in my constituency and the 58 other constituencies in Scotland on the future of the economic, political and fiscal union that is the United Kingdom, which will have its resolution this September. There is a strong recognition that a properly functioning currency union requires both fiscal and political union too.
Secondly, on markets for trade and future growth, the work programme refers to the potential for a second Single European Act to complete the free movement of goods and services in areas such as energy and telecommunications. This is vital so that the EU can establish a proper digital single market.
It is wonderful to hear a Labour Member advocating the benefits of free trade. Does he agree that the whole world should be a single market, and will he therefore join me in lamenting the existence of so many barriers to free trade across the EU customs union?
That is a very interesting intervention. The main issue is what influence we can have over the shaping of the rules. As people in Norway and Switzerland have discovered, the only way to have influence is to be in the organisation. Those who are not full members cannot expect a full say.
That would be all very well if we did not look at the actual voting strength that the European Union has as a bloc. How can we best maximise our influence in the WTO? It is by pooling our sovereignty and having that greater voting strength. That is what gives us the best chance of seeing the free trade agreements that will benefit businesses and employees in this country.
The EU also has to look at the nature of the growth that is being generated in our economy. It has to invest more in science and innovation—look at countries such as South Korea that have done that over an extended period. It must focus on skills, to increase employment and as a driver of future wage growth.
Thirdly, on justice and security co-operation, recent tragedies in the Mediterranean have shown the strong need for deeper joint working to prevent accidents and fatalities at sea, and to target would-be people traffickers. It is perplexing that when the rest of the EU is seeking ever closer co-operation on enforcing common standards, the UK is moving in the opposite direction, with its blanket opt-out and opaque, limited opt-in to the justice and home affairs area.
Fourthly, on the EU’s external strategy, it is worth noting that the queue of countries seeking to apply to join the European Union is far longer than that seeking or contemplating the possibility of exit from it. That must count for something, and the reasons are clear—unimpeded access to the single market, a rules-based system governed by the rule of law, and an influence in shaping common provisions. States such as Serbia, Turkey and Moldova recognise the greater influence in the world that the EU’s common foreign policy provides, the additional strength when negotiating trade rules at the WTO, and the sense that they can have another identity without ceding their own national identity. That same motivation has driven millions of people in Ukraine to urge their Government to sign the association agreement with the EU, which would do a great deal to boost that country’s economy.
The tragedy is that this Government are distracted from playing the fullest possible role in achieving these goals by their futile attempt to appease their own Back Benchers, who will not be content until the destinies of the United Kingdom and the European Union are on separate paths. For the sake of the future of 3.5 million jobs in our country, of our future prosperity and of our sense of who we are in the world, the Government should understand a little less, and condemn a little more, those whose policy for a British exit would diminish our imprint on the world, not increase it.
Order. There are 27 minutes to go, and four people are seeking to catch my eye. Normally, we would also allow the Minister to wind up the debate. I therefore appeal to colleagues to help me to help them.
Having listened to what Mr Bain has just said, I think he really needs to take into account the fact that we have a Queen’s Speech every year at about the time the work programme comes out. That Queen’s Speech is put forward on behalf of an elected Government; it contains Government proposals that come from a democratic process. We are discussing a work programme that comes from an unelected bureaucratic organisation that lays out its priorities and expects people to respond to them. There is a serious difference in character between the two. Many of the proposals in the work programme—some of which are not legislative proposals but initiatives—are brought into effect by regulation or directive.
The proposals in the Queen’s Speech, being democratically driven and debated in the House, are brought into effect by Bills of Parliament. Those Bills have Second Readings, they are amended and they have a Report stage. They go through both Houses of Parliament. However, a single paragraph in a regulation or directive could have the most profound effect on us in this country. The provision would almost certainly be driven through by a qualified majority vote. That could involve our being pushed into a consensus or being outvoted; it could also involve a co-decision with the European Parliament. We have less and less control over what goes on.
The Commission programme is, as a matter of principle, based on undemocratic systems. That is why the European Scrutiny Committee report, which has received quite a lot of attention recently, has put forward proposals relating to those provisions that could, in the national interest, be considered for disapplication or—in the case of the proposals that we do not want—subjected to a veto.
