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EU: Single Market (EUC Report)

My Lords, it is always a great pleasure to follow the noble Lord, Lord Harrison, particularly with his magisterial common sense on what he said today about the single market. Having been in previous times a very active MEP, the noble Lord is a very good example of a Member of the House of Lords who becomes more active as he gets older. He is a very active Peer indeed and gives us a lot of common sense on European matters, not just the single market. I agree very much with what he said. I also echo the thanks of others to the noble Lord, Lord Freeman, the chairman of our committee. If I embarrass him by saying this, I apologise in advance. I had thought that I might do just a glancing reference and leave it at that, as we often do—being polite and then passing on. But I shall say just slightly more than that because we on this committee are very fortunate—I hope that the noble Lord, Lord Freeman, is not annoyed at my saying this—in having the noble Lord as chairman. Unlike some chairmen of some committees, as we all know—no names, no pack drill—the noble Lord, Lord Freeman, motors the discussion along, so it is always a pleasure to attend. Everyone has a chance to speak and is involved, but we know that the meeting will be brisk and efficient. If the noble Lord, Lord Freeman, is still a member of several company boards, they are fortunate to have him. I am not sure of the details, although I know of Thales. In fact, they are lucky—so much so that I am reminded of an accident some years ago at a famous circus in the Midlands when the human cannonball was injured, fortunately not very badly. The ringmaster wrung his hands with some grief and anxiety, and said, ““It would take us years to find another man of the same calibre””. The noble Lord, Lord Freeman, will be delighted to know that I am ending my comments about him now, but we thank him as well for being in charge of this report. His business background helped us all to get more insight into our discussions with the evidence givers and our examination of officials and so on in Brussels and London, and from our meetings and discussions with Ministers who also were very keen to emphasise the official government support for the single market. That has been a leitmotiv of British government policy since the mid-1980s when it began and has been one of the hallmarks of leading British policy on European matters. From that point of view it is very positive. I am an all-round European enthusiast, although I do not go around saying that everything in the EU is wonderful. There is massive room for criticism about a number of aspects. None the less, I am very enthusiastic about the generality of our EU membership, so I do not say that the single market is the only thing that matters and that we can just have a bit of trade and mercantilism here and there, and economic activity, but no integration of any kind. I do not think that that is to the taste of the public in any way at all. They want more as they perceive themselves to be Europeans as well as patriotic citizens of this country. This report also showed a success in deciding quite wisely to concentrate just on a number of key areas. If we had sought to examine every aspect, sector and sub-sector of the single market, it would have been very difficult for us. How wise we were to follow up the then inquiry referred to by the noble Lord, Lord Mitchell, on mobile phones from the spring of last year with further examination of those matters in this report. Incidentally, I wanted to ask the noble Lord, Lord Mitchell, who is an expert as a result of the traumas he has suffered as the client of a mobile phone company, whether he has had the experience of cancelling a mobile phone contract. It takes just a few hours to set up a contract. You walk into shop and bingo, you have the contract and the charges start. But has the noble Lord ever tried to cancel such a contract? That is where restrictive practices can be seen. It is similar to the position with credit card companies and to a lesser extent bank cards. When you call to cancel the contract, it can take months. That is particularly true of mobile phone contracts. We can be very pompous here and say, ““Wicked countries in the EU have lots of restrictive practices, but we don’t have any””. Even some members of the CBI used to say that. I am sure that there are some restrictive practices everywhere, and I am sure that the Minister is an expert on the issue and tries to get rid of them. However, tremendous disutilities can arise in the area of contracts. Another example of something that can become a significant national restrictive practice is in the area of implementation of the directives that come from the creation of the single market. There is a long list of them, and by and large they are very successful. However, once again the disutilities become evident. As we know, there are two kinds of implementation: one is the implementation that is brought about through the legislative process whereby governments and parliaments enact directives, and the other is the real implementation that comes from regulators and all those concerned with oversight and monitoring in departments such as DBERR in this country and similar ones in