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We have discussed all sorts of issues today, and in the time remaining to me I want to cover a couple of them, the first of which is the structure and spending of the EU itself. The accounts have failed 11 years in a row, which is not a good starting point in trying to win over hearts and minds regarding what goes on in Brussels. There are two Parliaments, which is ridiculous and a colossal waste of money, and does not make people enamoured of the running of that democratic process.
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Regional assemblies and regional development agencies are ideas that stemmed from Brussels. They have been imposed on the UK without our having a say in the matter. In Bournemouth, Dorset and the south-west in general, regional assemblies are having a hugely negative impact. They are imposing development plans and building 20,000 houses in our area, without our having any say. That structure has been imposed on the south-west, thereby taking power away from local authorities, simply in order to fit into a European model that I do not agree with at all.

My hon. Friend the Member for Buckingham (John Bercow) made an interesting speech in which the discussed further integration on defence matters. He mentioned sharing defence technology. The French Leclerc, the German Leopard, the British Challenger and the American Abrams tanks are all made by different companies, and they are made better because those companies compete with each other. That point must be reconciled with my hon. Friend’s desire for greater integration. I am very concerned that there is a huge overlap—the Minister for Europe, who is back in his place, was partly responsible for that—between what NATO and EUFOR are doing. We cannot have 60,000 troops ready to move as a rapid reaction force without taking away from NATO’s ability. I am not saying that the EU does not have a role to play in, for example, peacekeeping, which it is doing in certain areas, but it cannot participate in war fighting or launching a rapid reaction ability, without jeopardising the current NATO set-up.

A great example of that point is Sudan. There is not only a NATO operation with 60 or 70 troops, but—just down the road—an EU operation. They are both sending messages back to different locations in Brussels, both doing exactly the same thing. That is a complete waste of effort. Afghanistan is another example, with EU operations mimicking what NATO is doing. The EU could work much more positively, as I have suggested to the Minister before, by co-ordinating international development. It could do that in a way that no other country or organisation can. The UN is no good at that, because it does not have the might. The EU is sitting on a ton of money; it could co-ordinate the US aid money and all the other international development pots. We are failing in Afghanistan partly because of the lack of co-ordination between the international development groups. The EU could take the lead if it had a robust level of authority and people were allowed to work only through it. That would be a positive role for the EU.

We have talked about climate change, but as there are time limits, I will not touch on that issue. On the issue of energy, I suggested to the Minister when we had the presidency of the EU that a low-lying fruit that we could easily have plucked was the creation of a common gas market. That would have protected gas prices in the UK. Every time there is a problem in Russia, it ripples across Europe and affects gas prices for all our constituents in a way that we cannot control. The Germans can control what happens, because they own most of the infrastructure.

John Bercow: I agree with the point that my hon. Friend has just made about the gas market, and there would probably be a strong consensus on that point.
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However, I am interested to know why he thinks that the present rotating presidency constitutes perfection.

Mr. Ellwood: I shall have to discuss that later with my hon. Friend, as I want to make my final points. He tempts me to return to the detail of the structure of the EU, but I have some other points to make in the remaining time.

The Galileo satellite system is another example of a massive project that is failing. We are trying to mimic the US global positioning system because the French have pushed for that. It is clear from last month’s talks that we have lost the funding for the project.

This debate has focused on the summit, but it has also proved that we have wasted two years and Germany is now seizing the initiative. The 27 nations have much in common, but we are also very different. The challenge is where to draw the line. We have mutual interests and they must be maximised without threatening individual authority. I hope that the Foreign Secretary has listened to the debate, and that if a constitution is put before the UK we will have an opportunity to vote in a referendum. Until we finally agree what the EU is really for, how much power it should have, and what the limits on that power should be, we will continue to have a tug of war between states, leaders and parties, inhibiting Europe from reaching its full potential.

5.44 pm

Mr. Philip Dunne (Ludlow) (Con): I welcome this debate for two reasons. First, I made my maiden speech in a European debate immediately after the Dutch and French referendum results. I have not had an opportunity to speak on the issue since, although it is a matter of considerable concern to a minority of people in this country. Those who hold views about it do so very strongly, as has been evident from this debate.

Secondly, I welcome the debate because today is the first time that the Government have been prepared to engage in discussion on their negotiating stance before the summit that begins tomorrow. That is in stark contrast to the approach adopted by many other European Governments. I was recently in Denmark with the Public Accounts Committee, and we had the opportunity to meet the Danish Parliament’s EU scrutiny committee. Its chairman told us that the responsible Minister attends the committee every month to brief its members on the Danish stance as negotiations take place. That seems an entirely appropriate way to inform those in the Danish Parliament with an interest in the subject, and it is very regrettable that this Foreign Secretary in particular has chosen to duck the issue and to refuse to discuss it at all.

Mr. Paul Keetch (Hereford) (LD): It is not my job to defend the Foreign Secretary, but I must point out that she appeared before the Foreign Affairs Committee for two hours yesterday. Some of the hon. Gentleman’s colleagues were present. In addition, she appeared —I think last week—before the European Scrutiny Committee.

