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My Lords, I declare an interest as I spent a large part of my career in the British public service on European Union affairs and some part of it at the European Commission.
I am extremely grateful to the noble Baroness, Lady Northover, in her role as “super sub”, for her introduction to the debate, given that the statement on the Government’s international position in the gracious Speech is perhaps rather economical with the truth. There is no reference to the Commonwealth, although the Commonwealth is on the rise; there is no reference to the European Union, although it is the foundation of our international relations; and there is no reference to the serious situation in Syria. The only reference is the intention to “support countries in transition”, which perhaps confuses rather than illuminates the actual situation.
It has recently become more difficult to decide on which day in the debate to speak because in reality some elements of international affairs cover not only the European Union but economic, financial and home affairs. However, that is a consequence of our membership of the European Union. I wish to pick out some significant points in relation to EU affairs, notably how best we should carry through the course on which we have set ourselves—most recently in the Bloomberg speech by the Prime Minister and in the considerable amount of referendum speculation that is now all around us. We have to keep up the competition with the other House. The point of my intervention is that we need to examine the potential for agreement with other member states and the extent of existing flexibility in order to maximise potential improvements. What can be wrong with seeking potential improvements in the European Union, and seeking them soon?
I begin by congratulating the Government on their detailed examination, sector by sector, of the balance of competences. We need a solid base of information and adequate consultation of those directly concerned by the balance of competences between the EU and the member states. This exercise is substantial. The latest programme I have seen for the spring and winter shows that departments are working on nine important sectors of policy such as environment and transport, and on some of the most controversial such as asylum and immigration. We need to establish as efficiently as possible what the balance of competences is for future discussion and possible negotiation within the EU. There has been some critical comment that other member states are not participating, but that is hardly surprising because the eurozone member states have important and immediate economic problems on their agenda. It does not change my view that the balance of competences exercise can throw up anomalies and identify unnecessary legislation that some member states in due course may wish to correct.
While looking for improvements, it is important not to exaggerate the impact of the European Union on all our daily lives, although such exaggeration is common. Whole areas of policy such as defence, education, housing and health are only marginally touched by EU action. Further, public opinion in the UK is often more critical of some EU action on smaller issues—“meddling”, to use the word of the anti-EU commentators—and that is fully understandable because there is scope for some cooling off, both of purely national secondary legislation and of some EU-derived secondary legislation. Recent yearly statistics provided by the Library showed that 10,662 pages of secondary legislation went through this House, of which 8.5% was derived from the European Communities Act and 91.5% was our own legislative mountain. The balance is striking and, of course, some EU legislation expires on a regular basis.
I come now to a second element of flexibility within the EU—enhanced co-operation between a limited number of member states. On balance, I think that this is positive, but we need to be very careful to protect our own position. This is what we should be doing in relation to the proposed financial transaction tax, on which the EU Select Committee has urged the Government to consider a legal challenge.
More generally, enhanced co-operation between a number of member states allows those member states to participate but it keeps the initiative in their own hands. Enhanced co-operation derives from the treaties—the treaty of Amsterdam and subject to some change subsequently—but it is clearly not a one-size-fits-all system and is inconsistent with the normal application of legislation to all member states. It sits alongside other actions, such as partial opt-outs of the passport-free area and so on. Since there is frequent criticism in the United Kingdom of EU one-size-fits-all legislation, I take the view that enhanced co-operation could sometimes be of potential value for the UK. Of course, everything depends on the conditions. Those conditions are that it must be a last resort and must not affect the competences, rights, obligations and interests of non-participating member states in particular. However, where it has been, or is likely to be, applied—for example, on patents—it could be of some economic value to us. It would enable an inventor to register a patent once instead of in multiple EU states, and in relation to pharmaceutical patents, which are of considerable economic importance, this would be in London.
We need to make the most of the balance of competences exercise and the potential of enhanced co-operation. We still have before us the decision to be taken by the UK Government on the application to the UK of a large raft of EU law in the area of justice and legal affairs, including the European arrest warrant. If, as I assume, the Government will wish, before the Lisbon treaty deadline next year, to opt out, it would be very helpful to know whether they do or do not believe that it would be desirable to seek to opt in on some individual measures. I think that we need to be clear about what the Government are likely to do on this matter—we are talking about a substantial amount of legislation.
I believe strongly that in the possible run-up to a referendum on the European Union it is very important that the British public have the best information rather than the repeated soundbites attributing all evils to the Union. Of course, the current economic problems in the eurozone are serious for us, as they are for the members themselves, and we should not hide criticism if it is justified. However, I hope that we will not lapse into generalised criticism of the finances of Union institutions and their administration, which has happened. In fact, year after year the Court of Auditors has given an unqualified clean bill of health to the EU’s account-keeping and the Commission’s administrative expenditure. It has continued to do so this year, most specifically in relation to administrative expenditure. The latest report of the Court of Auditors states that in its view revenue and payments were,
“free from material error and that the examined supervisory and control systems were effective”.
I always like to finish my speeches within the advisory time and I also like to finish them on a positive note, so that is what I shall do.