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

Mr. Clappison rose—

Mr. Hutton: If right hon. and hon. Gentlemen will allow me to make some progress, we can return to this issue later.

We know that back in the days of Maastricht, the Opposition could not unite. The consequences of the Tory policy of fundamental renegotiation of the Lisbon treaty would, I believe, risk our entire membership of the European Union itself. Many Opposition Members in their places today openly advocate British withdrawal from the EU. That would marginalise us during one of the most important periods of reform to the single market.

Mr. Clappison rose—

Mr. Hutton: As I said earlier, the treaty does not make any fundamental changes to the legal basis of the single market, but it introduces a number of technical measures that could benefit UK workers, consumers and businesses even further. It includes a new protocol on competition policy, which I understand is the principal focus of the Opposition amendment to the motion. For reasons that I shall set out in a few moments, I believe that the amendment is wrong about the new treaty and the status of the protocol. It clearly betrays Conservative Front Benchers’ enduring pathological dislike of the European Union and offers further proof, if any were needed, of why they should not be trusted with the responsibility of government.

Mr. Clappison rose—

Mr. Hutton: Articles 85 to 93 of the original treaty of Rome in 1957—

Mr. Clappison rose—

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I must tell the hon. Member for Hertsmere (Mr. Clappison) that it is fairly evident that the Secretary of State is not prepared to give way at the moment, so the hon. Gentleman must not remain on his feet.

Mr. Hutton: I will give way to the hon. Member for Hertsmere in a few moments, but I am anxious to make some progress with my speech.

Articles 85 to 93 of the original treaty of Rome of 1957 stipulated that the Community should monitor and enforce free and fair competition in markets across Europe. With much of the legislation required to establish the single market already in place, the new protocol ensures that proactive competition will remain the major focus and driver of single market policy in the 21st century. The protocol states and confirms, as did the treaty of Rome, that establishing an internal market is a key objective of the European Union and that ensuring free and fair competition across the continent is essential to doing so. The protocol is legally binding and an integral part of the Lisbon treaty. As the treaty itself states:

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The wording of the principal treaty articles governing the regulation of competition in the European Union—4, 27, 34, 81 to 89, 96, 98, 105 and 157—are substantially unchanged by the Lisbon treaty, providing an additional layer of protection. Everyone in the House should therefore be clear that removing barriers to competition in the internal market will remain a fundamental part of the EU’s task once the treaty of Lisbon has been ratified.

The Lisbon treaty also expands the Union’s objectives to include references to a

Under the terms of the treaty, the Union has a duty to promote those values in every area. The binding protocol on the single market embeds those principles still deeper into the European Union’s agenda. I will now give way to the hon. Member for Hertsmere, for the last time, I hope.

Mr. Clappison: The Secretary of State has been very generous in giving way. While the provision has been placed in a protocol, where it will have such legal force as comes from being in a protocol, free and undistorted competition has been removed from the objectives of the Union and relegated to a protocol. Will he explain why that happened, and how the Government allowed it to happen?

Mr. Hutton: I am sure that the hon. Gentleman has studied carefully the consolidated text of the treaty, and he needs to look at article 51, in which the position is made absolutely clear: the protocol has exactly the same legal effect as any other part of the Lisbon treaty. There is absolutely no basis of fact or law in his assertion that somehow including the provision in a protocol in any way involves a relegation of the issue governed by the protocol. If he has any doubt about that, he should look again at the treaty. He will also probably want to look at the provisions of the Vienna convention, as I have done in preparation for the debate, in relation to how international treaties are to be interpreted. He will find a clear exposition of the international law of treaties and how questions of interpretation in relation to preambles, annexes and protocols are approached. The rebuttal to the Opposition motion can be found in all those sources. The Opposition have misunderstood the legal basis of the protocol. That flushes out one of the most unpleasant aspects of the debate, which is the feverish hatred of all things European that permeates those on the Opposition Benches—and has come principally from those on their Front Bench—with some noble exceptions, although only one of them is on the Opposition Benches today.

The European Commission, strongly supported by the UK Government, is now pushing ahead with implementing the single market review and the Lisbon agenda, both of which are based on the explicit foundation that Europe must continue to tackle anti-competitive practices and barriers to competition. The protocol will help us to achieve our priorities for the single market in the next decade. As Neelie Kroes, the Competition Commissioner, said recently:

That is also the clear view of both the Law Society—a very respected source of opinion—and the Commission’s own legal service.