Mr. Dunne: I accept what the hon. Gentleman says about the Foreign Secretary’s actions in the past two weeks, but they are very belated. We have been trying
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to establish the Government’s position for two years, and this is the first time that the right hon. Lady has been prepared to discuss it in this Chamber. She has been challenged previously on the matter at Foreign Office questions, and she has declined any opportunity for debate.

We know why the Government have been reluctant to get involved in debate on these matters, and their flip-flopping in respect of Europe was well illustrated earlier by my right hon. Friend the shadow Foreign Secretary. It has become apparent that there is open disagreement between the Prime Minister, the next Prime Minister and the Minister for Europe about whether there should be a referendum, and, if so, on what basis. The Government’s position seems to change from week to week.

I want to focus on some of the points that the Foreign Secretary made about the constitutional implications of the proposed treaty and the need for a referendum. She said that she supported having a full-time chairman of the European Council, with the current powers. She could not bring herself to use the word “president”, but my concern is that any move to having a full-time president appointed for, say, the two and a half years set out in the original constitutional treaty would have a profound impact on the conduct of EU business, and on the influence of member states on the determination of future policy.

Having a full-time chairman of the Council would also instantly remove the revolving presidency. Views are divided about whether that is an efficient way to conduct business in Europe, but it provides a focus for each country, when it assumes the presidency, to get engaged in Europe and to identify its priorities in trying to change and progress the European agenda. To give credit where it is due, the Prime Minister moved Africa and the millennium development goals up the European agenda, something that might not have happened had we not had the presidency, but the ability to do such things would disappear if a full-time president were appointed.

A president of the Council would have no direct link to the electorate in any member state. Inevitably, that would serve to institutionalise the post and render it bureaucratic and centralised, lacking the legitimacy provided by election. In addition, and by definition, the person performing the role would not be allowed to hold a current national office. That means that he or she would be either retired, or recently rejected by national voters.

The president would have power over the some 3,500 civil servants in the Brussels bureaucracy. Inevitably, that would tend to accrete power to the role, as the postholder would seek to direct the civil service to do more. That is an unavoidable consequence when a bureaucracy has a figurehead who is essentially responsible for managing that bureaucracy and who would not be rotated out of position regularly.

The post of president would fundamentally change the nature of the legislative process in Brussels, with individual member states no longer taking the lead in negotiating with others over issues that come before the Council. Legislation would be developed between the Commission and the Council, with member states having only a tangential relationship to the process.

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My second point relates to the Foreign Secretary’s comments about a common foreign and security policy. She said that the Government were supportive of such a policy, but she indicated that it would need to be achieved by unanimity, which sounds like shorthand for accepting the notion of an EU Foreign Minister and, as we read yesterday in the Financial Times, that is confirmed by the Spanish Minister for Europe who said:

If that goes through, it sounds as though the Government will support that position.

What would be the consequences if we had an EU Foreign Minister? It would give the Commission a foreign policy role long opposed by British Governments from both sides. The scope for divergent views would gradually be eroded, despite what the Foreign Secretary said, because the original treaty proposed that the Foreign Minister should have power to make proposals by majority decision rather than by unanimity; to run a powerful EU diplomatic service, which would undoubtedly try to take over the responsibilities of our diplomatic representation; and to speak for members at key international meetings such as the United Nations Security Council. The post itself would put pressure on all those aspects of British Foreign Office representation internationally, which would be difficult to resist. In the past, the Government have always resisted such proposals, but they were prepared to give way at the time of the last constitutional treaty.

Daniel Kawczynski: I am grateful to my hon. Friend and Shropshire neighbour for giving way. Does he agree that, because of our historical relationship with Commonwealth countries, it is extremely important that we retain foreign policy decisions for the House and the Foreign Secretary?

Mr. Dunne: My hon. Friend and neighbour makes an interesting point. The interests of the Commonwealth are of relatively little importance for other European member states; it is for our Government to stand up for the Commonwealth in international forums, and that representation would be lost if the powers of our Foreign Secretaries were gradually transferred to an EU Foreign Minister over time.

My third point is about the UK veto and blocking powers. The Foreign Secretary talked about support for measures for improving efficiency and subsidiarity, and I am sure that almost everybody in the Chamber would sign up to those. Our concern is how they would translate into practice. The proposal in the original constitutional treaty was to reduce the ability of member states to block legislative proposals they opposed, and that treaty would have done so by approximately a third. At present, there are three hurdles to overcome before securing the passage of legislation: 72 per cent. of weighted votes in Council, plus 62 per cent. of population plus 50 per cent. of member states. The constitutional treaty proposed scrapping one of the hurdles to leave only two: 65 per cent. of population and 55 per cent. of member states.
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By definition, that would inevitably make it harder for a country—even a large member state such as the UK—to block measures that it felt were not in its national interest.

Although the procedures of the European Commission may need some strengthening, it is of concern that we are considering watering down our ability to protect British interests, in particular as they affect British business, where there may be conflicts between one member state and another—between large and small countries or particular styles of conducting business.

