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Mr. Peter Lilley (Hitchin and Harpenden) (Con) rose—

Angus Robertson rose—

Mr. Straw: I have already given way to the hon. Gentleman, so I give way to the right hon. Member for Hitchin and Harpenden (Mr. Lilley).

Mr. Lilley: The protocol states that the House will appoint one person and the other place will appoint another person to express our views, thereby enabling the House to have some say in European legislation. How would the House appoint one person, reflecting—as the protocol says—the balance of opinions in this place?

Mr. Straw: Although I have the full text with me, I hope that the right hon. Gentleman will excuse me if I do not look up that passage. However, if my recollection is wrong, I will write to him, and the Minister of the month, my right hon. Friend the Minister for Europe, who will wind up the debate, has my full permission to correct me. My recollection is that under the protocol in the draft constitutional treaty, draft laws would be made available to national Parliaments at an early stage. In fact, we already do that but it does not happen in many other national Parliaments. National Parliaments would then take a view on those draft laws. If they
 
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decided to disapprove of them, that would be communicated to the Commission, and if a third of the aggregate total of national Parliaments took that view, it would amount to a yellow card. The Commission would take that as a warning, and would have to think again. [Interruption.] For those who say, "What about a red card?", we discussed that a great deal in our debate on the detail of the constitutional treaty. The red card is an option for member states to exercise in the European Council under the voting system, which is rather antiquated at present, but would be improved by the constitutional treaty.

Angus Robertson: I support the scrutiny and openness embraced by the Foreign Secretary, but does he agree that a great first step by the House would be for the European Scrutiny Committee to meet in public, not in secret?

Mr. Straw: Whether or not the European Scrutiny Committee meets in public is a matter for it to decide. [Interruption.] With great respect, there is a division of powers. It is for Parliament to decide how it meets, not for Government.

Mr. William Cash (Stone) (Con): On a point of order, Mr. Deputy Speaker. The European Scrutiny Committee did not have the opportunity to make that decision, as it was taken away from it.

Mr. Deputy Speaker (Sir Alan Haselhurst): I think that the hon. Gentleman knows that that was not a point of order.

Mr. Straw: It never is, Mr. Deputy Speaker.

In seeking reform within the EU we must recognise the benefits of the Union and the importance of the United Kingdom's engagement within it. When we have engaged, the UK has shaped to our benefit the rules that allow British citizens to travel, work and live freely anywhere in Europe, and to receive welfare benefits, health care and fair legal protection while they are there. We have secured European liberalisation, which has slashed air fares and brought the cost of telephone calls down by half. UK and other European businesses once had to fill in 60 million customs forms a year simply to trade with Europe, with all the attendant bureaucracy and delay. Today, however, they can trade directly to the same standards and rules as local firms in a market of over 450 million consumers. EU police and justice co-operation is bringing drug smugglers, people traffickers and fraudsters to book. Alongside those practical benefits, our position as a leading power in Europe makes the UK stronger and more influential in the world, as we can speak as part of an organisation that accounts for a quarter of world wealth and trade, and more than half of all development aid.

It is obvious to everyone that this European Council marks the start of a difficult period of discussion about the European Union's future direction and priorities, but it also offers the chance for a serious, democratic and vital debate. The United Kingdom has a clear interest in shaping that debate and in leading reform in Europe. Under this Government, we shall play that role to the full.
 
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1.52 pm

Dr. Liam Fox (Woodspring) (Con): It is doubtful whether the individuals who organised the forthcoming summit foresaw that, following the decisive rejection of the proposed constitution by the Dutch and the French, it would become an historic event. After those two referendums, there has been much gnashing of Eurocrat teeth in the past few weeks, including by our new Commissioner, Peter Mandelson, who has set a new record for going native in Brussels. However, even diehards are starting to acknowledge the inevitable and bow to the fact that in a democratic Europe the clearly expressed wishes of voters must be respected and that the constitution is dead.