other member states. This implementation reflects what is happening on the ground, and that is a much harder thing to achieve. Nowadays, by the way, we have fewer directives and they are couched in broader terms as framework documents. They are much more rational instruments of Community legislation than was the case with the somewhat tedious documentation of earlier days. It takes a long time for a real single market to be created because it is a hugely complex thing. Lest again we feel pompous and superior to our foreign colleagues in these matters, such as thinking that the Germans have guilds, apprenticeships and strong trade unions, which is sinful, let us consider the market from the point of view of the other member states. They say that Britain has the biggest restrictive practice of all, and here of course I mention the euro. My partner Sarah says that sometimes I talk about the euro too frequently at dinner parties, so to be reasonable I say that I will raise the subject on only one out of every three occasions. The UK not joining the single currency is regarded by other member states as a gigantic and foolish restrictive practice. The Minister cannot say that when he comes to reply, so I give him dispensation not necessarily even to refer to it. But let me just say that you cannot have a real single market without a single currency. The adverse factors that arise from the huge expense of changing from sterling to the euro and vice versa are enormous. The costs are huge and the pound is propped up with twice the level of interest rates as those for the euro. Indeed, the euro faces a dilemma because the European Central Bank has been so successful in its German-style monetary restraint policy that if it were to lower interest rates the euro will rise in value—more expansion would lead eventually to more inflation—whereas if it were to raise interest rates because of inflation fears, the euro still goes up because it becomes a better earner. In the mean time, the euro has become the most successful currency in the world, and ill-advised as they were, the British Government missed the opportunity to join it from 1997 onwards. It now gets harder and harder for Britain to join the euro because presumably we would want to see a devaluation with our trade figures. While Britain is an important trading partner, would the other member states be able to accept that? We need to be sensible about what we and the other member states can contribute. All have pluses and minuses. Germany, with its large manufacturing sector and trade surplus, actually supports the entire European Union. In effect it is the main trade surplus element. Our trade deficit is embarrassing, but fortunately we are good on invisibles, which gives us a lead in financial services. It works all ways. I agree strongly with the suggestions made by my noble friend Lord Bradshaw and the noble Lord, Lord Berkeley, whose detailed comments, for which I am grateful, outlined the idea of a single market in trains, developing both passenger and freight railways as quickly as possible. Again, it is very complicated and the old historical realities of each member state mean that walls of resistance are set up against any kind of co-ordination and integration. However, it is beginning to happen with the far-sighted decision of other member states to form a high-speed network all over Europe for passenger trains and increasing co-operation on freight. A recent example of that is the new freight train service being launched between Luxembourg and Perpignan to carry juggernaut lorries on flatbed wagons instead of them having to use the motorways. That is a major contribution to helping to avoid further excessive congestion, particularly for this country given its small size. The single market in railways will take a long time to develop, but these are the practical things that the public in all the member states want. I commend too the Britain for a new Europe pamphlet on the extraordinary degree of economic and financial integration already being achieved in the single market. The public have reacted to it and want to be consumers on a European scale, even if they are still at the margins geographically. On that, a lot of co-ordination for geographical reasons is developing between Kent and the Nord-Pas de Calais. There are many examples of French companies operating in Kent and British people running small businesses in the Nord-Pas de Calais. It may have been a struggle, but they are beginning to be successful. This kind of thing is what consumers and customers will want in the future, so we have to make sure that the expenses of such ventures are minimised; that is for Government action. I conclude by referring to the single European payments area for banks and bank customers. This is still a highly unsatisfactory situation and needs to be looked into. Charges are still excessive partly as a result of the different currency used in this country and because the banks are still pursuing their latent restrictive practices by keeping these charges as high as possible. The Commission is doing its best, but it is a slow process. It is now legally supposed to be a single area, but the disutility remains massive. I hope that the Minister will at least refer to this issue, even if he does not refer to the euro.