European Union (Amendment) Bill

Part of the debate – in the House of Lords at 5:15 pm on 12th May 2008.

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Photo of Lord Hunt of Wirral Lord Hunt of Wirral Conservative 5:15 pm, 12th May 2008

I thought that it might be helpful to the Committee if, instead of moving a range of separate amendments all dealing with some aspects of the economic issues to which the Bill gives rise, I brought my 10 amendments together and spoke to them in the same group. I hope that that will be useful. In my zeal to do so, however, I should point out that the group includes Amendment No. 80, which unfortunately it should not, so I shall not speak to it. If other noble Lords agree, I will endeavour to do so later.

Amendments Nos. 29A and 29B are not wrecking amendments but follow very closely the arguments that were pursued in the other place, in particular those of Philip Hammond and Vince Cable on the alteration of the wording on competition. Amendment No. 32A deals with the internal market. We have the benefit of a European Union Select Committee report, The Single Market: Wallflower or Dancing Partner?, to which I shall refer in a moment. Amendment No. 39 deals with customs co-operation; Amendments Nos. 62 to 64 deal with state aid, competition and warnings on economic policy; Amendment No. 71 deals with common commercial policy; Amendment No. 72 deals with intellectual property and foreign direct investment; and Amendment No. 163 refers back to Amendments Nos. 29A and 29B.

I recall that, back in 2000, the Lisbon strategy set out its aim of making the European Union,

"the most dynamic and competitive knowledge-based economy in the world ... by 2010", so it is a good moment to work out where we are today and what this treaty will do in taking us to that goal. I regret to say that, as we look across the European Union today, we find a shaky, diverse economy. The nation states in the eurozone, which are forced to have the same interest rates, are suffering to varying degrees from that situation. The Minister may seek to persuade us otherwise, but an immediate case cannot be evolved for the management of the economy to move to Brussels. Certainly so far as the treaty is concerned, there are signs that the nations that agreed to the treaty have decided to move in that direction.

What do I mean? I am talking about free trade and open markets. I have always regarded those markets as crucial to creating an outward-looking Europe that can compete on the global economic world stage. It is sad that, in the treaty, there is so little about the single market and helping us to achieve those open markets. There is plenty in the treaty about EU values, but nothing about what was, after all, a founding principle of the European Union.

In evidence to the European Union Select Committee, John Hutton admitted in his written submission on 17 December last year:

"The Reform Treaty does not change arrangements for the internal market in any significant way".

Let us ask the Government why, at such a crucial moment, there is no significant change. There was one significant change, which is known as the Sarkozy clause. The one good thing in the treaty—the clause allowing free and undistorted competition—was struck out as a result of Monsieur Sarkozy's intervention. After his success, he commented:

"Competition is now just a means, not an end in itself. This opens the way to a different jurisprudence, one that favours European champions and brings a true industrial policy".

He said:

"We have obtained a major reorientation of the objectives of the Union".

He went on:

"Competition is no longer an EU objective or an end in itself ... The word 'protection' is no longer taboo".

I hope that the Minister will explain why the Government agreed to that deletion. Peter Mandelson has already responded in strong terms. He said:

"Competition is how we keep our markets efficient and dynamic; keep prices low for the consumers and maintain innovation. Competition is a source of creativity. Without it, our economies would stagnate".

I agree with Mr Mandelson, but why don't the Government?

Why are the objectives of full employment and social progress now going to have a higher legal status under European law than free competition? What has caused the Government to agree to this move? We need to know. I recall Commissioner Mario Monti, seen as one of the great prophets of competition, responding:

"If this goes through, it's the first step towards disintegration".

He continued:

"I am deeply surprised that the British are allowing this to happen".

Well, so I am and I think that the Minister has to give us an explanation.

I read in the press at the time that our Prime Minister, Gordon Brown, had "hit the roof" when he heard about the concession on the Sarkozy clause. The Sunday Times said that the Prime Minister "went ballistic" when he heard. From the plethora of memoirs at the moment, we are led to believe that that is a frequent occurrence. However, I am particularly concerned about this instance. If the Minister is going to tell us that very little has changed, why did the Prime Minister go ballistic?

There is so much else that I could deal with, but I want to try to conclude my remarks. However, I will say that, on this occasion, I am looking for support from my noble friend Lord Dykes, as much of what I have said was echoed in the other place by Vince Cable, who said that,

"the concession made by the British Government ... is rather damaging ... the concession represents a step backwards in political terms, and that is why we have tabled some amendments to ensure that that aspect of the treaty is monitored as it proceeds".

Sadly, his colleagues in this House did not table amendments. However, I have and these are those amendments. Vince Cable continued:

"There was a retreat from the commitment in the treaty from an undistorted internal market".—[Hansard, Commons, 6/2/08; cols. 1003-08.]

I look forward to hearing whether my noble friend Lord Dykes will support Vince Cable's amendment. I am particularly attracted by Amendment No. 29B, which is not a wrecking amendment but merely states that the Secretary of State shall lay,

"before each House of Parliament a report setting out the arrangements under the Treaty for securing an open market economy and requiring free and undistorted competition throughout the European Union".

What could be less wrecking than that? All it requires is for the Government to focus on what they have done—or is it what they have not done? Perhaps they should have focused a little bit more on the effect of what has happened in the treaty.

The protocol, no doubt the Minister will say, should do much to reassure us. However, there has already been extensive debate in this House about the difference between what is in the protocol and what is in the treaty. I am concerned about the changes that have taken place. I hope that the Minister will explain why she supports them.

We also have the report of our European Union Committee on the single market. Much of what it says is very worrying. On page 19, paragraph 59 states:

"We believe that the Single Market has great potential to deliver benefits to consumers and businesses, and yet, despite its impressive record, its future appears at risk. We are concerned that the momentum behind the Single Market has been weakened. We therefore call on the Government and the Commission to instil a sense of urgency into the review of the Single Market".

On page 20, paragraph 71 continues:

"The Minister for Europe assured the Committee that the removal of the words free and undistorted competition from the text of the Reform Treaty had not led, and would not lead, to a change in policy ... We call for a renewed commitment to the importance of competition and the need to complete the Single Market for the benefit of consumers and businesses alike".

We also need to hear from the Government about the effect on customs co-operation, state aid and common commercial policy. How will this affect our ability to continue to secure for our Commonwealth partners their rightful historic concessions? Over the years, these have slowly diminished in their effect, but they are still vital. We need to know what the Government will do under the new provisions to continue to secure them.

On Amendment No. 64, can the Government say who is going to define the warnings on economic policy? Who is going to be the arbiter? Who is going to set the benchmark against which nations will be judged? No doubt the Minister will seek to reassure us on intellectual property and foreign direct investment, too.

I hope that the Minister is happy that I should have brought together so many amendments in one debate. I hope that she will be able to respond to all the questions that I have raised and to all the amendments. I beg to move.