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EU Constitutional Treaty

My Lords, it has been a serious and, as the noble Lord, Lord Howell, said, very enjoyable debate. I thank all those who have contributed to making it so good. I especially thank the noble Lord, Lord Blackwell, although, as I expect to make clear, I agreed with no part of his analysis. His speech was trumped only by those of the noble Lords, Lord Pearson and Lord Willoughby de Broke. More than anything, as I heard the noble Lord’s speech, I was drawn to wonder whether he is in contact with Conservative Party policy on Europe or a harbinger of change to a harsher position. What he set out for Europe would amount to withdrawing from it pretty much now, and some of the other views put rather less trenchantly would have the same impact. The noble Lords, Lord Brittan and Lord Bowness, were obviously in a different place in understanding the importance of Europe. With the June European Council just weeks away, this is a good moment to set out the Government’s position on the treaty and connected European issues. The Government consistently made it clear that the treaty represented a sensible approach for Britain and Europe. My noble friend Lord Tomlinson pointed out that, given the inadequacies of the Nice Treaty for these purposes, it was needed as a sensible set of rules for the operation of an enlarged and modernised European Union. Many of those elements were set out by the noble Lord, Lord Howell, just a few moments ago—for example, yes to smoother rules of governance. Sensible but modern arrangements should be introduced. The rejection of the EU constitutional treaty in 2005 by French and Dutch voters may have been a real surprise to some and a disappointment to those who worked on the Convention on the Future of Europe and in the negotiations. But the no votes are a reality check for everyone who believes that, in an enlarged EU of 25, we have to take account of reforms to the way that the EU does its business. I say to the noble Lord, Lord Dykes, and perhaps to one or two others, that there may be some wishful thinking that the non vote was a consequence of simple political errors and miscalculations or poor government polling. But I was there for part of the discussions in France, as, I know, were other noble Lords, and I heard people talking in bars about the services directive, the impact of globalisation and whether the treaty would or would not help to protect French interests in restaurants. It was a very lively and—let us acknowledge it—intelligent debate, even if it produced a result that was not to all our tastes. The noble Lord, Lord Brittan, is wholly right when he says that, in the mix of the description of what has happened, we are locked into a number of completely dissonant myths. That is absolutely true. It is worrying how such myths cling, but we must deal with the fact that they do. Following the no votes, it was agreed at last June’s European Council that there would be a period of reflection to enable a broad debate on the treaty to take place. That was the sensible route to take. This June, the European Council will make an overall assessment of the national debates in member states and agree on how to proceed. We will participate constructively in those discussions. I emphasise that much of what I have to say is in broad agreement with what the noble Lord, Lord Hannay, has said. President Barroso was evidently right—as the noble Lords, Lord Anderson and Lord Bowness, said—that it is wholly unlikely that there will be a consensus on the way forward for the treaty in June. Nor will there be any serious prospect of consensus in the immediate future. I know of no serious commentator anticipating a serious discussion at any time before the French presidential elections at the earliest. None the less, there has been a good deal of discussion on the EU constitutional treaty among many people. We know from the polls, however, that this discussion is not reaching the hearts of what most people think Europe should be about: citizens’ real concerns. People across Europe feel totally disconnected with this type of debate, certainly in the current circumstances, when they face many difficulties such as unemployment, insecurity and so on. Some of the debate is bound, in these circumstances, to pass people by. It is essential that we draw the lesson from this, and try to engage people on the issues that are important to them: jobs, security and stability. People want to see more transparency in EU decision-making, because obscurity in process is a huge impediment to understanding what is going on. If we get them right, these issues could promote confidence in the EU. This is hardly a sensible, propitious time to plunge into a further detailed discussion of the treaty. We must demonstrate first that we have delivered to the citizens of Europe on the issues which are important to them. We have to recognise that we must park the discussion on the treaty for the time being, and focus on the issues agreed at Hampton Court. The European Commission showed last week, in its communication on A Citizen’s Agenda—Delivering Results for Europe, that this is also what it intends to do. We should embrace the same process in this country. On Hampton Court, the UK presidency of the EU in the second half of 2005 reasserted where Europe should be headed. The informal meeting of heads of state at Hampton Court clarified and determined what the priorities should be. Hampton Court gave us all a vital opportunity to reconnect with the issues that Europeans face on a day-to-day basis: economic reform, tackling the challenges—which they personally experience—of globalisation, energy, security, counter-terrorism and organised crime. The noble Lord, Lord Brittan, also illustrated how that process of discussion in economic and market reform within Germany can