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“notes that the Government demanded the deletion of a new article on energy when it was first proposed as part of the EU Constitution; further notes that the Government’s explanation was that ‘this provision is unnecessary as all aspects of energy policy are effectively covered elsewhere in the Treaty e.g. single market, environment’; believes that the Government’s position then was right and remains valid; and accordingly rejects the
Government’s current policy towards the Treaty of Lisbon in respect of provisions concerning energy.”
Unlike the Secretary of State, I can start by saying, “Here’s one I prepared earlier.” However, once he got his script, I—and, I suspect, others in the House—sensed that his heart was not quite in what he was saying and that he had not really understood the implications of the treaty that he attempts to defend today.
The treaty represents failure—a massive failure of political will, a total failure of negotiating wit and a complete failure to keep the promises that the Government made to the British people in what, morally, was a binding manifesto commitment to submit the treaty to a referendum. The treaty is a duplicitous document, as has readily been admitted in the media by the author of the constitution, Mr. Valéry Giscard d’Estaing, the former Italian Prime Minister and the Belgian Foreign Minister. They have all claimed that the treaty is designed to be “illisible”, “illeggibile” and whatever the Flemish is for deliberately unintelligible gobbledygook.
Mr. Peter Lilley (Hitchin and Harpenden) (Con): Double Dutch.
Alan Duncan: I am grateful to my right hon. Friend for his astute clarification—double Dutch it indeed is.
Blinding us with techno-babble is a deliberate ploy to obfuscate the real intentions behind the treaty, which are exactly the same as those of the constitution: gathering power into the centre of Brussels, removing flexibility and ignoring the voice of its citizens, and assuming all the rights of power, but without any of its democratic responsibilities. This is neither the outward-looking, flexible European project that we wish to see, nor the project that we were promised.
Today it has fallen to us to examine the articles in the treaty that explicitly cover energy. In the spirit of the rest of the document, these sections are oblique, mysterious and evasive. Their very existence points to a murky process at the heart of Brussels which casts a shadow over the entire mechanism of decision making in the Commission, and, far more damaging, to the utter ineptitude represented by the Government’s inability—in the phrase of one of my favourite Ministers, Lord Jones of Birmingham—to bang the drum for Britain.
The Government have said that we need these articles to drive forward the liberalisation of the European energy market. That is a bogus argument, for one critical reason that we have already touched on today: the European Commission already has the legal base on which to make progress on liberalisation, contained in the single-market provisions and in the 40 or 50 existing directives on energy.
Steve Webb: The hon. Member for Wolverhampton, South-West (Rob Marris) put his finger on it when he said that even if the hon. Gentleman were right, he would have to prove something more than that the EU can do these things already—namely that what is proposed is harmful. Can he tell us, in a nutshell, what is harmful about the change that is proposed?
Alan Duncan: That is a completely bogus somersault of an argument, which I do not accept. I shall come on to why what is in the treaty is, in my view, harmful, but it does not necessarily relate to the simple aspects of liberalisation.
Only last September, the Commission published the third tier of its liberalisation proposals. Let me confess openly that we agreed with what it said. There were two options on the table: they were, in fact, the EU’s most aggressive proposals so far. If we require proof of their potential effectiveness, it is that they are vigorously opposed by the French and German Governments, neither of whom operate the liberal, free-flowing energy market that we operate in Britain.
The Government’s claim that this will all help the progress of market liberalisation looks even more specious when we consider that one of the most fundamental clauses in the foundation treaty—that on competition, which calls for an internal market
“where competition is free and undistorted”
—has been deleted at the behest of Mr. Sarkozy. Far the most astonishing aspect of the whole process is the fact that our feeble ministerial negotiators have returned to the House waving a sheet of paper, flushed with triumph and boasting of a new era for Europe, but with one of the most crucial planks of competition policy axed by the French, thus leaving us vulnerable to the protectionist instincts of some of the EU’s member states.
The Government’s position would be comic if it were not so serious. The great paradox is that while they proclaim that these unnecessary articles on energy will drive liberalisation further, they have failed to prevent the removal of a clause that shores up one of the Union’s greatest strengths since its inception: the dynamic and competitive internal market.
Let us turn to the treaty itself, and examine further exactly what it says about energy and what it might actually mean. As always with these labyrinthine manuscripts, the devil is in the detail. The House does not have a magnificent record when it comes to scrutiny of European legislation, and true to form the Government have not given us anything like enough time for informed debate, but we must make do with what we have.
The treaty establishes energy as a “shared competence”. That is in the new articles 2A to 2E that the treaty of Lisbon inserts into the treaty of Rome. No such relationship currently exists between the Union and member states—there is merely a reference in the Rome treaty to “passing measures” on energy—so, for the sake of clarity, we should reiterate what we mean by “shared competence”, lest there be any confusion about the extent to which this changes our relationship with Brussels in matters of energy.
