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The Minister for Europe (Mr. Douglas Alexander): I thank my hon. Friend the Member for Leicester, East (Keith Vaz) for bringing this important issue to the attention of the House this evening, particularly at a time when the European Union's future is being vigorously debated not only in this country, but right across Europe. As those of us present will all recognise, my hon. Friend has been an assiduous and tireless campaigner on behalf of reform in the EU not only to make it work better, but to make it more open and
 
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accessible to all its citizens. He is joined in his experience and expertise by my predecessor, my hon. Friend the Member for Rotherham (Mr. MacShane), and I want to take this opportunity to place on the record my gratitude for his work during his time in the Foreign Office.

I am acutely conscious that what we may lack in numbers this evening, we make up for in quality. I pay tribute to my right hon. Friend the Member for Livingston (Mr. Cook), who also has an outstanding record in supporting the case for reform in the EU. It is of course commonplace to acknowledge that Britain's relationship with the EU has been one of the most strongly debated issues in this Chamber. As the new Europe takes shape, it is vital that the debate on Britain's place within it should extend outside this House and across the country.

As Europe expands and the world shrinks through globalisation, we need to ensure that the EU is equipped to continue to deliver security and prosperity to its citizens, and to meet the challenges of a globalising world. That is what the new constitutional treaty sets out to do, and it is what the debate—across Europe at this time—is about. There are sharply divided views, as the French and Dutch referendum campaigns are showing. I would argue, however, that Britain's security and prosperity are inextricably linked to Europe. It is thus clearly in our national interest to do all that we can to ensure that the EU continues to deliver prosperity to us and to all the citizens of Europe.

In a speech in the City last Friday, I said that if Britain is to take the right decision on the future of Europe and on Britain's central role in shaping that future, we must have an informed debate based on facts, not myth. I was delighted to hear those sentiments echoed in the speech of my hon. Friend the Member for Leicester, East this evening, and I welcome the opportunity provided by this evening's debate to set out the practical benefits to Britain of our membership of the EU, and our objectives for our forthcoming presidency.

The UK's economic growth is closely linked to our EU membership and to the trading opportunities afforded by the single market. In 2002, EU gross domestic product was 1.8 per cent.—or £110 billion more than it would have been without the single market. That represents a benefit of £20 billion to the UK economy alone. Almost 60 per cent. of our trade is with Europe. Some 3 million jobs in the UK are linked—directly or indirectly—to the export of goods and services to the EU, and some 750,000 British-based companies trade across the EU. The removal of internal frontier controls has saved EU businesses billions of euros. The abolition of customs duties alone saves British businesses an estimated £135 million a year. Without delays at frontiers, delivery times are much shorter, so manufacturers can save money and reduce prices for European consumers.

As my hon. Friend the Member for Leicester, East said, competition within the single market has almost halved the cost of phone calls and air fares. EU membership benefits both businesses and citizens alike.

Rigorous EU standards mean that goods and services manufactured and traded within the EU are of the highest quality and afford the most safety to consumers. The air we breathe and the water we drink are infinitely
 
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cleaner and healthier thanks to tough environmental standards; industrial emissions of toxic substances, such as lead and mercury, have declined significantly; dangerous pesticides and chemicals have been banned; and better waste water and sewage treatment have cleaned up rivers and lakes. Nearly all the UK's beaches and rivers now meet high EU standards.

It is easy to take those benefits for granted now, and because they are good news stories we rarely hear about them in the newspapers. However, they matter to us all, so we must raise the level of awareness here in the UK that it is thanks to our EU membership that we can enjoy such a high quality of life.

Security in our homes and on our streets is central to quality of life in communities represented by hon. Members on both sides of this House. Co-operation among EU police forces and criminal justice authorities, through Europol and Eurojust, means that we can tackle international crime, drug smuggling and illegal immigration much more effectively than simply proceeding on the basis of our own national police force.

In 2005, some 32 years after our accession to the European Economic Community, the EU faces a new and very different world, and the EU, which now contains 25 member states and 450 million consumers and citizens, is a different organisation. The EU needs to adapt and change to meet the challenges of a hugely expanded Union and an increasingly competitive global marketplace. It needs to be more open and, frankly, less rigid.