Three aspects apply and I shall touch on them briefly. The first is the UK’s derogation from the 48-hour working week. A number of countries, notably France and Spain, and the Commission itself want to scrap the derogation. The Department of Trade and Industry has estimated that the cost to the economy of losing our ability to derogate from the 48-hour working week would be £9 billion a year.

The second point relates to a measure that has recently gone through and will come into force later this year. In the financial services sector, London has overtaken New York as the global capital of finance and has a far more significant role to play than any other capital in Europe—in fact, I think that I am right in saying, than all other capitals in Europe combined. London has by far the biggest influence over the financial markets. The markets in financial instruments directive was significantly amended as a result of the stance that the British Government were able to take. Had the procedures for making decisions been watered down, it might well have been impossible to have secured those amendments. That would have damaged our financial community.

The third issue, which is topical, is the temporary workers directive. The UK has some 700,000 more temporary workers than any other country in Europe. The British Chambers of Commerce has said that if states seek to force through equal rights for temporary workers—compared with full-time workers—that will have a significant impact on reducing employment in this country in particular.

Yesterday, the president of the CBI, Richard Lambert, was quoted as saying that the revamped constitution poses a major threat to Britain’s labour laws and commercial ethos. He referred in particular to the charter of fundamental rights. That has been characterised as a red line of the Prime Minister’s. However, as was said earlier—notably by my hon. Friend the Member for Stone (Mr. Cash)—there are aspects of the charter of fundamental rights that are already capable of being enshrined in English law. Mr. Lambert said:

He continued:

That could, for example, extend to cross-border picketing and the like—not something that anybody in business in this country would welcome.

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In conclusion, the arguments that the Government are making in relation to the referendum are extraordinarily convoluted and confused. In 2004, the Prime Minister argued that the original treaty did not change the fundamental relationship between the UK and the EU, but he still accepted that there was a need for a referendum. Today and last week, the Foreign Secretary argued precisely the opposite in relation to the treaty, to justify a referendum.

According to the next Prime Minister, only if the Government are defeated in their negotiations will he sanction a referendum. That just shows that in 2004 the referendum was granted by the Prime Minister purely for reasons of political expediency. The refusal now to hold a referendum shows the Government’s disdain for the people. While travelling round the country, the next Prime Minister has been claiming that he wants to listen to the people. He should have the courage to do so and allow a referendum if there is any transfer of power to Brussels through the treaty.

5.58 pm

Mr. James Clappison (Hertsmere) (Con): I am pleased to be called to speak in the debate. I must apologise to you and the House for not being present throughout, Madam Deputy Speaker. Among other things, I have been speaking in an Adjournment debate concerning a matter in Hertfordshire on which many thousands of my constituents have written to me.

I am pleased to have this opportunity to speak because, beyond any doubt, I feel that there are highly significant constitutional issues at stake—on any view of the situation. The Commission and other member states are seeking significant constitutional changes and our own Prime Minister has been talking of the red lines that he is going to adopt in response. It is absolutely right that we should debate the proposed changes in the House.

I also believe that an issue of trust is at stake. There is a perception in some quarters that there is a need to restore trust in government. We have heard a little about that—we might hear more. The question of the referendum touches on the issue of trust. My hon. Friend the Member for Ludlow (Mr. Dunne) rightly reminded the House that the Prime Minister promised the country a referendum on the constitutional treaty in April 2004. It is worth bearing in mind the fact that the referendum was promised no matter what happened in other countries that voted on the treaty beforehand. When my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) asked whether a no vote in a “small country” would stop the referendum, the Prime Minister said:

There have been two no votes in member states, and the promise has come and gone.

The Government now accept that there should be a referendum if negotiations lead to a new treaty that has the “characteristics of a constitution”. The Government seem to have adopted that key phrase, which has been repeated by both the Prime Minister and the Foreign Secretary, as the criterion against which the need for a referendum should be judged.

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Mr. Cash: Does my hon. Friend agree that this relates to what the Prime Minister has described as the structural relationship between the United Kingdom—the Government and Parliament—and Europe? The very fact that the mandate proposals would merge the treaties into one would mean that the structure would be changed because that would affect the pillars, majority voting and the whole basis on which the system functions.

Mr. Clappison: My hon. Friend has a distinctive view on Europe and a great interest in it. There are differing opinions on Europe. However, whatever one’s opinion and past views on Europe, people should stop to listen to my hon. Friend’s points about the constitutional consequences of the treaty and the effect that it will have on the relationship between the House and our country, and Europe and the European institutions. The matter should give people cause to stop and think, as I shall point out in my own way. I agree unreservedly with my hon. Friend.

What are the “characteristics of a constitution”? I am tempted to say that the Government’s approach seems to be that they will know the characteristics when they see them, but they have been a little more forthcoming in the past. The previous Foreign Secretary, the right hon. Member for Blackburn (Mr. Straw), was asked that very question in June 2005 when the Government were setting out the course that they proposed to take following the no votes in France and the Netherlands. His colleague the hon. Member for Vauxhall (Kate Hoey), who has attended today’s debate, asked him whether any future agreement that resulted in the establishment of an EU president and an EU Foreign Minister would have the characteristics of a constitution. The then Foreign Secretary was quite open, saying:

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