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Mr. Blunt: The hon. Lady is inviting us to have the proper debate for which the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) called. There is a substantial political implication behind economic and monetary union. Does she agree that we should now consider the political and democratic accountability that will have to
be built around the single currency and the single economy to make the European institutions accountable to her constituents and mine?
Ms Squire: I would certainly welcome a far more open and informed debate on all issues of concern in the European Union, be they economic, social or foreign policy-based. It is depressing how difficult it seems to be to have that debate without getting a tabloid reaction from some of the media: they do not give us information on or arguments for and against the various aspects of our approach to Europe.
My right hon. Friend the Foreign Secretary suggested that we should identify clearly those areas that should come under subsidiarity and those, such as the drugs trade, on which an international or common approach can be of mutual benefit.
I welcomed the fact that, at the end of our presidency, one of the conclusions reached at Cardiff was that a sustained effort is needed to bring Europe closer to the people. That is even more important now, when countries without our long tradition of parliamentary democracy and debate are joining the European Union. I welcome the ideas coming from independent groups such as the Centre for European Reform about how we can make the Commission more accountable. I do not know whether that should happen through elections, but I would like to hear people's views on the subject.
Mrs. Dunwoody:
Does my hon. Friend really think that there will be any move towards electing the Commission? It is a hybrid organisation in which jobs are reserved according to nationality. Its very rigidity makes it impossible for it to become accountable, and that is what occasions the grave reservations that many people in the United Kingdom have about it.
Ms Squire:
I am by no means advocating any particular approach. I entirely agree that the Commission is seen as remote and unaccountable, producing endless reams of paper that no one can understand. I would like the Commission to be introduced immediately to the Plain English Campaign so that it produces stuff that is readable. I would like the House to have more open debate on how we can make the Commission and other European institutions accountable and help our constituents to feel that there is a direct link between those institutions and the reality of their everyday lives.
Mr. David Heath (Somerton and Frome):
In my brief experience of the House, I have noticed that the only thing that stops foreign affairs debates being timetabled for Friday mornings is if the House is not sitting. In that case, they are held on Thursday evenings, but it would be a pleasure at some time in the future to attend a foreign
In many ways, we have had an interesting political week and the crisis--one might say disaster--that has befallen the Conservative party in the past day or so has been fortunate in many ways, not least because it drew the press's attention away from their unremitting campaign of questioning the direction of British European policy. The crisis even brought The Sun back from expressing itself in inadequate German to its normal practice of expressing itself in inadequate English.
When the Foreign Secretary appeared before the Foreign Affairs Select Committee earlier this week, I asked him whether he felt that there had been a change in attitude to the principle of subsidiarity in the European Union. He was more sanguine than I believe was justified in the circumstances. In the past few months, a renewed climate of indecision, even hostility, has developed around some basic tenets, which I am sure I share with the Minister, behind the development of the European Union.
Everything must have seemed very different only a few months ago when we watched the election of the new German Government, which joined other socialist Governments--at least nominally--across Europe. It must have been with some glee that the spin doctors from No. 10 and the Treasury visited continental Europe to talk to Mr. Jospin's medicins de rotation and Mr. Schroder's Drehungdoktoren. Together they would be able to form a miasma of European spin to create the new European way, as it was described, which may be a continental version of the third way. However, it seems that all that effort was in vain, because it has all gone wrong in the past week. We may draw a couple of morals from that. First, do not let the Treasury try to run foreign affairs, because it is not equipped to do so. Secondly, there is still a real debate about the direction of the European Union and the arguments have not yet been won. The difference between this Government and the previous Government is that we are all now at least engaged in the arguments and can contribute to them. I hope that is what will happen in Vienna.
Earlier in the debate, the Foreign Secretary quoted Chancellor Klima as saying that tax harmonisation would take up one minute of the time in Vienna. I sincerely hope that he is wrong, because that crucial question should be addressed by the heads of state and foreign secretaries. The controversy we have seen in the newspapers in the past week has been somewhat synthetic. Mr. Lafontaine has conveniently been portrayed as the new bogy man--the new thing of the night--to replace Jacques Delors, in his time, and Jacques Santer, although the latter never had a sufficiently exciting persona to cut the mustard as a bogy man. Mr. Lafontaine has some potential in that area. We have seen proposals from 1996 dredged up and displayed as a real and current danger of standardisation across the European Union.