In 2000, EU leaders committed themselves to an ambitious 10-year programme of far-reaching economic reform to make the EU the most competitive and dynamic knowledge-based economy in the world by 2010. I pay tribute to the former Foreign Secretary, my right hon. Friend the Member for Livingston, and to my hon. Friend the Member for Leicester, East for their work in advancing the so-called Lisbon strategy. The UK has led the way in pushing forward the Lisbon agenda. As my hon. Friend the Member for Leicester, East said and the Kok report pointed out, however, 2005 marks the halfway point in the strategy. Some progress has been made, but it is clear that much more needs to be done to meet the targets identified in Lisbon in 2000.

We must and will take forward the Lisbon agenda. My right hon. Friend the Member for Livingston knows the importance of that agenda, which will be a key priority for the UK during our forthcoming EU presidency. We welcome the support of President Barroso, who has already shown a strong lead on economic reform during his time as President of the European Commission. The focus on employment is right, because the EU needs more flexible labour markets. We must ensure that every proposal for new legislation is subject to a rigorous assessment of its impact on jobs, competitiveness and the wider case for growth within Europe.

We need to strike a balance between protecting workers, ensuring routes into the labour market for vulnerable workers and maintaining sufficient flexibility for business. We will focus on improving the assessment of new legislative proposals to ensure that such
 
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proposals encourage and do not stifle growth, on simplifying existing EU rules and on promoting the greater use of alternatives to regulation.

We will also work to strengthen the single market and to make progress on a single market for services. The services sector represents 60 per cent. of EU GDP, and extending the internal market to the services sector will be enormously important to business and consumers alike.

In the financial services sector, our focus will be on completing the financial services action plan in a way   that protects and promotes UK and EU competitiveness.

Security will be another key priority for our EU presidency. In a world in which criminals and terrorists operate across national borders, justice and security for British citizens increasingly requires enhanced EU co-operation between police forces and judicial authorities. In the next six months, the UK presidency will take forward EU measures to improve the exchange of law enforcement information and ongoing work to conclude re-admission agreements with countries outside the EU. We will also work to agree a new long-term agenda for the Union's counter-terrorism efforts.

It is an ambitious agenda, but it is not that of the UK alone. It is the agenda of the whole Union, defined by all the member states working with the Commission and the democratically elected European Parliament, in all our interests. We hope that we can take it forward effectively and deliver real, practical results for the people of Europe. We will do so as we take forward and ensure a better understanding among the people of Britain and a better awareness of what the European Union achieves for its people: that is to say, greater prosperity and security. Through reasoned debate and a clear demonstration of the facts, we will show why the new constitutional treaty is the right treaty for Britain and the right treaty for Europe.

On the rebate, I can assure my hon. Friend that I have discussed that in recent days with my right hon. Friends the Chancellor of the Exchequer and the Foreign Secretary. Indeed, I was present with my right hon. Friend the Foreign Secretary in Brussels at the General Affairs and External Relations Council on Monday. Suffice to say that I fully stand by the strong statements that have been made by both my right hon. Friends in relation to the rebate.

The constitutional treaty as drafted confirms Britain's position of strength in Europe and delivers our vision of a flexible, wider EU. It will make the new Europe of 25 nations work more effectively, as we heard this evening, with simpler decision making and greater accountability. It will be more open and, we would argue, more democratic. For the first time, as Members will know, the treaty will allow national Parliaments to have a direct say in most draft EU laws. New legislative proposals from the European Commission will be sent to national Parliaments for comments. Where there are concerns on subsidiarity, Parliaments can send the proposals back. If one third of national parliaments believe that the issue should be for national, not European, law, the Commission must withdraw the proposal.
 
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The treaty creates a full-time President of the European Council, appointed by and accountable to national Governments. The President will set the EU's   agenda and represent the views of national Governments. The treaty will make the EU more efficient. For example, the size of the Commission will be reduced by one third by 2014.

Voting will be simpler and fairer. The UK's voting power will increase because the size of the population now counts. The treaty provides for majority voting where we want it most: for the single market, for reform of the common agricultural policy, and for security issues, including action against international crime and terrorism. But on questions of tax, social security, foreign policy, defence and financing of the Union, at UK insistence decisions can be taken only by unanimity.


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