Select Committee on Foreign Affairs Minutes of Evidence

Examination of Witnesses (Questions 20 - 33)



  20. Just a moment ago you gave an emphatic "No" in saying that you would not rule out, after the Convention when you have heard all the arguments, the possibility of moving to QMV in each and every one of the items that were listed in the White Paper. Is that your position?
  (Mr Straw) What I said was what I said, Sir John. I explained the position at the moment. I also made the point about saying that we should all, including members of your Party too, be ready to listen to the arguments that the Convention may advance. The test here, it seems to me, and there is not a religious principle around QMV, is about the national interest: how is our national interest best served. In terms, for example, of our national interest and energy liberalisation, having a free market in energy, the interests of our consumers and of our businesses, it is not served by the national veto because that would lead to some countries vetoing positive changes. It is served by QMV and with a bit of luck we will be able to overcome any blockages by other countries, including France, on energy liberalisation with QMV.

  21. So you are saying to us—I want to get the Government's position clear—that the options are open as far as the Government is concerned to move to QMV in each and every one of the items that have been referred to in the White Paper?
  (Mr Straw) No. What I am trying to do—and it may not be possible; maybe I am being naive here—is to have an intelligent discussion about where we are at the moment. That text remains the position of the Government's policy. I have explained the position on asylum and immigration and border controls. Border controls are a part, but only a part, of asylum and immigration. I am also saying that this is not a shibboleth, the national veto. What is, however, bottom line is the national interest. In many cases you have to defend the national interest by the national veto. In some cases, however, you defend it by QMV. That is a paradox which I think many have asked and the record shows.

  22. I can only conclude from that that you are saying to the Committee that all items that were referred to as being in the national interest to be preserved by unanimity might, on the definition you have just given, be deemed by the Government as being possible items to QMV in the national interest. That is what you seem to have said to the Committee.
  (Mr Straw) What I have said is what I have said and I am very comfortable with that. I have also made the point that there is no way that treaties are intergovernmental matters and that provides an overarching text, that the treaty changes can be made other than by unanimity.

Mr Maples

  23. The Lisbon agenda on the liberalisation of working practices in labour markets and trade is something I think that almost all of us can share with you, the fact that an agenda that did not start in 1997. I assume the Prime Minister meant by saying this was make or break at Barcelona was that he was fed up with the slow progress and, reading between the lines of what you said earlier, I think you are too. In the list of things you read out as achievements the liberalisation of the telecoms market was a big one. It has reduced business costs, it has reduced consumer costs, raised economic efficiency. I am not sure many of the others were. I wanted to ask you about two specific ones in your memorandum to us[4] and on the agenda for Barcelona and whether you realistically expect to see any progress on them and, if not, what are the problems on the single sky. We have had some talk already about energy inter-connection. Do you think that France's objections to that can be overcome? On the single sky, which I think is something that liberalisation of air transport in Europe would really reduce business costs and increase efficiency and have all sorts of benefits for all of us, do you foresee any progress on either or both of those issues and what do you think are the problems standing in the way?

  (Mr Straw) On energy (and the position of the French Government and the fact that there are elections there is a matter of patent public record) we will be arguing for energy liberalisation. It will end up before the relevant Council of Ministers when QMV will apply, and that is in our judgement, as I have said, a good thing.

  24. Do you think you can get a qualified majority?
  (Mr Straw) Probably, is the answer, but we cannot be certain about that. There are different aspects of energy liberalisation, as you are aware, between industrial energy and liberalisation, non-domestic, and domestic. The other is on single skies. I am going to ask Mr Darroch to give you more detail about that. I doubt, save for anything he says, that we will make a breakthrough at Barcelona on single skies. What happened on single skies was that it was blocked for a period by Spain in respect of Gibraltar, but what was clear once that was unblocked (and that was an early part of the Brussels process over the future of Gibraltar) was that many other countries had been sheltering behind that blockage and had not really wanted to apply themselves to the issues. Mr Maples, you are entirely right to say that single sky arrangement would make a very big difference to the travelling consumer in Europe, and I think in fact due to the air industry because it has helped to improve efficiencies.

  25. Before Mr Darroch replies I am interested also in going a bit further and it not just being the air traffic management system but also the liberalisation of airline passenger travel within Europe which at the moment is subject to all sorts of national restrictions and the subsidies to national airlines. It is in both of these areas that I am interested and whether you see any progress being made and, if not, who or what are the blockages?
  (Mr Darroch) The single sky is a framework directive with other legislation beneath it and it is about a single European air traffic management system. The advantage, as the Foreign Secretary has said, is that we believe that if it existed it would cut down delays and clear up and improve air traffic management across Europe and would have significant improvement for air passengers. It does not apply to the aircraft market, to air travel markets across Europe. That is a different process which is not for discussion at Barcelona but there is activity on that both in terms of internal EU air travel and in terms of external agreements with third countries.

