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European Council

With permission, Mr. Deputy Speaker, I should like to make a statement about the European Council that took place in Brussels last Thursday and Friday. As the House is aware, my right hon. Friend the Prime Minister normally makes the post-Council statement to the House. I have been asked to convey his apologies because he is on an official visit to Australia and New Zealand. The Hampton Court informal summit in October during our presidency set the framework for the spring Council in Brussels. The economic challenges for many, though not all, member states of the Union are severe. Despite significant progress since the Lisbon agenda was launched, there are still about 20 million out of work in the EU. In some states, in contrast to the United Kingdom, unemployment is about 10 per cent. and almost one in five young people are without a job. The British Government know that there is only one way to get Europe back to work and to deliver social justice in a global economy. We base that not on theory but on solid evidence. As my right hon. Friend the Chancellor of Exchequer pointed out in his Budget speech last Wednesday, in 1996 we had the lowest income per head of any of the G7 countries; today, we are second only to the United States. We have grown more quickly, created more jobs and provided more social benefits than most other member states. We have done so by liberalising markets, increasing our competitiveness and investing in the future, including in our public services. The European response to globalisation must emphatically not be a return to old-fashioned protectionism, whether by that or any other name. Specific elements of the Hampton Court agenda were energy, research and development, and universities. The case for a more liberal energy market is overwhelming. Gas and electricity prices in the UK in the period between 1996 and 2004 fell much faster than they had done in EU states as a whole, which have kept their energy markets closed. Consumers in those countries will thus gain from a functioning internal market, but so too will consumers in this country. We currently do not have the access to gas that we would have in a more sensitised market. One of the first achievements of the Lisbon Agenda back in 2003 was the decision to liberalise energy markets by 2007. Last week, the European Council reaffirmed that timetable. Completion of the internal market is one of four elements in a new approach to European energy policy. At the summit, we also agreed the programme relating to the other three areas, which are to intensify diversification of supply, to promote environmental sustainability and, by the next European Council, to develop a strategy for dealing with countries outside the EU. The Council asked the Commission to present a strategic energy review on a regular basis, starting in 2007. On research and development, rising economies, such as China and India, are investing heavily in science and technology. The way for Europe to compete is to be ahead of them and to lead the knowledge economy, rather than protecting old and uncompetitive industries, so the summit agreed the establishment of a European Research Council. That body will be run by scientists and its purpose will be to promote excellence in European research. We expect universities and research communities in Britain to benefit. Linked to research and development is the third area: increased investment in universities, where currently only two of the top 20 universities in the world are European—both, I should say, are in the United Kingdom. The European Union has to produce enough graduates of the right calibre and improve links between business and universities if we are to open up and prosper in new global markets. In addition to the Hampton Court agenda, the British presidency had taken forward valuable work on better regulation and on the services directive. There was further progress on both those areas at the Council. The summit tasked the Commission to report by the end of this year on measurable EU targets for removing administrative burdens on business, particularly small and medium-sized enterprises, and to press ahead with the reforms undertaken during our presidency, including more simplification of existing EU legislation, further withdrawal of unnecessary or outdated legislation, and more effective use of impact assessments. The summit also agreed a way ahead on the services directive. That directive will be of great assistance to British service companies and to opening Europe up properly to a single market in services. The current proposals are not everything that we wanted, but a year ago, some European leaders were declaring the directive dead and buried. It is not and it will represent a significant advance in the process of making Europe globally competitive. It is customary that the spring Council concentrates largely on the economic agenda of the European Union. However, all member states shared a deep concern about the recent elections in Belarus and a declaration relating to those elections is attached to the conclusions. We agreed a statement that condemned the actions of the Belarusian authorities in arresting peaceful demonstrators early in the morning of Friday 24 March. We restated our view, based on the assessment by the Organisation for Security and Co-operation in Europe, that the elections were fundamentally flawed. The European Union is now deciding on the restrictive measures that it will take with respect to the Belarusian authorities. The statement makes it clear that President Lukashenko should not escape responsibility. The European Union applauds those who stood up for democracy against the odds and is determined to support civil society and the Belarusian people. The situation in Belarus stands in stark contrast to the situation in Ukraine. The OSCE said that yesterday’s elections there had"““enabled voters to make informed choices between distinct alternatives and to freely and fairly express their will””" and that they therefore"““further consolidated the breakthrough in the conduct of a democratic election process””." That is a testament to the remarkable progress made in Ukraine since the orange revolution of 2004. Finally, as I am on my feet on European business, the House will wish to be aware that earlier today I issued a written ministerial statement in respect of the successful conclusion of the Gibraltar constitutional reform negotiations on 17 March. The new constitution, which will be put before the people of Gibraltar in a referendum, strengthens the links between Gibraltar and the United Kingdom and thoroughly modernises the relationship between us, which I hope will be as welcome to the people of Gibraltar as it will to the people of the United Kingdom. Last week’s summit was a further step towards a more outward looking European Union that delivers concrete benefits to its citizens. There is still a long way to go. The British Government are in no doubt that Britain’s best interests lie in a European Union that is open to the world, competitive and confident. We will continue to pursue that agenda vigorously.