Examination of Witnesses (Questions 20
- 33)
WEDNESDAY 13 MARCH 2002
THE RT
HON JACK
STRAW MP, PETER
RICKETTS CMG AND
MR KIM
DARROCH CMG
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.
Chairman
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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