Reference to areas under shared competence means that the EU and member states may both adopt legislation, but that member states have freedom to do so only to the extent that the EU has not. In practice, that means that in the eyes of the EU and its legal order it is European law, not the laws of individual member states, that will enjoy supremacy. The word “supremacy” itself may not be in the treaty, but the principle of superiority— [Interruption.] The Minister for Europe may well laugh. This is the deceit about which the whole country gets so angry: ministerial assurances, if that is what that chuckle meant, count for so little. In the end it is the words in the treaty that matter, not the scoffing of the Minister.
As I was saying, although the word “supremacy” may not be in the treaty, the principle of superiority shines through on every page of this document.
Mr. Heathcoat-Amory: Is my hon. Friend aware that he has the former Government on his side? They tabled an amendment in the Convention on the Future of Europe to delete the concept of shared competences, and they made exactly the points that my hon. Friend has been making. This Government are now trying to make the best of a bad job, but at the time—and it happened in my presence—the Government representative on the Convention moved an amendment to try to delete the concept. My hon. Friend is absolutely right in his objections, and at the time there was a cross-party alliance.
Alan Duncan: I am grateful to my right hon. Friend. As a former Minister, he knows the argument inside out. What he and I are trying to say was confirmed in June last year by the legal service of the Council of Ministers, which stated its opinion that
“according to the Court”
—that is, the European Court of Justice—
“this principle”
“is inherent to the specific nature of the European Community”.
As was pointed out earlier by my hon. Friend the Member for Forest of Dean (Mr. Harper), what is so supremely unconvincing about the Government’s position is that they themselves attempted to water down the boundary quite vigorously during the early stages of the negotiations. The right hon. Member for Neath (Mr. Hain), who as Minister for Europe was our main negotiator, lobbied to amend the treaty’s definition of “shared competence” so that when the EU had acted—these were his proposed words—
“Member States shall respect the obligations imposed on them by the relevant Union measures”.
That, in Euro-babble, means that it would have encroached less on our sovereignty. It was a very reasonable amendment which would not have precluded the action of individual member states, but the Government failed to amend the text. We are now lumbered with the deeply regrettable fact, as defined in the treaty, that member states cannot legislate if the EU has done so first, which jeopardises our ability to act independently on energy matters.
Undoubtedly the most unsettling part of the text is in article 100, which reads:
“Without prejudice to any other procedures provided for in the Treaties, the Council, on a proposal from the Commission, may decide, in a spirit of solidarity between Member States, upon the measures appropriate to the economic situation, in particular if severe difficulties arise in the supply of certain products, notably in the area of energy.”
That is a pretty extraordinary part of the treaty, and I shall return to it in a little more detail later.
The final surprise is the insertion of an entirely new article on energy—article 176A, for those who are following this in their primers—which establishes an EU energy policy. It will allow the EU,
“In the context of the establishment and functioning of the internal market and with regard for the need to preserve and improve the environment”,
to pass laws in four key areas: ensuring the functioning of the market; ensuring security of supply; promoting energy efficiency, saving and renewables; and promoting the interconnection of energy networks. In that, the United Kingdom has no power of veto. The laws pass through co-decision, including qualified majority voting in the Council. Our Government have essentially written a blank cheque to Brussels, which could in certain circumstances oblige the United Kingdom, for example, to assist in the building of other member states’ energy infrastructure, or even to supply them with energy during times of emergency.
Rob Marris: I suggest that the hon. Gentleman has only partly read out article 100, which becomes article 122 in the consolidated text. The bit he read out was paragraph 1. Paragraph 2, which deals with emergency stuff, reads:
“Where a Member State is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control, the Council, on a proposal from the Commission, may grant, under certain conditions, Union financial assistance to the Member State concerned. The President of the Council shall inform the European Parliament of the decision taken.”
That is nothing to do with emergency supplies to other countries, desirable as that may be in some circumstances.
Alan Duncan: The hon. Gentleman completely misunderstands the treaty, because that is a supplementary, additional provision, not something that qualifies what I have just asserted. It is not a question of either/or, but of an extra “and”. The fact that the hon. Gentleman does not understand that shows the problems that we get into when this House scrutinises European legislation so poorly. We get ministerial guarantees, and a few years later judgments come at us down the track that we were told would never come our way. That is why people get so angry about the way in which European legislation—
Ms Hewitt: Will the hon. Gentleman give way?
Alan Duncan: Oh yes. I will happily give way to the right hon. Lady.
