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Keith Vaz: I, too, congratulate the right hon. Gentleman on his elevation to the Front Bench yet again. He has spent eight minutes discussing the constitution and other such matters, which are not the concern of the crucial discussions that will take place this week. When will we hear about Conservative party policy on those issues?

Mr. Hague: The hon. Gentleman will hear plenty, but as the Foreign Secretary spent the last eight or nine minutes of his speech discussing Conservative MEPs in the European Parliament, the hon. Gentleman cannot lecture us about discussing matters that are relevant to the EU summit. These debates provide an opportunity to raise all issues about Europe.

Mr. Cash rose—

Mr. Hague: We cannot go through these debates without giving way regularly to my hon. Friend.

Mr. Cash: Following the remarks by the hon. Member for Leicester, East (Keith Vaz), is my right hon. Friend aware that the European reform forum has been taking evidence from not only the hon. Member for Leicester, East, but the right hon. Member for Rotherham (Mr. MacShane), my right hon. Friend the Member for Wokingham (Mr. Redwood), Will Hutton, Lord Owen and others with a view to achieving a reasonable analysis of what has been going wrong with the existing treaties, in order to form a clear basis on which to make policies that produce constructive answers to the questions that my right hon. Friend the
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Member for Richmond, Yorks (Mr. Hague) is rightly asking but which, regrettably, the Foreign Secretary simply ducked?

Mr. Hague: I am delighted that the hon. Member for Leicester, East (Keith Vaz) is playing a more constructive role outside the House than he played a few moments ago inside it—that is wonderful news.

It is common ground across the House that Europe faces a crisis—the Prime Minister used the word "crisis" in his address to the European Parliament in June—and massive demographic social and economic challenges. I believe that it is also common ground that the EU has so far shown few signs of being able to meet those challenges. When the Prime Minister came to this House to trumpet the Lisbon summit, he announced

along with a "fundamental reorientation" that would bring


Five years after all that, we find the Government calling plaintively for the implementation of the Lisbon agenda. The terrible truth of it all was laid bare by the report last year by Mr. Wim Kok and his distinguished colleagues, which pointed out that most of Lisbon had never been implemented, that as a result Europe was losing ground more quickly to the United States and Asia, that

and, as he ominously summed up:

The goal of the Lisbon agreement was to make Europe into the world's foremost knowledge-based economy by 2010. Now that we are halfway there, we can see that there is no prospect of being able to make such a claim in five years' time—far from it. Two studies in the past week have shown that European spending on research and development is falling further behind target and the gap with the United States and Japan is widening. Such figures are deeply disturbing, because it is obvious that, as European economies will not be able to compete with China and India on price or have a larger available work force, it is self-evidently vital that their capital must be used more intensively and productively if they are not to suffer severe economic consequences.

It is impossible to envisage Europe competing effectively without high levels of investment in R and D and the highest possible standards of higher education. Yet the United States is striding ahead in higher education-based research and now has 17 of the world's top 20 universities. The Prime Minister raised higher education as a matter of serious concern in his second speech to the European Parliament on 26 October and asked the Commission to prepare a report on it. But the Government must realise that, as the success of higher education in the United States relies on the use of much
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private capital, deregulation, and the use of the English language, we are as likely to find the answer to these issues in the European Commission as on the moon.

Anyone looking at the EU from outside, dispassionately and objectively, would think that tackling these issues at this and every summit would be the almost daily preoccupation of European leaders. Even according to the Commission's own forecasts, the European share of world economic output is set to be virtually halved in our lifetimes. The absence of any sense of urgency is remarkable and it is hard to see it as anything other than a collective dereliction of duty by Europe's leaders. Faced with a massive loss of relative economic strength, with profound consequences for the future of employment, prosperity and social cohesion and justice, the general response is indistinguishable from inertia and indifference.

Mr. Ian Austin (Dudley, North) (Lab): On leadership in Europe, what would the right hon. Gentleman say to the right hon. and learned Member for Rushcliffe (Mr. Clarke), who described his new leader's policy on Europe as "head banging"? What would he say to the Tory MEPs who said that it showed "bad judgment", would "create disunity", is "cloud cuckoo land", "absolute madness", "very curious", "barking", and "silly", and shows that he "knows nothing about it"?

Mr. Hague: It is interesting that when we try to discuss some of the greatest issues that will affect Europe in the future, the hon. Gentleman can only read out a party brief about Conservative MEPs in the European Parliament. I assure him that nothing will be more encouraging to my right hon. Friend the Leader of the Opposition and me in carrying out the policy than that great concern is expressed about it by Members from other parties in the House of Commons.

It is only fair to acknowledge—the Foreign Secretary made this point in his speech—that the Commission under Mr. Barroso has shown an increasing consciousness of such issues and, in a first tiny sign of hope, has managed to withdraw 68 pending proposals for legislation as part of a deregulation initiative. However, we must not get overexcited about that, as it turned out that one third of those withdrawn regulations were defunct association agreements with countries that have now joined the EU, and the total of 68 regulations withdrawn has to be set against the net increase of 4,806 regulations and directives over the past eight years alone.

To be fair to the Prime Minister, his speech to the European Parliament in June did call for a change of direction. He said there was

He is right. He questioned whether Lisbon was being implemented and whether the EU was in any way

He was clear that

and he said in ringing tones at the end that the people of Europe

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Subsequently, there has been astonishment in Europe that such bold rhetoric has been followed by so little initiative. While to us in Britain it is entirely normal to hear a brave speech by the Prime Minister that bears no resemblance to what follows, it comes as a shock to people in other countries. As the former President of Poland put it,

MEPs have apparently circulated missing persons notices featuring the Prime Minister's face, one of which said:

Everyone in this House should be aware of that, and the Prime Minister above all.

I doubt that Foreign Office Ministers can put their hands on their hearts and say that Britain is now more respected in Europe than six months ago, or that any seasoned commentator or other Government in Europe judges their presidency to have been a success. Indeed, it seems unlikely that even they would judge it a success, given the objectives that they originally set out for themselves.

This debate on Europe in the run-up to this summit is different from those on most previous occasions. We have often engaged in a fairly predictable debate—for and against the constitution, or the social chapter, or the euro, or whatever it may have been—but this time Government and Opposition agree that Europe faces an intensifying crisis, including a crisis of leadership, to use the Prime Minister's own words. The tragedy is that, for whatever reason, and with all the admitted constraints on what can be achieved in a period of a few months, the Government have not shown the consistency, energy and purpose necessary to have any hope of alleviating that crisis or changing prevailing attitudes. They have often claimed to be winning the argument in Europe, but there is little evidence of that.

One deeply depressing example of failing to win the argument is being played out in the world trade talks in Hong Kong. Could not the Government have given a stronger lead towards pushing the European Union into a position more committed to free and fair trade and assisting real progress in a way that would help developing countries? Has not the lack of any reform of the common agricultural policy become a major problem for world trade negotiations, as demonstrated by the statement by Peter Mandelson's spokesman that EU subsidies will not be reduced by "one cent"? Should not the EU be going much further towards reducing tariffs and export subsidies? Is it not depressing and disturbing for the Government when a Commissioner who was until recently one of their own colleagues attacks the idea of liberalisation and states his opposition to

I hope that when the Minister winds up he can say whether he considers that the Government have used all possible weight to influence the world trade talks in a
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way that would open up opportunities for developing countries without imposing over-stringent conditions on them and, if they have used such weight, why it has failed. Surely we did not join the EU to stand in the way of trade liberalisation and free trade. The Swedish Trade Minister said:

Why has so little been said?

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