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European Council: 8-9 March 2007

My Lords, I would like to repeat a Statement made in another place by my right honourable friend the Prime Minister. The Statement is as follows: ““With permission, Mr Speaker, I will make a Statement about the European Council that took place in Brussels on 8-9 March. ““There were three main agenda items for this summit. First, the Council agreed to cut the administrative burden arising from EU legislation by 25 per cent by the year 2012. This has long been a key British objective. It was a major part of the UK presidency of the EU in 2005 and it mirrors our own government decision taken last year. This EU decision makes another clear break with traditional European policy on regulation. It is hugely to be welcomed. It follows up a recent Commission decision to withdraw 78 pieces of legislation, the first time the EU has done this. I congratulate the Commission, and especially President Barroso and Commissioner Verheugen, on their determination. It has full British support. ““Secondly, the Council agreed on an action plan to liberalise the energy market. The centrepiece is to free up the distribution of energy across the European Union, to create a genuinely competitive, interconnected and Europe-wide internal energy market. This will bring major benefits for EU consumers, improve security of supply and strengthen European competitiveness. The European Council decided in particular that supply and production activities should be separated from network distribution to allow competition on networks, as already happens in the UK. ““Again, ever since the Hampton Court Summit of October 2005, energy liberalisation and security of supply has been a key UK objective for the European market. It is true that we still need to do more, especially in respect of the vertically integrated energy companies. But none the less, for the first time, this will mean that, at the distribution level at least, British companies can compete on equal terms with French or German companies, in particular in France and Germany and not just here in the UK. This will bring reduced costs to business and to customers and again has our full support. ““Thirdly, and most importantly, the European Council committed itself for the first time to a binding Europe-wide environment target: a 20 per cent reduction in greenhouse gas emissions by 2020 compared with 1990. Moreover, the European Union undertook to go further and achieve a30 per cent reduction in emissions by 2020 if this was part of a wider international agreement. Until last week no group of countries had committed itself to such deep reductions. This is a landmark decision. It will mean changes in all member states' domestic policies. ““The Council also agreed on a binding commitment that renewable energy will comprise 20 per cent of overall EU energy consumption by 2020. The agreement allows, however, for differentiated national targets within this overall EU objective. In particular, it recognises that for some member states, nuclear energy will play a significant role in achieving overall climate change targets. ““The Council, in addition, agreed a 20 per cent increase in energy efficiency, again by 2020. It also recognised the importance of clean-coal technologies. We welcomed the Commission’s undertaking to support, by 2015, the construction and operationof up to a dozen commercial scale clean-coal demonstration plants, with a view to all new coal-fired power stations being fitted with carbon capture and storage technology by 2020. This technology has to be a crucial element in the overall response to the climate change challenge, and it is important that we signal that to investors now. Clean coal can be part of the future. ““All these targets impel us towards a far more ambitious European Emissions Trading Scheme. The Commission President is currently negotiating country-by-country caps on emissions for 2008-12. Britain, as he has acknowledged, has helped by setting ambitious caps for ourselves. The Commission has proposed that, after 2011, aviation should also be within the ETS. We want to make the ETS more transparent and we want it extended after 2012 to 2020 and beyond. All these proposals are set out in our recent paper to our European colleagues and we are actively building the alliances in Europe to get it done. ““Of course, these European commitments have to be part of wider international action. As the Stern review demonstrated, without concerted international action there will be disastrous consequences for global economic development. The European Council reaffirmed the importance of agreeing a long-term framework to address climate change. It set out a coherent and united vision for how such a wider international agreement would work. It paves the way for further action on climate change at the G8 Summit in Germany in June. ““This is, in the end, the crucial prize. It is important that we take action here in Britain, as tomorrow's Climate Change Bill will show. It is then critical that the European Union shows leadership. At this summit, it has done so in a remarkable and groundbreaking way. For those who doubt the relevance of the European Union to today’s world, last week’s Council and its historic agreement on climate change is the best riposte. It shows Europe following the concerns of its people and giving real leadership to the world. ““But ultimately only an agreement that is global and includes America, China and India will halt the damage of rising greenhouse gas emissions. Everything else is justified in its own right, but it is, most of all, a means to that end. The G8+5 dialogue, which was started at Gleneagles in the UK presidency in 2005 and which has all the main countries within it, is the forum in which new principles for an international framework can be agreed. The summit in Germany this June will be the time to agree those principles, including a stabilisation goal, a route to a truly global carbon market, support for new technology, adaptation measures, and action on deforestation. This is the next stage of the journey to effective, multilateral global action on what is the single biggest long-term threat to our world. ““Let me conclude by paying tribute to the leadership of Chancellor Merkel at the EU Summit. It was a bold agenda and she carried it superbly. Unsurprisingly, since these were all fundamental British objectives, we were able to give that leadership full and active support. Once again, it shows the significance of strong, constructive and positive engagement in Europe””. My Lords, that concludes the Statement.