Ms Hewitt: I am grateful to the hon. Gentleman. I have been following his argument with great care and looking again at the proposed new paragraph 1 in article 100. There is no requirement upon the Commission to come forward with proposals in the situation of energy supply interruption that he describes; nor is there any compulsion upon the Council of Ministers to decide to offer help in such a situation.
In any case, the central point that the hon. Gentleman has completely failed to mention is that only the Council of Ministers can make a decision under this article, and the Council of Ministers is comprised of the Governments of the member states, including the British Government, which has been extremely successful over the years in pressing policies in the interests of our country.
Alan Duncan: This is why people get so angry with politicians in this country: they do not come clean about what can be done in the name of the EU and how such powers replace powers currently enjoyed by this country, and this House of Commons. That is why I object to what the right hon. Lady has just said.
Mr. John Gummer (Suffolk, Coastal) (Con): If we worked more closely with our European neighbours, we could cut the emissions from our present generation by 9 per cent. We have no mechanism to carry that out, either in normal circumstances or in an emergency. Surely we are talking about a perfectly sensible way of making decisions among ourselves. If every nation took the view that it will not do anything about energy unless it has total control over its own, we will not be able to meet our energy needs.
Alan Duncan: I am all for the co-operation advocated by my right hon. Friend, but not for the transfer of power that allows us to be told to do things, which are unclearly worded in this treaty. The EU has an open-ended ability to tell us what to do in areas where that is not necessary. What does that mean? It could mean that the EU will tell us what to do about strategic storage; it could allow it to intervene on what might arise as a pattern of trading and supply—Government-to-Government contracts; it could give rise to the setting up of an EU regulator; it could allow the EU to tell us what we can and cannot do with our nuclear power stations; and it could even lead to a decision on whether we have the Severn barrage or not. Whether one is for greater institutional integration or against it, the provisions make one thing perfectly clear.
Mr. Kenneth Clarke (Rushcliffe) (Con): I find this debate very difficult. The Government are finding it difficult to explain what additional powers are given by this treaty, and with great respect, my hon. Friend is finding it very difficult to establish what is wrong with either the existing powers, or the powers as re-worded. He gives a list of things that might happen. Is he not aware that article 194—I am using the consolidated treaty—spells out that
“Such measures shall not affect a Member State’s right to determine the conditions for exploiting its energy resources, its choice between different energy sources and the general structure of its energy supply”?
How on earth is that giving powers to Europe to veto the Severn barrage or to determine what sources of energy we use? It explicitly says that that is not the case.
Alan Duncan: I beg to differ with my right hon. and learned Friend in this sense: the danger of such treaties is that one can start off thinking that benign powers are granted to the EU, but one finds that they normally morph into something completely different. We are seeking clarity in the belief that the powers that already exist are sufficient. As my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) said, there are pressures in the EU already for liberalisation, and we agree about that. The current powers suffice, and that sufficiency means that we do not need what we fear may be coming in.
Alan Duncan: I give way to my hon. Friend the Chairman of the Select Committee on Business, Enterprise and Regulatory Reform.
Peter Luff: This is one of the central issues. With respect to my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), I think that he is wrong. This is a serious and worrying power. I hope that in unusual circumstances we would do what is right to protect the overall economy of Europe, but we know how to do that. We do not need it mandated to us by the European Union. That is what this power does. The article contains the words
“upon the measures appropriate to the economic situation”.
That is quite a broad-ranging power. It is not restricted to terrorism, as the Secretary of State suggested. It is an unnecessary transfer of power, but we should retain national discretion over what we think is right in the appropriate circumstances.
Alan Duncan: No doubt my hon. Friend’s Committee will look into the matter further, but what he has said confirms the suspicions many in the House share.
Mr. Heathcoat-Amory: The debate so far has very much been about liberalisation, and as my hon. Friend has already said, such powers exist. However, what is new in article 176A is the power to decide by qualified majority voting measures to
“ensure security of energy supply in the Union”,
which is not necessarily about bullying Russia, but a redistributive mechanism in the European Union. We could be mandated, particularly taking into account the solidarity provision, to share—in other words, give—our energy supplies to other members of the EU, when countries outside the EU might have a better and clearer call on our resources because, for instance, they are a lot poorer. We could be giving energy to rich countries under the solidarity provision when we may wish to do something different. My hon. Friend is absolutely right about our powers being circumscribed under—
Mr. Deputy Speaker: Order. That is a very long intervention.
Alan Duncan: I am grateful to my right hon. Friend. In order to move on, I say once again that one has to ask why on earth, if everything is okay, the Government were so keen to remove those provisions in the course of their negotiations.
Mr. Doug Henderson (Newcastle upon Tyne, North) (Lab): Will the hon. Gentleman give way?
Alan Duncan: No, I am going to move on now.
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