I referred to technical changes in the articles dealing with the single market made by the Lisbon treaty. Some of my hon. Friends have also referred to them. They all offer the prospect of further improvements to the single market, and can therefore be seen as having a beneficial, pro-reform, pro-enterprise effect on the single market. Amendments to article 47 introduced qualified majority voting on legislation to remove barriers to self-employed professionals working in other member states of the Union. The free movement of people is one of the four key foundations on which the single market rests. That further advances that fundamental principle, and will be of particular benefit to professionally qualified people.

Judy Mallaber (Amber Valley) (Lab): Preventing countries from competing unfairly by allowing their workers to be exploited is a key element in the free movement of labour. The minimum social provisions are important in that respect. Today, on the 90th anniversary of the introduction of women’s suffrage, does the Secretary of State agree that any step that threatened the treaty and led possibly to opt-outs from the social chapter would be extraordinarily retrograde and would prevent attempts to provide harmony and free competition within the market?

Mr. Hutton: I am grateful to my hon. Friend for making that point. We have stood up consistently, along with others in the House, for a proper balance in the competitiveness agenda. A strong social dimension to Europe now and in the future is important. One of the best things that we did when we came into government was to sign the social chapter, as it demonstrated a clear commitment to developing that part of the European project. I derive a great deal of satisfaction, as I hope she does, from meeting constituents who have benefited from many of those provisions, which include holiday entitlement.

Paul Farrelly (Newcastle-under-Lyme) (Lab): On the social dimension, may I record my disappointment, and that of many of my colleagues, at the way in which the Government blocked a European directive on agency workers before Christmas? Does my right hon. Friend oppose the principle of equal treatment for agency workers, or is it simply a question of negotiating an appropriate qualifying period?

Mr. Hutton: We certainly do not oppose the principle of equal treatment, as we have repeatedly made clear over a long period. The text of the directive was not acceptable to the United Kingdom and other countries in the Council, which is why it was not possible to reach agreement on 5 December. The UK Government remain committed to trying to find an acceptable text on which we can agree, and which addresses our concerns about flexibility, which is crucial for the UK to secure and develop. Our labour markets are widely respected as flexible and for providing proper protection for workers. I do not want to compromise on any of those issues.

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With those comments in mind, I cannot see the logic of Opposition amendment No. 145, which not only deprives UK workers of the potential benefits I have just outlined but would take a step backwards. If the Opposition had their way, they would not allow us to use QMV to develop proper protection for self-employed workers in the single market. That is not sensible. We should not take their advice on that or anything else in this debate.

As many will know, the European social fund is investing £3 billion in the UK in 2007-2013 to help the unemployed and disadvantaged improve their job prospects and skills.

Mr. Lilley: The Secretary of State says that he will take no account of any of our proposals. Would it not benefit the House, however, if he were to put before us all the positions taken by the Government on these and other issues in the convention on the constitution—the motions tabled, the positions taken, the letters written—so that we know the Government’s original position? Is not that absolutely essential for informed debate in the House? It is available to some Members, but not to others. As a good House of Commons man, will he not say yes?

Mr. Hutton: I always try hard to say yes to the right hon. Gentleman. His remarks, however, are principally about the old constitutional treaty, which has been abandoned. The process has been abandoned. We are debating the new treaty of Lisbon—the reform treaty. The House has ample opportunity to debate that, and I and all my Cabinet colleagues will debate it with him and others over the next few weeks.

Crucial to the EU’s success as a dynamic knowledge economy is the ability of our people to think, exploit and protect new ideas and innovation. The Community trade mark and design schemes have already proved highly popular with UK businesses, helping them to expand and safeguard their ideas in new EU markets. New article 97a establishes a legal base for the EU to agree measures to create European intellectual property rights and to provide uniform protection of IPR throughout the EU. Qualified majority voting will now apply to all aspects of the creation and administration of European IPRs, except for the issue of language requirements, which will still be decided by unanimity.

Community IPRs can foster further investment in research, design and innovation. Based on precedent and our experience of 20 years in the single market, qualified majority voting is critical. It can help to ensure that existing community IPRs can be updated quickly and flexibly as technology, business and society progress. I hope that it will also help to unblock negotiations—which have been stalled for many years—on the Community patent, and bring member states closer to agreement.

We believe that the retention of unanimity for language issues is crucial to ensure that excessive translation costs are not placed on United Kingdom businesses applying for Community patents. In our view the translation of patents should be limited as far as possible, and unanimity voting will allow us to deflect any proposals that we consider damaging to business in that context.

