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EU Constitution

5. Alistair Burt (North-East Bedfordshire) (Con): What assessment she has made of the impact that an EU constitution will have on the number of EU directives affecting UK industry. [195864]

The Secretary of State for Trade and Industry (Ms Patricia Hewitt): The constitution will have no impact on existing directives. As far as future directives are concerned, the constitution will strengthen the position of national Governments and Parliaments.

Alistair Burt: Is it not the case that because of the uncertain relationship between the decisions of the European courts and the constitution there is no credibility in what the Secretary of State says? Because of that lack of credibility and the Government's track record of an increase in regulation of more than 50 per cent., it is no wonder that in a recent poll of 1,000 chief executives about the impact of the European
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constitution, 59 per cent. said that it will be bad for business. Some 64 per cent. of members of the CBI also say that it will be bad for business. Is it not that track record and the failure to address regulation that make businesses in my constituency and elsewhere think that the Government are all talk on deregulation?

Ms Hewitt: Let me give the hon. Gentleman just one example of the many actions we have taken to improve the climate for business people in Britain—leaving aside the enormous achievement of economic stability. Twelve years ago, the then Prime Minister told the Conservative party conference that

Now, thanks to our Government, people can set up a business with one form in less than a day for £25. Every global benchmarking survey shows that we are one of the best countries in the world in which to set up and grow a business. We are determined to go on improving that by continuing to simplify and improve regulation. The new constitution will strengthen our hand, just as the new Commission will, in achieving better regulation and economic reform in Europe.

Mr. Barry Sheerman (Huddersfield) (Lab/Co-op): Will my right hon. Friend attack even more vigorously the mealy-mouthed nonsense from the Opposition? Our future prosperity lies with Europe, but the Opposition constantly deride Europe and directives that have improved our environment and the lives of people in this country. Let us go on the attack and tell people the truth about our EU membership.

Ms Hewitt: I am grateful to my hon. Friend for giving me the opportunity and I am delighted to take it. The consequence of the Conservative position on the constitution—and the intention of many Conservative Members—would be to sideline the UK within Europe, to put us at the margins or even on the road to withdrawal. That would put us in the same position as Norway and Norwegian businesses, which have to comply with European directives but have no say in what they contain. I remind Conservative Members of how the new constitution—on which we secured all our goals—is viewed in the rest of Europe. As Le Monde correctly said in June:

it must have had the Conservatives in mind—

It will be good for Europe and good for Britain.

Mr. Speaker: May I remind the Secretary of State that I must get through the business on the Order Paper, and I need some help?

Mr. Stephen O'Brien (Eddisbury) (Con): According to the Treasury, about 50 per cent. of all regulations with a significant impact on business derive from the EU. Does the Secretary of State agree with the Chancellor, her colleague, who now believes that the level of regulation coming from the EU is "unacceptable"? Does she think that EU regulation will increase or decrease in the light of the Labour Government signing up to the European constitution?
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Ms Hewitt: I always agree with my right hon. Friend the Chancellor, and it is because we are so determined to get better regulations in Europe that we support the constitution and economic reform. We have won the argument across all European member states that we need simpler, better regulation, and we have got a programme of work to deliver that.

Mr. O'Brien: The Prime Minister's former chief economic adviser—a man whose advice the Prime Minister told us last week he always took seriously—recently lamented the fact that the EU constitution

Under Labour, the UK has plummeted from 13th in 1997 to 30th place this year in global rankings of the burden of Government regulation. Will the Secretary of State now look those in British business in the eye and tell them when her addiction to signing up to more EU regulations made British business more competitive?

Ms Hewitt: I remind the hon. Gentleman that the right hon. Member for Wokingham (Mr. Redwood) recently said that the UK is one of the best places in the world to do business. That is indeed true, and we will go on simplifying and improving regulation, both domestically and in Europe, but unlike the Conservative party we recognise the enormous benefits to the British people that come from our membership of the EU, including—to name just a few—cleaner beaches, cheaper telephones and cheaper holidays.

Mr. Michael Clapham (Barnsley, West and Penistone) (Lab): Is it not correct to say that the UK has less labour market and product regulation than any other country in the OECD and that it has greater labour utilisation than most other countries in the EU and is only behind Japan and America? What discussions has my right hon. Friend had with the TUC regarding security in a flexible market?

Ms Hewitt: My hon. Friend makes an extremely important point. The UK has the best economic record of all the G7 countries for growth, economic stability and, crucially, employment. I draw the House's attention to the recent World Bank study of 145 countries that placed the UK top in the EU, with the best business conditions, because the UK regulates in less costly and burdensome ways than other countries.

Economic Partnership Agreements

6. Mr. Alistair Carmichael (Orkney and Shetland) (LD): If she will make a statement on the development of economic partnership agreements between the European Union and poor countries. [195865]

The Minister for Trade and Investment (Mr. Douglas Alexander): Negotiations of economic partnership agreements between the EU and the African, Caribbean and Pacific countries were launched earlier this year. Substantive negotiations are due to start early in the new year and to be concluded by the end of 2007. While the negotiations are at a very early stage, we will continue to work with the European Commission, other member states and ACP countries to ensure that those agreements deliver their development potential.
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Mr. Carmichael: I thank the Minister for that answer. He will be aware of the fears expressed by Christian Aid, among others, that economic partnership agreements will force ACP countries to open their markets to unequal competition with the EU. Indeed, the Commission's own impact assessment of EPAs concludes that they could threaten the development of a modern industrial sector and result in social instability in some of the world's poorest countries. What will the Government do to ensure that the needs of poor people in developing countries are put first and not overridden by a trade liberalisation agenda?

Mr. Alexander: I share the hon. Gentleman's concern and commitment on these issues, and I look forward to discussing them at Christian Aid's national Scottish conference this Saturday.

On the specific issue that the hon. Gentleman raises, I emphasise that we are at a very early stage in the negotiations, but I wish to make two brief points. First, under the current system of trade preferences, such agreements are not compatible with World Trade Organisation rules, so change must occur. Secondly, I emphasise that the reciprocity that we are obliged to consider as part of those agreements is not the same as a symmetric opening, and in that sense developing countries have far more time to open markets than is suggested by the expectation about when the EU would open them—but, as I say, the negotiations continue.

Hugh Bayley (City of York) (Lab): Does my hon. Friend agree that in the interests of policy coherence it is important to couple the EU's economic partnership agreements with reform of the common agricultural policy, because unless we reduce subsidies on our domestic agriculture and, most importantly, remove export subsidies, the products that the poorest countries are most able to export will still be unable to enter our markets?

Mr. Alexander: I am in full agreement with my hon. Friend. He can look back to the success that we enjoyed at Geneva in July when we achieved a framework for the Doha development agreement, contrary to the pessimism expressed after Cancun. One of the keys that unlocked that agreement was the EU's movement on export subsidies. The challenge now is to achieve the parallelism that was contingent on the agreement—we need a similar response from the United States, and clearly the new trade commissioner will take that forward. If there is scope for further progress, we are determined to be at the forefront.

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