In regard to the Minister’s opening remarks, I should point out that the Government are resolutely against several provisions in the work programme, including those relating to the European public prosecutor’s office, and to the single resolution mechanism, in which we will not participate. That Government also oppose the provisions on free movement rights, to which they will not subscribe, and to those relating to the European anti-fraud office. All those matters will still be produced by the work programme, however, and we will be unable to prevent them from happening. The hon. Member for Glasgow North East is perfectly entitled to say that he would like to have the single resolution mechanism—in fact, I recall him saying that he thought we should have it. However, I can assure him that that is not the view in the City of London, and it is not the view of many people who have a great deal of knowledge of these matters.
A serious constitutional question lies in the difference between the Commission work programme and legislation that originates in this House, based on manifestos. The work programme is completely different in character and consequence for the voters we represent, in a way that is profoundly undemocratic. That is point No. 1. As Chairman of the European Scrutiny Committee, I know that our job is to look at all these matters—and point No. 2 is that we do. We do that diligently throughout the year. Let us leave aside the disapplication and veto matters to which I have just referred. When I was in Brussels yesterday, I was told by very senior members of other national assemblies, “We would give our intense support to anything that would enable us in our own countries to have flexibility to prevent the imposition of legislation on banking union and so on.” Their list is endless, but they just cannot do it because of the way their constitutions are tied in. Our report recommends that the departmental Select Committees could be brought in to make assessments—
I am glad to see the Minister nodding, because we believe our constructive suggestion will help to make more sense of the proposals in this work programme. Not only would each Select Committee have a rapporteur who is a specialist in European matters, if that were agreed by the House, the Procedure Committee, the Liaison Committee and so on, but the generality of departmental Select Committees would consider whether they wanted to prioritise proposals that came out of the work programme and make their own political judgment on whether they thought it was in the interests of the United Kingdom to go along with those proposals. They might even absorb some of the ideas and say they were good. The bottom line is that there should be a proper democratic discussion about it all, as that would be very helpful.
The Minister has referred to a number of initiatives, but I wish to say one thing about the repeal of legislation. This relates to actions under the regulatory fitness and performance—REFIT—programme where we must be realistic. There is far too much of a burden on British business and, indeed, on businesses in the European Union as a whole. I hear that view from all my colleagues in the other national Parliaments when I visit them. I shall be going back to see them in Athens this weekend, having just come back from Brussels. They all say the same thing: they want small businesses to be much more effective; they want more opportunities for entrepreneurship; they want to have more free trade; and they want there to be the opportunity to make money, so that the taxation can be provided for public expenditure. If not, they find that they have terrible problems with their economises.
Finally, we must all be very pleased about today’s employment figures. It is a great tribute to the Government that we have seen this dramatic increase in employment. I just add, however, that a great deal of it comes from our expansion of non-EU trade. We see that in the premium selling points of Jaguar Land Rover and the companies where the money is really being made internationally. We have a deficit on current account transactions, trade and services, and imports and exports—the golden criteria. On that principle, we run a deficit with the other 27 member states of £49 billion a year. We had a surplus in the figures for the last accounts of £12 billion, but the figures for the two quarters for the beginning of the next projected flow are £5.6 billion and £6.1 billion. If that continues, as I think it will, by the end of this year we could find that, in one year, business, with the assistance of the Government—I give them credit for this, because they have been listening—will have doubled our non-EU surplus with the rest of the world. That is where the machinery for more employment and the drive for prosperity for this country will come from, which is why I am so pleased to have the opportunity to congratulate the Government on the figures. At the same time, I issue one small word of caution: we should not put all our eggs in the European basket.
I welcome this debate, but, like the shadow Europe Minister, I think that it would have been more appropriate to hold it some months ago, before the start of the year in which the programme applies. I have read the work programme and the Government’s response, and, like the Government, I agree with much of what is in the work programme. For example, it is difficult for anybody seriously to oppose the assertion at the beginning of the “Commission Work Programme” document:
“Promoting growth and jobs will remain at the heart of the European Commission’s work programme for 2014. These priorities will drive both the Commission’s analysis of the reforms required at national level…and the initiatives proposed at European level to support economic recovery and job creation and tackle social consequences of the crisis.”
That important statement makes it very clear what the Commission’s priorities are. It is also worth noting that the Commission goes on to say:
“But our challenges also go beyond the economy. EU action is needed to protect values and promote citizen’s rights; from consumer protection to labour rights”.
The report then specifically refers to external action, which is particularly important. I want to place it on the record that this House should acknowledge the excellent work being done by the high commissioner, Cathy Ashton. She has done a superb job. She had a difficult time for long periods, but she is now showing how effective she is.