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The introduction of new article 176A provides a specific article enabling discussion and agreement of EU energy measures for the first time. We debated those last week.

The new text on the common commercial policy ensures that the EU can continue to lead in efforts to open markets and reduce trade barriers in the case of rich and poor countries alike. The new text gives more scope for the Community to negotiate and conclude wide-ranging trade and investment agreements of major benefit to member states with third countries. For example, the EU is currently engaged in trade and investment negotiations with countries such as India and Korea. Ambitious investment agreements would increase access to their markets for UK companies, creating new jobs and increasing trade. The text also imposes an obligation on the Commission to update the European Parliament on the progress of its trade negotiations, increasing the transparency of Community-level trade negotiations.

UK business leaders have agreed that the Lisbon treaty will deliver a more effective, robust and efficient European Union to help drive forward measures such as the further liberalisation of the single market that are good for UK companies, workers and consumers. Sir Michael Bishop, chairman of British Midland Airways, said recently:

Bill Thomas, European president of EDS, has said:

The same point was made by my hon. Friend the Member for Wrexham (Ian Lucas). I prefer those views on the treaty to the views of Opposition Members.

I fundamentally believe that, by moving us on from the endless discussions about EU institutional reform that some Members are so keen to continue, the Lisbon treaty can help us to build a Europe ready for the 21st century: a Europe focused on the issues that matter, such as jobs, growth, and open and competitive markets. It should be possible for Members throughout the House to agree on one thing, the absolute priority of strengthening the competitiveness of the European economy. That was made clear in the European Commission’s fundamental review of the single market, published last year. The review reflected many of the policies and reforms for which we have been negotiating, including a new, flexible approach to single market policy to promote competition fully, reduce the burden of regulation, and encourage innovation. It focused on key priorities from which businesses and citizens can benefit together, such as further liberalisation of the energy and telecoms markets, the use of competition policy tools to reduce barriers for businesses, and allowing consumers to benefit from more choice and lower prices.

The Commission has already introduced a system to monitor the market and ensure its competitiveness, enabling the EU to crack down on markets where there are still significant barriers to competition. Full liberalisation of European network industries in particular, such as energy, telecoms, post and transport, could bring an extra £52 billion to £66 billion to the EU economy, create between 140,000 and 360,000 jobs, and reduce
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prices significantly. Progressive liberalisation in the telecoms sector throughout the 1990s has already led to cheaper prices and more choice for EU consumers. Prices for national and international calls in the EU fell by an average of more than 40 per cent. between 2000 and 2006. I believe that it is time to build on that success, and to deliver even greater price savings and choice to business and consumers.

We are also pushing for full and swift implementation of the services directive across the EU to make the free movement of services a practical reality. Services account for 70 per cent. of EU gross domestic product, but for only 20 per cent. of intra-EU cross-border trade. The agreement of a wide-ranging EU services directive was a major step forward in tackling that covert form of protectionism. Full implementation of the directive will make it easier for service providers to set up and deliver services in other member states, increasing access to new markets and consumer choice. It could be worth between £4 billion and £6 billion per year, and could bring about 80,000 new jobs to the UK economy.

A truly enterprising Europe must slash the bureaucracy that holds opportunity back, and I am glad to say that ensuring better regulation is now a priority in Europe. The EU is working towards achieving its target of a 25 per cent. reduction in administrative costs, which will help to promote fair, open competition, empower consumers and encourage innovation, and which promises an increase of up to £100 billion in EU GDP.

Adam Price (Carmarthen, East and Dinefwr) (PC): The Secretary of State referred to the services directive, which applies to private sector services. Will he say a little about where public services fit into the internal market? Does he believe that the rules of competition policy and the principle of the internal market should be extended to include them?

Mr. Hutton: Some of the issues have already been addressed in the European Court of Justice in recent litigation. I am thinking particularly of the Watts case, in which I was involved as a junior health Minister. The Lisbon treaty includes provisions relating to services of general economic interest as well, but it is clear that the prime responsibility for the organisation and funding of public services is a matter for member states rather than the European Union.

There are provisions in the treaty that deal with important areas in which greater collaboration and co-operation could bring us advantages in Europe, relating to such matters as early warning of potential contagious public health hazards, about which I think we should be doing more in the European Union. There are border areas where people live very close to each other in parallel health jurisdictions. We should think about what we can do to improve cross-border co-operation in that context. That was the subject of the Watts case, and it is now part of European Union jurisprudence.

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