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European Council: 23-24 March 2006

My Lords, a significant number of issues have been raised and there is only a brief moment to reply to them as best I can. I will also do so in English, which I note is the lingua franca of the European Community. The Lisbon process, as the noble Lord, Lord Howell, said, has been subject to a number of rebirths. Some of the ideas involved in liberalising the economies of Europe do not take root instantly—the arguments have to be repeated and people have to be brought to it by a process of persuasion. I have no doubt that we will have to continue with that, although I think that this meeting has helped us a little further along the route. Perhaps I may say to both noble Lords that regulation is an area in which I think we have a reasonable story to tell—one that is not triumphalist. It is certainly true that we have tried to ensure that we have more intelligent regulation. We have urged on the spring Council that by the end of 2006 there should be measurable targets for removing administrative burdens on business. We want to look closely at the scope for doing still more. We want a rolling plan, with simplification, withdrawals and impact assessments. We must be ““thinking small first””, to use the terminology, because we are concerned about thesmaller and medium-sized enterprises starting up. I would just say to noble Lords, if they expect everybody to immediately warm to those themes, that I suspect that those themes, too, will need a good deal of gentle—and sometimes forceful—reiteration before they take full hold. The noble Lord, Lord Howell, talked about economic protectionism. We have seen something of a resurgence of it, which I think is unhelpful. Open, independently regulated markets are more competitive markets. They are the best recipe for sustained economic growth anywhere in the world and for ensuring that the United Kingdom takes its role and benefits from that growth. It will not be a fortress Europe. The reality is that if the walls are kept up, jobs are kept out. We have argued strongly that that cannot happen. On energy, it is bound to be the case that there is a good deal of co-operation at present with the Russian Federation as a major source of energy supplies. Energy security and energy supplies will be the central theme of the next G8 conference. It has to be a thoughtful discussion in which the whole of the European Union is involved. Both noble Lords posed questions on the services directive. In the short time available, I can respond only in a sentence. There has been some movement, although by no means all the movement that we would have desired. But we expect a draft to come out of the next process, which will be a start for further discussions to carry forward the liberalisation of the services area. I am a little relieved that there has been little discussion of the constitutional alternatives. Some may say that that is a limitation. A summit directed towards economics was perhaps inevitable. But these economic issues require very concerted attention. I suspect that another round of what would or would not work in a constitution would not have done the job that was necessary. I have little comment to make on Iran or the Middle East peace process. I know that those issues were discussed in the fringes. However, the focus of the main conference has been the economy, as noble Lords said. The noble Lord, Lord Wallace, raised the issues of the European research council and the European institute of technology. I do not think that we have been disengaged from the Bologna process. As regards the research council, we want to see a European equivalent of the American National Science Foundation. A scientifically led governing council was established last July and is independent of the Commission so that it gains real credibility, adding value by providing scientists with much-needed extra funds for research. On the European institute of technology, when the word ““university”” arises, the temptation is always to gravitate to the question of where the bricks and mortar will be. This will not be about bricks and mortar. It will be about a concerted effort and about building and co-ordinating networks and liaison between business and higher education. That is no small task. It has been tried before, as I know full well. None the less, in my judgment it is a task well worth undertaking. I thank both noble Lords for what they said about Gibraltar. A longer reply is needed than I have time to give now. I undertake to provide it. Finally, I am not hot on triumphalism. However, if some things are going well—and compared with many others our economy is going well; those are the raw facts based on the real data—I do not think that it is bad for us in the UK occasionally to claim a little bit of success where that is entitled.