It would be offensive if I were to appear patronising to a senior politician of a partner Government, but Mr. Lafontaine has not been helpful to the European debate in the past week, for a couple of reasons. One is that, after a long period in opposition, he is a member of a newly elected Government. As we have seen, that sometimes causes people to speak in haste and then repent at leisure that they were not quite as diplomatic as they should have been. Another reason is that Mr. Lafontaine
is a Saarlander--that is an important factor. He looks out of the window in Saarbrucken and sees people coming across the bridge every morning from the villages around Sarreguemines on the other side of the border. In that part of Europe, harmonisation is a real factor, because people live in France and work in Germany and vice versa. The border is very porous and the effects of that are a factor in his political make-up.
In recent days, the British Government have gone some way to addressing the issue, although not as plainly as I would wish. I am disappointed that the rebuttal of the proposals for tax harmonisation has been couched in a chimeric expression of sovereignty, because there are strong arguments against harmonisation that have nothing to do with sovereignty, important though that is. First, it removes the only element of flexibility within the rigid framework of tax policy that the Maastricht treaty laid out. Secondly, tax harmonisation cannot be reconciled with subsidiarity. The two do not go together. If one is genuine about subsidiarity, national Governments must have the freedom to set tax levels. Thirdly, tax competition is a useful mechanism. Genuine tax competition--I do not mean tax evasion or the abuse of the tax system that we see in some of the tax havens dotted around Europe--helps to establish economic parity between nations. Although harmonisation of tax levels across international borders may sometimes be a good thing, compulsion is not. The argument is the same as for compulsory competitive tendering in the domestic sphere. There is nothing wrong with competitive tendering, but if it is made compulsory it is wrong because it forces distortions on local choice and on the end result. We must also point out to partner states in Europe that tax harmonisation could also prove painful to their national interests--the President of the Commission may recognise that from his national background.
My second point concerns the protocol on subsidiarity. I was pleased to hear the Foreign Secretary say that some of the mechanisms of that protocol may be put in place before the eventual ratification of the Amsterdam treaty. The tragedy is that that has not happened already. If the nations of Europe were agreed that subsidiarity had to be made a reality, why was not the European Commission required from day one to justify any proposals it made in subsidiarity terms? There is no reason to wait for ratification. It is essential to see whether the protocol produces the right results. I would go further. We should seek codification across Europe, not just of treaties, but to establish the basic principle of subsidiarity--devolution of power to the lowest available level. We simply do not have that now.
I know that it is unhelpful to talk of a constitution for Europe, because others use that phrase in different ways, and it carries implications of a superstate, which I certainly would not support. However, we need something that says that some things are best done locally, regionally or nationally. Only matters better dealt with at the European level should be dealt with at that point. Such change should be retrospective, going into the acquis communautaire. We cannot leave aside all that has been done to date, saying that it was right just because it has been agreed. Times change, and matters ought to change with time.
I hope that the Vienna council will address the management of the EU and how the Commission organises its affairs. The Court of Auditors report on the mismanagement of international aid was so damning, not just of the small element of fraud, but of the much bigger element of mismanagement and simple incompetence that it cannot be left to the scrutiny committees of the European Parliament to put matters right. The Governments of the member states must call the Commission to account, and must say that that state of affairs cannot continue. We must have better management.
The British Government have exactly the right attitude towards budgetary control, and they should work with those who take an equally well defined view of how that control can be implemented. I mention with approbation, because I have spoken to him a number of times and I like what he says, the Finnish Commissioner, Mr. Liikanen, who has done a good job in putting forward proper suggestions for control of the European budget.
The proposals on EU co-operation on justice and home affairs are an important area for further development. We have seen initiatives on combating the drug trade, or international crime. However, a degree of--dare I use the word harmonisation; probably I dare not--co-operation across Europe is important to make sure that internal security measures are compatible and effective.
The Government will have to reconsider their position on asylum and immigration to ensure that our policy is compatible. The same is true of the future of the Schengen agreement, because we shall eventually find that it is in our national interest to have a degree of association with it. We must, of course, recognise our particular position as an island state, with all that that implies, but we must, nevertheless, consider the Schengen agreement anew.
