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Mr. Bryant: I presume that it refers to articles 95 and 96. My right hon. Friend is a far more able lawyer than me, but as memory serves me, those articles refer to state aid provisions. I presume that in that light article 100 makes sense.
Denzil Davies: I am not sure about that, although I do not criticise my hon. Friend. Article 100 comes under title VII entitled "Economic and monetary policy". Chapter 1 is entitled "Economic policy" and starts with article 98, I am sorry to tell my hon. Friend. Article 98 contains the terrible paragraph that upset the Irish. The powers in article 98.4 caused the Commission to issue a recommendation to the Irish Government saying that their economic policies were nonsense. That contributed to the defeat in the referendum. Article 98 comes under the heading of economic policy. My hon. Friend may be right—the article may be about state aids, but what are the products that are of considerable and fundamental importance to "the economic situation"?
Mr. Cash: The right hon. Gentleman may care to reflect on the possibility that the article is something to do with BSE and products that a country would normally expect to export. The supply of those products may be restricted due to the constraints that have been imposed.
Denzil Davies: That could be the case. We would like to know why we find concern about the supply of products in article 100.
What sort of measures could be deemed appropriate? Paragraph 1 of article 100 does not mention money, although it could be referring to state aids. I am sure that the Foreign Office is well aware of these things and that there are bundles of papers in the basement somewhere to explain the drafting of the clause.
I raised paragraph 2 of article 100 previously. It says:
- "Where a Member State is in difficulties or is seriously threatened with severe difficulties caused by natural disasters"—
- "or exceptional occurrences beyond its control, the Council, acting by a qualified majority on a proposal from the Commission, may grant, under certain conditions, Community financial assistance".
Denzil Davies: Perhaps my hon. Friend is now about to mention state aids. I do not see where it fits in.
Mr. Bryant: Article 87 was formerly article 92, which refers to state aids. It makes it clear that there are certain situations in which state aid is legitimate. I presume that those provisions follow into the legislation that we are discussing.
Denzil Davies: I am glad that my hon. Friend is presuming that. I have discovered in debates over 30 years on these treaties that one should presume as little as possible. It may well be to do with state aids. The money seems to be coming from the other countries—financial assistance is given to the member state. I thought that state aid was given by the member state to itself. I am not sure about that, however.
Mr. Bryant: This is becoming a debate—I do apologise.
Mr. Peter Atkinson (Hexham): This is not a court of law.
Mr. Bryant: Indeed; I am sorry. My right hon. Friend is right—
The First Deputy Chairman: Order. I wonder whether the hon. Gentleman could address the Chair?
Mr. Bryant: I am sorry, Mrs. Heal. My right hon. Friend is correct that in the majority of cases in the past, state aid has referred exclusively to the provision not just of financial assistance but of many other forms of assistance to organisations within the member state. However, if there were to be an earthquake in Turkey, for example, it might be appropriate for other member states across the European Union to provide financial assistance to organisations in Turkey. There is a danger that without reform of the present law, that might constitute state aid, to which others might take objection.
Denzil Davies: I would like to give my hon. Friend my copy of the treaty. This is not about aid to Turkey but to other member states. The treaty says
- "the Council, acting by a qualified majority on a proposal from the Commission, may grant, under certain conditions, Community financial assistance to the Member State concerned."
Mr. Bryant: That is the point that I was making.
Denzil Davies: I thought that my hon. Friend was assuming that Turkey was outside. In any case, the assistance goes to the member state. What exceptional circumstances, apart from national disasters, did the draftsmen have in mind?
Mr. Cash: I should have thought that foot and mouth disease might well be covered by exceptional circumstances. The treaty refers to exceptional occurrences beyond a member state's control. Given that aid to the tune of about £4 billion a year has been given to the German coal miners, our farming community, tourism industry and all areas of the British countryside affected by foot and mouth could qualify, on that basis, for several billion pounds worth of aid to get everything back on course.
Denzil Davies: The hon. Gentleman makes a good point. It may have been under article 100, or perhaps it was under the common agricultural policy, that assistance was given to the United Kingdom in respect of BSE. No doubt the Minister will tell us what is meant by "exceptional circumstances."
I come back to the important point before us. We have given up the veto again. The Government argue that it is technical and not important in these areas. Basically, they are saying, "Who cares?" Well, one should care about it. We would not necessarily veto this measure, but it has financial implications and, ultimately, those financial implications concern the member state.
The President of the Commission wanted a European tax, but Finance Ministers gave that proposal short shrift. Ultimately, if something costs money, the cost falls on us. For the Government to argue that it does not matter is, at the least, cavalier. This is another area in which the veto is important. Nothing could be more important than finance and taxation. For the Government to give up the veto when money can be paid out was irresponsible. No doubt my hon. Friend the Minister for Europe will disagree with me, and I hope that he will give me the answers for which I have asked.
Mr. Menzies Campbell: I share the view of the right hon. Member for Llanelli (Denzil Davies) that the effect of the amendment is to excise article 5 of the Nice treaty. Article 5 of the treaty, which can be found on page 45 of Cm 5090, would add a paragraph 10.6 to article 10.
9.15 pm
Mr. Bryant: It is article 2, section 5 that is being replaced, not article 5. It can be found on page 16 of the treaty.
Mr. Campbell: No, I think that I am right—[Hon. Members: "You are."] I appear to have support from quarters that have not commonly been supportive in recent times in this debate.
The right hon. Member for Llanelli expresses the view that article 5 would be removed if the amendment were accepted. If that be correct—
Denzil Davies: I thought that it was paragraph 5 of article 11, which, as my hon. Friend the Member for Rhondda (Mr. Bryant) says, can be found on page 16. However, I may be wrong about that.
Mr. Campbell: As I appear to have support from a variety of quarters, I shall press on. Our debate has been hindered to a degree by the absence of the usual lucid and clear exposition of the position by the hon. Member for Stone.
Assuming I am right—my view appears to be shared by others—we turn our attention to article 5, on page 45 of the treaty, Cm 5090. There, one finds that article 5 provides for an amendment to article 10 of the protocol on the statute of the European system of central banks and of the European central bank. It would add to article 10 a new provision, paragraph 10.6, the effect of which is to provide that article 10.2 of the protocol can be amended by the Council, provided it is done unanimously and in accordance with the respective constitutional requirements of the countries that are engaged.
That is what I understand to be the position of the hon. Member for Stone, for which there is some support. In his pamphlet on Nice, the hon. Gentleman deals with the question of the new procedures set out in article 10.6 of the protocol, stating that the new arrangement will
- "introduce the possibility of abolishing equality"
Currently, the rules of the European central bank reflect neither the populations nor the gross domestic product differentials of the member states. On some future occasion, it may well be considered necessary to amend the deliberative procedures of the ECB, It strikes me as sensible to provide that the procedures are able to be amended, and that is what new paragraph 10.6, which we find on page 45 of Cm 5090, would provide. It seems to me that adequate protection for the interests of the United Kingdom is provided because any amendment has to be unanimous and has to be ratified by the constitutional provisions of all the countries that seek to take part in such a process.
In so far as amendment No. 54 would delete article 5, it is self-defeating, because the deletion of article 5 would be against the interests of the people of the United Kingdom and, more generally, against the interests of those who want the ECB voting procedures to be controlled or regulated by an arrangement that better reflects either GDP differentials of member states or their populations. Given the remarks made earlier today by hon. Member for Stone, I should have thought that he would argue for the retention of article 5 rather than its removal.
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