  26. That is an area where, if there were liberalisation in that area, we would be going a long way to achieving some of these objectives of greater efficiencies within the European economy and competing with the United States economy, which has an almost entirely deregulated internal air traffic market. Do you see us making any progress on that aspect of the air traffic management?
  (Mr Darroch) You are right: it is not anything like as deregulated as the American market. We have been pushing for more deregulation. There has been some progress. I think average costs for air travel across Europe have come down a bit, but nothing like to American levels. I do not think it is something where you can expect immediate breakthrough but something which we support as the UK.

  27. You mention in here the better regulation agenda and the liberalisation of labour markets. I know that you are awaiting a report from the Commissioners at the Seville Summit. This is clearly an area in which, if one wants to reform labour markets, they have got to be more flexible and a lot has been done in this country and I think a lot of our economic success has been at least in part built on that. This is not just a question, is it, of stopping new regulations which impede labour market efficiency, but it is also a question of getting rid of some old ones? Do you see eventually this part of the agenda leading to the removal from the European statute book or directives which would enforce Member States to remove from their statute books restrictive labour market legislation?
  (Mr Straw) Personally I hope so, not only in the field of better regulation. In this speech, on which Sir John has honoured me by reading the fine details of, I also referred to an aspiration which I had not and have for some of the institutions of the European Union, including the Commission and the Parliament, and maybe a second chamber of that Parliament, having a duty (not necessarily a power) to scrutinise as it were the statute book and seeing two things: what could be jettisoned altogether, because the texts instruments had come to the end of their useful life, or cut back, and what could be passed to individual Member States. If it was the latter obviously it would then be a matter for them as to whether or not they continued to impose an excessive burden on their businesses. It ought to be a retrospective process as well as a prospective process.

  28. Finally, under this subject, what are the other areas where it seems to me this agenda could be advanced very considerably, as in removing and lowering a number of external tariffs that the European Union has, I think I am right in saying? When I asked somebody to produce for me a list of the tariffs, they said, "What do you mean, a list?" I said, "Exactly that", and he said, "I can give them to you on a CD because there are 15,000". I think I am still right in saying that there are something like 15,000 of these external tariffs, averaging somewhere around ten, 11, 12 per cent. Classic free trade theory would say that we should not just trade these with the rest of the world; we should remove them and that would enhance consumer living standards and the freedom and efficiency of trade. Is that part of your agenda?
  (Mr Straw) Yes, it is part of the United Kingdom's. Mr Darroch—I forget the job he has got—had to be able to take an unseen test of these 15,000 tariffs. He will let you know about them in a moment. It is one of the United Kingdom Government's very strong aspirations to see a removal of tariffs, particularly in agriculture and particularly against African producers.

  29. I think there were 15,000 three years ago when I asked this question and there still are about that number.
  (Mr Darroch) You are right that tariffs are too numerous and too high. They can be attacked in a number of ways. They can be attacked through the WTO round which was launched at Doha; they are being attacked through a proposal on EU trade relations with the developing world. There are a number of other areas in which these issues are addressed. It is not going to happen overnight and it is not particularly part of the Barcelona agenda except in the sense that general trade liberalisation is one of the four objectives of economic reform but it is being addressed in a number of specific policy areas.

  30. What you are saying is that all of these are being addressed but progress is mighty slow and it seems to me that the four or five things that I have asked you about are fundamental to making the European economy more efficient and raising the living standards of all of our citizens.
  (Mr Darroch) I agree.
  (Mr Straw) There is progress. Is progress as fast as we would have wished? No. Is it better than would have been the case without Lisbon? Yes.


  31. Foreign Secretary, the last area of questions in this section. Mr Solana was commissioned to produce a report designed to streamline the procedures of the Council irrespective of any more fundamental decisions being made at the Intergovernmental Conference. Has the report yet been produced?
  (Mr Darroch) It was issued on Monday.

  32. Have you checked what are the key differences between that report and the proposals set out in the joint letter from the Prime Minister and Chancellor Schröder?
  (Mr Darroch) It is not just the proposals in the Foreign Secretary's speech in The Hague or the Prime Minister's letter with Mr Schröder but both feature in the report, so it is those ideas plus other ideas that have been generated from inside the Council secretariat or other Member States.

  33. It would be helpful to have a note.
  (Mr Straw) We can get that done[5].

  Chairman: Thank you very much.

4   See Evidence, pp Ev 1-Ev 4. Back

5   See Evidence, pp Ev 10-Ev 13. Back

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