Others are in denial, pretending that nothing material has happened and that the process of ratification can still continue. The argument is that if people voted yes, they clearly understood the issues surrounding the constitution; but if they voted no, they did not understand the complexities and were voting against Chirac, Turkey, Polish plumbers or anything but the constitution.

We have been treated to a virtuoso performance by the EU political elites, who have shown how out of touch they are with the people whose interests they are supposed to serve. Today, the Foreign Secretary told us that there will not be a collective decision on the future of ratification. What a lack of leadership by European politicians. In the past week, we have been subject to the ritual brandishing of that favourite red herring, the British rebate. If one is in trouble in Euroland, why not indulge in ritual Brit-bashing, which is designed to deflect attention from one's own domestic political disaster and one's catastrophic misjudgment of one's own voters? We have read a huge amount of nonsense—how gullible much of the European media has been.

The real issue in Europe is the collapse of the constitution. There has never been a serious prospect of Britain unilaterally ditching the rebate, and even less chance of France negotiating away its common agricultural policy advantages to reopen the debate. Any British Prime Minister who voluntarily comprised Margaret Thatcher's hard-won veto would be treated with utter contempt by the British people. We know that, they know it, the Prime Minister knows it and President Chirac knows it. We are all knowledgeable, but it does not get us very far.

The summit comes not at a time of crisis for Europe, but at a time of enormous opportunity. French and Dutch voters have done us a great favour, as they have stopped in its tracks a constitution that would have taken Europe in entirely the wrong direction. As I said last week, perhaps the signing of the constitution by the Prime Minister and its other authors was the high-water mark of European integration. We now have a chance to develop a more flexible Europe that is more outward looking, less centralised, less bureaucratic, more trusting of national identity, and which is designed to be the servant, not the master, of its citizens. The House and the country need a realistic and balanced assessment of two key relationships—the relationship between the United Kingdom and the European Union, and the relationship between the European Union and the rest of the world.

We have moved from a century in which much of the world's conflict originated on the European continent to one in which war is unthinkable there. Membership of
 
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the European Union has had the effect of encouraging less stable aspirant countries to settle their differences. We have been able to welcome states from eastern Europe. We have also welcomed states, as the Minister for Europe said in a recent speech, with a different political history, such as Spain, Greece and Portugal—which suffered under right-wing tyrannies—into the family of European nations. The progress of the single market, albeit too slow, takes us in the right direction, but there is a terrible malaise in the European Union that cannot be ignored.

Too many European leaders still have a Eurocentric view of the world that is a generation out of date. As the Foreign Secretary noted, while the European Union gazes inwards, China, south Asia and the Americas continue to take an increased share of world markets, eroding opportunities for European prosperity and influence. It is not a coincidence that many more jobs have been created in the United States than in the European Union, or that the United States is still increasing its share of world trade. Social democratic policies on the continent are making Europe ever less competitive in an ever more competitive global economic environment. On a rapidly ageing continent, the omens are not good. As was said in our debate last week, by 2010 the EU's working-age population will begin a long-term decline. Over the next 40 years, the working-age populations of Germany, Italy and Spain will fall by about a third, which will have a major impact on the European economy. The EU's own financial projections are worse than the Foreign Secretary said, as they suggest that economic growth in Europe will be only half that of the United States between now and 2050. Projections show that the EU's share of global GDP will slump from 18 per cent. to just 10 per cent. by 2050, while America's share will rise from 23 per cent. to 26 per cent.

The problems are exacerbated by the willingness of too many European leaders to blame someone else for their country's economic woes. There is no point in French or German politicians blaming external factors for the dreadful performance of their economies. Unless they are willing to have the courage and commitment to introduce the supply-side economic reforms that Britain undertook under the Conservatives in the 1980s, they will consign yet another generation of young Europeans to structural unemployment, which is not an acceptable price for keeping European politicians inside their comfort zone.

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