add to a debate on those very issues: real, consensus-building issues, if they are right. The noble Lords, Lord Bowness and Lord Brittan, have also made the point that many of the matters discussed are not restrained in any respect by borders, whereas others are, of course, for states and, through the states, for the Community. As the Prime Minister summed it up in his speech in Oxford in February:"““don’t start with the rules. Start with the reasons they are needed””." Let us have a quick look at some of those reasons. The spring European Council in March reaffirmed 2007 as the target date for the liberalisation of energy markets. I shall not go into a major discussion of energy security and provision today, because there would not be time, but it is a real concern. Concern has often been expressed in this House over whether energy security is assured, and whether we can guarantee supply in the long term. The decision of the Council for the Commission to present a strategic energy review on a regular basis is a good step forward. On the discussion of the services directive, the internal market has boosted EU GDP by €875 billion over 10 years, and generated 2.5 million jobs. We must now complete the free movement of services, one of the four fundamental freedoms of the treaty. We support the Austrian presidency’s aim to deal soon in the Council with a directive that will boost jobs, growth and competitiveness in Europe. To be candid, we would have preferred an even more ambitious statement. Our approach to the June European Council will be to drive forward, with our partners, the priorities of Hampton Court. That should remain our focus. The European Commission’s Agenda for Europe paper, published last week, reflects the view of Europe’s immediate priorities, which have also been expressed by the Prime Minister and Chancellor Merkel, who made the important point that although the German presidency wants to return to these issues:"““However, I am against moving too quickly and putting us back in a situation where we can’t move forward . . . We need to think about how we make the constitution a success””." Her point is that the discussion process would necessarily be quite long. Most important in this period are the economic reforms needed to make the EU competitive in today’s global economy. Of course, during the period of reflection, we have seen member states contribute ideas on the way forward for the future of Europe; but that is what they are: ideas. What a surprise that ideas get discussed in Europe, the continent of the Renaissance. This is a place where we will always talk about ideas. None has taken root, many are circulated widely. In France, Mr Sarkozy has called for a short treaty based on parts 1 and 2 of the constitutional treaty. President Chirac, who does not always sing from the same song sheet as Mr Sarkozy, has encouraged member states to exploit the current treaties, and says France will not put the treaty to a referendum again. The Scandinavians support retaining part 3 of the treaty. The Dutch say that the treaty is dead, without producing any alternative ideas. The European Parliament wants to implement part 1 of the treaty, which includes most of the institutional changes. The Germans have in the past publicly supported the entire text but the noble Lord, Lord Harrison, draws our attention to the fact that some of Chancellor Merkel’s ideas seem newer than that. It is a great flow of ideas; among them, nobody particularly regarding any one member state as having the right to declare the constitution dead. Nor will I. I resist the offer of the noble Lords, Lord Blackwell and Lord Pearson, of the choice of being the treaty’s executioner or its coroner. Since there is little evidence on any consensus, it is unlikely that this is the moment at which we will achieve one. There is little benefit in speculating on the divergent and hypothetical ideas in circulation. It cannot make sense to exclude incremental, sensible or practical improvements to the EU’s functioning, as several noble Lords have said, on the basis of current treaties. So: no cherry-picking, nothing hidden and nothing by stealth. I agree with the noble Lord, Lord Howell, that we should deal with practical issues and not get drawn into that. I hope I am not putting words into the noble Lord’s mouth. I had no intention of doing so. I will comment on some of the issues that have come up in this important debate, and some of the questions that have been posed. Some are questions which the noble Lord, Lord Blackwell, introduced in his speech and in his interesting pamphlet, which he will be pleased to know I have read very attentively, Sleepwalking into a European legal system. Some of the issues come up in the context of both. First, questions have been raised over whether there would be a referendum, and whether we can assure the House that there would be, should there be a constitutional treaty to vote on. The Prime Minister has repeatedly said that there will; I affirm that today, if it needed any affirmation. There is currently no such document. The benefits or disbenefits have been raised. We have huge benefits from being a member of the European Union. As the noble Lord, Lord Maclennan, said, disengagement would be an extraordinary position to take in the light of those benefits. Being part of the world’s largest free-trade area has plainly helped to deliver prosperity in the UK. Today we are the strongest large economy in Europe, enjoying the longest period of economic growth in decades. Some 3 million jobs in the UK are due to the EU. The single market is the largest, richest market in the world, with 40 per cent of global trade. It is our biggest market. Half of British trade is with the EU, up from 35 per cent before we joined the EEC. Some £111 billion of goods have been sold by British companies in the EU. The single market has