The common foreign and security policy will be crucial. I wish the Prime Minister well on his day trip today to St. Malo, as I wished him well in Portschach. I wish, however, that he would occasionally share with the House the thoughts that he is so willing to share everywhere else in the world about the future of the common defence and foreign policy. He is exploring new areas of crucial importance, and the House ought to be able to express an opinion. As the right hon. and learned Member for Folkestone and Hythe (Mr. Howard) said, we received no statement after Portschach, despite the best endeavours of Conservative and Liberal Democrat Front-Bench spokesmen to encourage the Prime Minister to give us one. I hope that he will explain his thinking to the House in the very near future.
We must maintain a commitment to NATO, an organisation of desperate importance to us. No one argues with our maintaining the inalienable right of the British Government to be the only body that can send British troops into danger. Anyone who feels that that can be short-circuited is quite wrong. Even so, it must be good to increase co-operation, and to increase the capacity to integrate the armed forces of Europe, particularly those of Britain and France, the real players who have strong armed forces in the European theatre.
In foreign policy, it is time that a senior diplomatic representative was appointed. It has taken too long to reach that point. Many Members are simply unaware of the scale of the European Union's diplomatic corps across
the world, which is enormous, but undirected. We must fix its direction, and we must, in whichever areas we can, agree a common policy. That is particularly true in continental Europe, on the fringes of central and eastern Europe and in the Mediterranean area. One of the great negatives of the past year has been our complete inability to do anything effective in Algeria, on our doorstep. That failure speaks volumes for the need for a better integrated foreign policy.
EU states have already done quite well at integrating efforts at the United Nations, but I hope that we can do more. There is a high degree of interplay between the permanent representatives of the EU states at the United Nations. However, we heard in the Gracious Speech about the Government's commitment to UN reform, an area on which Europe has something important to say. I hope that we shall not consider only Security Council reform, because that may prove to be a dead end up which it is impossible to secure the agreement of other member states. Other areas are in desperate need of reform, and of new investment that can come only if we reduce overheads in areas in which money is being mis-spent because of a lack of will to look seriously at the distribution of funds. In particular, some agencies no longer perform a useful function, and their time, frankly, is up.
As a European entity, we should put real pressure on the United States of America to pay its arrears to the UN--it is scandalous that it is $1.5 billion in arrears. The Administration's arguments about difficulties with Congress will not wash. Insufficient effort has been made to ensure payment of those arrears, and we must pressure the USA, not least because we are the main creditors. Britain, France and the other countries that contribute to peacekeeping operations are not being paid because America will not pay its bills.
On Agenda 2000, the Cardiff timetable is desperately important if we are to see proper reform of the institutions. The Germans say that they are committed to it, and I ask the Government to ensure that that commitment is made explicit at the Vienna council.
Progress has been made on enlargement, even among some countries not in the first phase, such as Latvia, Lithuania and Slovakia, with its change of Government, and I hope that they will catch up rapidly. The Government should continue to adopt the principle of inclusiveness. We must make sure that everyone who is potentially in the running is encouraged to stay in the running.
The same applies to those countries in the first wave that are not making the necessary reforms. Having visited Prague recently, I am frankly disappointed with how the Czech Republic is meeting the demands of accession. We must tell such countries that they must ensure that they do what is necessary.
I shall finish by referring to two areas of current attention that the Vienna Council will probably touch on. The first is the crisis in Russia. It is desperately important for the European Union to do something effective to ensure stability there during the present economic crisis. We must also think of the countries that are still dependent on Russia irrespective of the changes of recent years, such as Belarus, which is not an easy country to like, but which we nevertheless need to embrace and Ukraine, which we often forget. Ukraine is a country the
size of France and it will be on the borders of the European Union if Hungary accedes, yet we forget about it. We cannot afford to do so.
Finally, I hope that Kosovo will still be on the agenda at the Vienna Council and that we will ensure that we make a concerted effort on humanitarian aid. A few months ago, I visited the former Yugoslav Republic of Macedonia. I went to the border, although not to Kosovo, and could see to some extent what was happening there. One problem is the almost complete lack of building materials. It is difficult to get them in peaceful Macedonia. How much more difficult it must be in Kosovo, given its devastation and the non-co-operation of the Serbian Government. We must tackle that problem and contribute positively to the extraction force, as we have been doing, to ensure that it is integrated into the Kumanovo area and does not cause any further difficulties for the Macedonians, who have gone through a difficult period.
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