I want to see far more emphasis in the work programme on the EU-US trade agreement. It is of great importance and I want to see more than just a passing reference to it. As far as the Balkans are concerned, reference is made to the agreements that have been struck between Serbia and Kosovo, in which Cathy Ashton has played an important role. It is a great shame that the Commission does not look a little further and make specific reference to the situation in Bosnia, because there we have something of a frozen conflict. There is scope for the international community, and the EU in particular, to make real progress. Realistically, we can look to a time in the not-too-distant future when Serbia will be joining the European Union, behind Croatia. We should also consider the possibility of Bosnia being in a position to make a valid application, but the truth is that we are a long way from that. The western Balkans have a black hole in the middle, which is Bosnia. We should be aware of that and address it.
On the issue of international external action, there is reference to Syria. Given the terrible things that are happening there as we speak, and the fact that there is only a glimmer of hope in Geneva, there should be far more emphasis in the Commission’s work programme on supporting humanitarian efforts and doing whatever is possible to support external measures so that there is not only an improvement in the lives of ordinary people but, we hope, an end to an appalling conflict.
I totally agree with what the hon. Gentleman said about Syria and the need for greater emphasis on humanitarian aid. Does he share my disappointment, and that of many, that while the United Kingdom has been in the lead in terms of humanitarian aid, providing almost half a billion pounds, the material support of many EU member states has been woefully lacking?
Some EU member states have been more generous than others but we must also consider the fact that many have taken in displaced people, whereas the United Kingdom has not yet done that.
The Commission’s work programme places emphasis on the REFIT programme, which should be welcomed, but we must be realistic and recognise the modest series of references in the programme. I want a far bigger emphasis in the work programme on subsidiarity, which I do not think is mentioned as a term. That should be part of our agenda for the European Union’s development in the future. For example, I want us to reopen the debate on the future of EU regional policy, whether the member states should be more involved and whether repatriation should happen. There is also scope for us to reopen the debate on the future free movement of people, especially given the domestic debate. Unfortunately, those issues are not touched on in the work programme.
Those are some ambitions but others relate to the development of the single European market. The programme acknowledges that the internal market in services and the digital economy needs to be developed, but there is no reference to the need to develop an internal market in energy. Although there are good things in the European Commission’s work programme, it does not reflect the priorities that the Government claim, which shows the diminishing influence—in my view, because of the internal politics of the Conservative party—of the British Government on the EU agenda. As we have heard today, the Conservative party is becoming more and more Eurosceptic and as a consequence it is losing allies and supporters in the EU and is less able to negotiate things that are in our national interest. That is the reality.
Linked to that, we are also seeing a diminution of British influence on the ground in the EU institutions. My hon. Friend Mr Bain referred earlier to a story, which I hope all Members will read, on the front page of the Financial Times, headlined, “City warns UK over loss of EU influence”. One point made by people in the City is that that diminishing influence is resulting in fewer Britons working inside the European Union institutions in Brussels: the British Bankers Association says that there has been a 24% decline over the past seven years. At the moment, Britain accounts for 4.6% of the total number of people employed in the institutions whereas France can claim 9.7% of them. In simple terms, that means that we have fewer people on the ground making the case for Britain’s national interest. That is bad for us.
That is a very disappointing and narrow comment. We are looking at opportunities for British people to work abroad and make a real contribution to Britain’s agenda inside the EU. That is in our national interest and the hon. Gentleman ought to recognise that.
Indeed, but they need to have time to make their speeches as well. I am just gently hinting.
I just want to confirm what my hon. Friend Wayne David is saying. The Select Committee on Foreign Affairs produced a unanimous cross-party report on the issue he is talking about and the Government, in their response, recognised that there is a serious problem. Although some are clearly pleased that British people are not getting jobs in international institutions, that is clearly not the position of the Government or the Foreign Affairs Committee.
I thank my hon. Friend for his intervention. It is nice that there are some people who are enlightened.
To conclude, the report in the Financial Times observed that it is in Britain’s national interest to be fully engaged in the European Union. We have seen a reduction of our influence because of the internal machinations and disputes in the Conservative party. We must look carefully at what bankers are saying. Citigroup, for example, is cited in the FT article. I had a meeting yesterday with the Chemical Industries Association, which made it abundantly clear that it is in its members’ interest for Britain to be fully engaged in influencing and changing the agenda in the EU. A similar thing can be said for Unilever, Nissan, Ford, Toyota, the Swift Technology Group and easyJet—the list goes on.
