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EU Constitutional Treaty

rose to call attention to the future of the treaty establishing a constitution for Europe; and to move for Papers. The noble Lord said: My Lords, I am grateful to those noble Lords who have put their names down to contribute to the debate—it is a distinguished list. The Motion is intended to reopen the debate about the future of the European constitution and the position that our Government will take towards that project. After the treaty establishing the constitution for Europe was rejected by the French and Dutch last year, the European Council meeting in June 2005 agreed to enter a period of pause and reflection. That period is now moving towards an end, with various proposals being put forward on how Europe will advance. The purpose of this debate is to discuss those options and, if possible, draw the Minister and the Government out on their preferred way forward. I remind the House that the treaty establishing the constitution was initially portrayed by the UK Government as a tidying up exercise in response to enlargement. It was clearly seen by others as a much more significant step forward in the European project, as evidenced by those countries’ concern at how to progress without it. In reality, as we have discussed previously in this House, while much of the constitution may have been codifying past treaties, its significance was that it provided the cornerstone of a new legal and institutional order in Europe, which was based on Europe as a legal and political entity in its own right rather than as just a set of co-operative agreements. It contained, for example, a clear declaration that the commission saw itself as an executive arm of that European constitutional entity, responsible under the constitution directly to the citizens of Europe through the European Parliament rather than to the member states, and with a body of EU law that had primacy over national laws. It included a significant extension of so-called ““shared competences””, which covered most areas of domestic policy where the constitution states that national Parliaments could not legislate on any matter where the European Union decided that it had an interest in legislating. It also included a significant extension of competences to override national governments and parliaments on the basis of majority voting. It included the merging of justice, home affairs and foreign security into a single EU structure with the development of an EU foreign minister and embassies. It included the Charter of Fundamental Rights, layering a common legal framework and European Court of Justice competence over vast new areas of social policy and civil rights. As such, it was a critical step in taking forward the European project of ever-closer political union; a project that has only one direction and which is propelled forwards by the momentum of the institutional structure that we have already created. The constitution’s significance is that it is no longer about pooling sovereignty on specific initiatives; it is about establishing a higher sovereignty that has superior rights to legislate and interpret laws across much of our national life. Outside the UK, there has never been a suggestion that it was anything else. For example, Mr Prodi declared at the time that the constitution was,"““a big change from the basic concept of nation states. It’s a change of centuries””." The Belgian Prime Minister, Mr Verhofstadt, set out his view. He stated:"““The conventions draft is quite rightly accorded the title of a constitution. It is more than a treaty, it is the capstone of a federal state””." Having belatedly, although still not fully, acknowledged the significance of the constitution, the UK Government last year promised a referendum before those changes were ratified. I, for one, would have argued that the UK should have said ““no””, as, I believe, the vast majority of the British people would have said ““no””—as did, let us not forget, the French and the Dutch people. But the Government backed away from asking the people to endorse a treaty that the Prime Minster had signed under the cover of this ““pause for reflection””. But the constitution is now back on the agenda. One possibility is that the whole constitution will be revived, possibly with additions to make it even more of a social charter to mollify the French and others. Chancellor Merkel, for example, said last week that Germany would put reviving the constitution at the top of its priorities when it takes over the presidency next year. Describing the ““no”” votes last year as a just a ““setback””, she said:"““I absolutely want this constitutional treaty . . . we need a constitution to have a Europe that has the power to act””." Noble Lords should note that phrase—"““to have a Europe that has the power to act””." And for the Commission, José Barroso has called for a ““political declaration”” on the future of the EU at the summit in May next year as a way of launching,"““a process designed to lead to a future institutional settlement””." But as discussions continue as to whether and how to bring back the whole constitution, and despite the pause for reflection, it is clear that much of the provisions of the constitutional treaty are being carried through anyway by stretching the elastic of the existing treaty base. For example, EU residencies—embassies in all but name—are being set up and staffed around the world, many of them in expensive properties. Under what authority is that being done? The Commission has built the Charter of Fundamental Rights into all new legislation, and the European Court of Justice is making judgements on the basis of a political declaration, despite it never having been approved by the UK Parliament. How can a political declaration, signed by the Prime Minister but never approved by Parliament, be imposed as a new legal framework on UK citizens? As recently as last week, it was suggested that countries should give up their veto on justice and home affairs and move those matters into areas of EU legislation by majority voting—a proposal which the UK Government is reported not to be opposing; although I would welcome hearing a different view from the Minister today. So, one way or the other, the momentum of the European project carries forward—for example, under the guise of Article 308 of the existing treaty establishing the European Community, which gives the European Union power to extend action in areas necessary for the operation of the common market where those actions are not explicitly provided for in the treaty. In practice, this is being used as a gateway to bring through a whole range of new European powers. It seems to me that the operation of the common market is a pretty dubious legal base on which to justify, for example, setting up a European Union fundamental rights agency. Yet, having been denied a referendum on the constitution, this continued movement towards political integration is not something to which the British people have given their consent; nor is it something that I believe is in their interests. The time is coming when we must ask the British Government to declare their hand and we must then give the British people a chance to say yes or no. For there is an alternative which better reflects our nation’s future interests and prosperity. It does not mean turning our backs on Europe but it means opening our eyes and arms to the opportunities