boosted EU GDP by 1.8 per cent, which roughly translates as £20 billion for the UK economy. There are all sorts of mechanisms and reasons why that is true. This is no argument for diminishing our interests and trade with the rest of the world, but it is a recognition of where some of the largest and most significant forces of trade necessarily are. I say with respect to the noble Lord, Lord Pearson, that, when he has produced figures as he has today, I have gone back to the Treasury and said, ““Can we ground these figures in any kind of reality?”” We cannot. We cannot find any serious economic justification for those figures, although I have no doubt that, on other occasions, the noble Lord, Lord Pearson, will challenge me on that again. Let me turn to the point about peace. I believe that, as the noble Lord, Lord Anderson, said, peace and stability on our continent have been absolutely vital and that the EU has been a major part of that machinery. The catastrophe of the Second World War is unthinkable in the modern European community. The goal of my father’s generation, so long unthinkable in that generation, has been achieved on what has historically been a very violent continent. Of course NATO has been the umbrella that has protected us all, but the web of links among populations and people more used to killing each other than going to visit each other is fundamental to getting the legitimacy and the confidence in that military umbrella as the way in which we protect ourselves in the ultimate from outside forces. The EU has played a leading role in preventing war and in underpinning reconciliation across Europe in the 1950s and again after 1989. It has made a vital contribution. It has been a leading force in bringing stability to the Balkans. The EU is the biggest donor of financial assistance in the world. It contributes to active peacekeeping and active peacemaking and it runs many projects that help to support peace, democracy and human rights throughout the world. The EU has been very important in areas of the environment. I will not, because of time, go through the clean beaches, the unleaded petrol and all the other benefits that have come through those routes, but they are deeply significant. In this afternoon’s debate, as we draw towards the end of a period of reflection, but without certainty regarding the future of the EU constitutional treaty, we have heard a wide range of views. There are those who would like to see the United Kingdom at the heart of Europe and those who would prefer us to withdraw tomorrow and to assume some kind of associate status such as that held by Norway or Switzerland. Like the Government, I lean to the former approach, where we play a full and influential role in Europe and are better placed to shape its future. Like the noble Lord, Lord Tomlinson, I think that we should resist discussions that undermine the interests of our people when these questions come up, but that we should nonetheless stay at the centre of Europe. I say to the noble Lord, Lord Waddington, that the primacy of EU law was part of EU law before we joined—those were the terms on which we joined the club. I say to the noble Lord, Lord Willoughby de Broke, that, on the advice of government lawyers and others, the Government’s interpretation of Article 308 and its significance rests on the phrase,"““in the course of the operation of the Common Market””." We believe that that provides the authority and legal sanction for those matters. I say to the noble Lord, Lord Waddington, that I am delighted that he found out about John Bruton’s residence from the Sunday Times rather than from a visit, because there would no doubt have been other stories in the Sunday Times had it happened the other way round. Other key points have arisen in the area of external action. No one is going to defend wasteful expenditure and I certainly will not. The external action service does not exist and will not exist unless the treaty is ratified. That is the Government’s position and it is the position that I have put from this Dispatch Box. I will also say that the status of the charter of rights is that it is not a legal document, as the constitution is not in force. The charter is a political declaration adopted by the Nice European Council in 2000. That is what it is and that is what it remains. Finally, the Norway and Switzerland option was the alternative put at the beginning of this debate. It would mean no seat at the table, no commissioner and no vote—it would be like giving up our seat on the Security Council. It would mean no EU funds, although British taxpayers would most certainly continue to pay into the EU budget—that would not change. We would be weaker in the world. We would be less valuable as an ally to our principal allies, including the United States. We would negotiate alone in the World Trade Organisation. Outside the EU, cross-border action on terrorism and crime would be more or less impossible. Our position on imports and exports would be subject to costly tariffs and customs controls. The Switzerland option would give us no place at the table, no commissioner and no vote, and we would be involved in bilateral agreements with the EU following rules in which we had no part in deciding. On behalf of the Government, I cannot accept that that way lies any sense. We should have major discussions on the future of the way in which the EU is governed. But let us do it against a background of having convinced the citizens of the EU that it is theirs, that it is of benefit to them, and that their economies, their security and their quality of life have been changed because they are members of the EU. I believe that that is a sustainable argument. We have a duty—if we have failed in it in the past, we must learn from that as well—to score real goals in those areas first and then to turn to how our governance might be improved.