Over the next few months more and more companies are likely to realise that exit from the European Union is a real threat to the interests of the people of this country. That is why it is important that we have an agenda based on reform, not withdrawal; an agenda that is constructive, not destructive; an agenda that reflects the interests and needs of this country, not the wayward drift of the Conservative party.
I shall try to be at least as economical as Wayne David.
On that theme, 90 minutes to debate the European equivalent of the Queen’s Speech, long after the event—the beginning of the work programme—is not adequate. Government business managers need to consider more effective scrutiny of the work programme in future. I would have liked more time to discuss the Commission’s interesting proposals to promote jobs and sustainable growth across Europe, including: the completion of the single market and important sectors such as digital services, which I am sure Conservative Members would agree with; the ambitious trade negotiation process; and—my personal favourite—the fourth rail package, to try to bring the stiff breeze of competition to our own rail industry, apart from anyone else, and to try to reduce some of our notoriously high rail costs.
I would have liked more time to look at the Commission’s programme on cross-border crime, including the attack on money laundering; at the Commission’s environmental measures, including the 2030 framework, bringing aviation into the emissions trading scheme, and a safe and secure framework for fracking; and at efforts to promote both the reduction of waste and resource efficiency in the European economy. I would have liked more time to look at consumer rights and the benefits to consumers across Europe of increased competition. I would have liked more time to discuss external action, including important action against piracy and to promote peace in the western Balkans and elsewhere.
I am disappointed that Members such as Mr Binley could find absolutely nothing good to say about the work programme, which is regrettable, but I do not want to fall into the opposite trap of saying that everything that comes out of the European Union is good. At the risk of my future career with the Liberal Democrats, I agree on a limited basis with the hon. Members for Clacton (Mr Carswell) and for Stone (Mr Cash), as there are examples of regulations that are a burden to business. A business in my constituency, Premiere Products, has pointed to the impact of the biocidal products regulation—a brand new regulation that should have been there to facilitate access to markets across Europe for small and medium-sized enterprises, increase competition and reduce authorisation costs, but seems likely to do the exact opposite. I say to Ministers that the biocidal products regulation is a prime candidate for inclusion in REFIT, as we must consider whether we can do more to lighten the burden of regulation, especially on small businesses.
The Commission’s programme is a fascinating and important one. The modest motion before us asks only that we take note of the document and regard it as “a useful tool” for looking at that programme, so I am happy to support it.
I had better make this my application to appear on “Just a Minute”, which is one of my remaining ambitions, Mr Speaker.
We have heard in this debate, over 90 minutes, the whole programme of the European Union for a year. I am in entire agreement with my hon. Friend Martin Horwood for once. We spend four days on the Queen’s speech. We have 90 minutes on this. What do we have in it? We have a directive on network and information security, to which the Government are opposed, but on which they can be outvoted; a regulation on data protection, ditto; a regulation establishing a public prosecutor, ditto; a directive establishing a financial transaction tax, ditto; a 2030 framework for climate and energy policies, just at the time when people are realising that they want cheap energy, not more environmental regulation. We have, fantastically, regulations on European political parties coming through from the European Union, so perhaps they will limit what we can say in future and will not give us any money for it, because the European Union is taking charge. We have, just as the wonderful Romanians and Bulgarians have come in to free movement, a labour mobility package, to which even the Government are opposed, because they do not believe the scope of EU rules should be extended to cover long-term care, they are worried about unemployment benefits, etc., etc.
It is all going our way. It is absolutely amazing. I am so pleased. I speak as one of those dumb oxes, who put his hoofprint on a letter to the Prime Minister. The letter went in and those very clever people in the Foreign Office did not like it, because they said it was going their way; that they are pleased to tell us that hairdressers will be allowed to wear high heels when cutting our hair. There is rejoicing in all the barber shops across London at this news being relayed to us. They have given away so much. They lose so much, yet it is going their way only in their own minds. We are seeing in this programme 37 new laws that are coming into effect over the course of this year. We are in the process of a federal state being created. We ought to oppose it. If we oppose it rigorously, things really will go our way, and the dumb oxes will finally have their success.
Division number 190
Question accordingly agreed to.
That this House takes note of European Union Document No. 15521/13 and Addendum, a Commission Communication: Commission Work Programme 2014; agrees that this document is a useful tool for planning the Government’s and Parliament’s engagement with the EU in 2014; and supports the Government’s view that measures which promote growth and jobs in the EU, including measures towards completing the Single Market, are the top priority.