in the rest of the globe. Our initial objective in Europe was the opportunity to develop and expand free trade with our neighbours—free movement of goods and capital without barriers and protectionism—and, through trade, to learn to live together better in peace. Over time, even that economic benefit has been offset by the burdens of regulations, social costs and even import quotas that have been imposed on our economy under the mantra of the single market. I believe that those regulations and costs reflect an outdated 20th century European social model—the concept of somehow protecting European Union workers from the need to compete with the world. The truth is that our economic future now lies primarily outside the European Union. With the advent of 21st-century communications and globalised business systems, the world economy is simply no longer divided into isolated geographic blocks. Nor are the old economies of Europe the main source of growth. In the 21st century, countries such as India, China and Russia will be the biggest areas of growth and wealth creation. The European Union may account for about 50 per cent of our trade in goods and services but it is the other 50 per cent that reflects the fastest-growing economies. Britain, which is the fifth largest economy in the world now that China has moved into fourth place, is still, I believe, the third largest trading nation. We are a huge trading nation in our own right. Our need and opportunity is for Britain, with its long heritage of international trade, to take advantage of selling our skills and expertise around the world and to participate in its growth. Indeed, in the Commonwealth, we have a ready-made club of economies sharing a tremendous heritage of law, culture and mutual trust as the basis for a true 21st-century global network. A forward-looking, enlightened British government would surely seize the opportunity to put their passion, idealism and energy towards building this unique network of nations into a huge force for future world trade and development, rather than relegating it to a passing reference in a backward-looking foreign policy fixated on the old order in Europe. Many advocates of European integration continue to argue that, unless we stay fully immersed in Europe, in the single market and indeed in the whole European project, British industry and British employment will lose out. Those arguments, if they ever had any weight, are no longer relevant. We are, and we have the right to remain, in the European Economic Area regardless of the EU treaties, and it is nonsense to suggest that it would be in the interests of other European countries to attempt to disrupt trade with Britain when their exports to us substantially exceed our exports to them. As we have rightly opted to stay outside the euro-zone, the doom and gloom arguments about losing foreign investment by not being part of the core European project have been demonstrably proved false. Just look at the City of London today, which accounts for an ever-increasing proportion of this nation’s wealth creation from international markets. While there may be some benefit in having 9 per cent of the votes in agreeing common standards in Europe, our experience suggests that that is far outweighed by the costs of having to accept a whole raft of regulations that do not suit us without the chance to say no. It is now time to have a sensible discussion about whether our interests are best served by staying inside the single market regulatory obligations, or instead opting for a free trade relationship under EFTA, like the Swiss, where we can make a free choice about what regulations we adopt. For the City of London, for example, it is questionable whether the current process of regulating for a single market in financial services serves our interests, or whether it risks destroying the very flexibility and openness on which London’s tradition as a world financial centre depends. There is a strong argument for allowing the FSA, rather than fighting a rear-guard action for British interests in Brussels, to be set free to define the regulations we want for London’s international competitive position—a move which would bring strong pressure on the rest of Europe to follow our competitive lead. European trade represents less than 10 to 12 per cent of our economy in total, depending on how it is measured, but the regulations and costs it prescribes are imposed on our entire economy. Yet we risk being dragged back, losing our competitiveness, in order to maintain our position inside the European project. If we care about employment and prosperity, we should be focused on aligning our economy with the exciting growth economies of the future, not the outdated economies of the past. With our membership of the EU project, of course, comes our membership of the huge, immoral, bloated agricultural subsidy programme—the subject of the following debate. It is immoral because it places barriers on the way exports from poorer countries seek to earn their way in the world. It destroys their home markets and encourages overproduction, which damages our environment, rather than supporting environmentally friendly farming practices. Neither Switzerland nor Norway, under EFTA and the EEA respectively, have to put up with that. With our commitment to the EU project comes the imposition of a top-down centralist model of laws and governments in place of our ancient, democratic and legal conventions, sweeping away our ancient common-law rights and freedoms under English law, to be replaced by Roman-law rights that exist only where they are granted by the state. We should say to our neighbours, ““You go down the route to political integration if you want to, but we will not join you. We will opt to maintain a free trade relationship with Europe. We seek to engage co-operatively on common programmes across Europe which are in our interests, whether they be on environmental protection, transport policy or security; but we will engage in those programmes on an inter-governmental basis where we retain control, not on the basis of handing over decision-making to an executive able to override our Parliament. We will opt out of all the institutional and legal trappings of the political integration project””. It is wishful thinking to believe that that choice will go away; that the European project will stop in its tracks; that the rest of Europe will convert overnight to an Anglo-Saxon model of economic trade and competitiveness; or that the ECJ will stop advancing its jurisdiction voluntarily. The longer we take to be open with the British people about that choice, the more resentful they will rightly feel. I call upon the Government today to start being open about their intentions and, in closing, ask the Minister for specific responses on three questions. First, will the Government support or oppose Chancellor Merkel and others in her call to press forward with the European constitution? Secondly, will they support or oppose attempts to bring in many of the new powers and institutions set out in the constitution in a piecemeal way under existing treaties? Thirdly, if they do not commit to opposing either the full restoration of the constitution or its adoption by stealth, will they stand by their commitment to giving the British people a voice in a referendum where they can give or withhold their consent to Britain participating in continued European integration? I beg to move for Papers.