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Internal Market in Services (EUC Report)

My Lords, I begin by congratulating the noble Lord, Lord Woolmer, as chairman of the committee, both on his work in bringing the sub-committee to a consensus and on his clear exposition this morning of the substance of the report. Although I am now a member of the sub-committee and took some part in the preparation of the report, I was not a member in the last Parliament when the evidence was taken, and therefore I did not have the advantage to which various noble Lords have referred of visiting other parts of the European Union and learning something about the reasons for the opposition to the directive, to which the noble Lord, Lord Giddens, suggested we should perhaps have given rather more attention. I am glad to have followed three speakers from the Government Benches who have given such support to the directive and to the report. I am tempted to feel that perhaps the Government should send them as evangelists to their colleagues in some continental parliament—and perhaps even to the European Parliament—where not everyone seems to see things in exactly such an enlightened way. As has been said by almost everyone speaking in the debate, this is one of the major draft directives now before the European Union. The very helpful report that we are considering this morning takes apart and analyses some of the objections to the directive, in particular the country of origin principle, to which a number of noble Lords have already referred. Paragraph 112 and chapter 6 on consumer protection and chapter 7, which examines the risk to the social and economic standards of trans-border competition in services, are important in analysing the objections and pointing out why they are not as substantive as is frequently thought. The robust position of the report is particularly clear in its conclusions and recommendations in chapter 9. From these Benches we warmly support the report and the directive. We are particularly pleased that the draft directive is sometimes known by the name of the Dutch liberal commissioner Frits Bolkestein, who originally put it forward. However, I notice on the website that a ““No to Bolkestein”” campaign exists to try to stop the directive coming into effect. Before turning to the Government’s response, which as has been suggested supports what we have said, I should like to follow the noble Lord, Lord Woolmer, and contrast the consensual support for this directive in this House and what I can only refer to as the disarray in the European Parliament. When the sub-committee last discussed the subject of the report just before the summer Recess, we assumed that the European Parliament’s Internal Market and Consumer Protection Committee would have considered the draft directive last week and that therefore this debate would be able to take place in the light of the changes that had been made by the European Parliament. That was one of the reasons why this date was so convenient for our debate today. Instead, as we heard from the noble Lord, Lord Woolmer, a record number of amendments—either 1,500 or 1,600—were tabled to the draft report of Frau Gebhardt. There was such division between the political groups in the committee that it accepted its chairman’s recommendation to postpone committee consideration until 21 November, with the consequence that the matter will not be considered in the European Parliament in plenary sitting until the second half of January 2006. I rather agree with my Liberal MEP colleague from Finland on the internal market committee of the European Parliament, Anneli Jaatteenmaki, who complained after the decision that,"““this Parliament begins to look like a kindergarten””." The House will know that, in general, I wish to see a strengthening of the role of the European Parliament. But when it is unable to organise its own affairs in such a way that it can give proper consideration to a directive of such importance, it makes me despair. I hope very much that something can be done about it fairly soon. The delay removes any chance of the directive being taken forward to a conclusion under the British presidency, as was suggested in the letter of 30 June from the Secretary of State to the noble Lord, Lord Grenfell. In it, he said that the directive was one of the matters facing the competitiveness council that it was hoped would be able to be taken forward during the presidency. The noble Lord, Lord Haskel, has already said that that is particularly disappointing in view of the Chancellor of the Exchequer’s clarion call in his pamphlet yesterday, which was:"““We must open up the hugely important market for services in Europe””." The main problem, I fear, lies in the attitude taken by the rapporteur from the Socialist Group in the internal market committee, Frau Gebhardt, in that she wants to undermine the fundamental logic of the directive by removing the ““country of origin”” principle. That would be a wrecking amendment. I only hope that the noble Lord, Lord Inglewood, is right, and that it will be possible to find some consensus on something that does not go in that direction. I hope that the Labour Members of this House and of another place, including the Minister, will be able to have useful discussions on the issue with the British Labour MEPs before the appropriate votes take place. The noble Lord, Lord Giddens, referred to the general interest services, as did the noble Lord, Lord Woolmer. The issue needs to be further clarified, particularly on those public services provided using market principles. There we need to look again at the argument, and we look forward very much to hearing what the Minister has to say. As the noble Lord, Lord Giddens, said, the issue is part of the wider debate on the European social model, which we hear so much about and which is defined in different ways in different places. I contrast the consensus on the issue in this country with the debates on it taking place in other countries. On these Benches, we remember that the creation of the welfare state in this country, on the inspiration and writings of Lord Beveridge, was one of the examples of a British social model, which was our dimension of the European social model. I rather agree with the noble Lord, Lord Giddens, that we need not be ashamed of either the Scandinavian or the UK model of the European social model. Instead, we should try to show why they have the advantages of providing appropriate social welfare while enabling an effective market to operate for the good of the prosperity of society as a whole. In the Government’s response to the report, Mr Pearson clearly supports the approach of the committee and the directive. The committee and the Government seem to be very much of one mind. It is therefore particularly regrettable that the European Parliament has delayed consideration of this important measure. I would be grateful if the Minister could say what progress he feels can still be made on the directive during the British presidency and, particularly, whether the Commission intends to bring forward new proposals. Rumours were circulating earlier in the year, following the French referendum and the disputes about Polish plumbers, that the Commission might be thinking again. The House would be interested to hear about that. This is a critical subject, as all noble Lords have said. The report is very useful. I hope that the views the committee expressed can now be taken forward.