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The amendments that have been tabled to the Bill would exclude the prospect of any such developments. If we accepted those amendments, with which I know my hon. Friend the Minister for Europe will deal very
ably in a few minutes’ time, we would not be able to make progress in those areas. We cannot do so if we do not agree the Lisbon treaty, and accept that in some areas qualified majority voting will work in the interests of the British people. That is the choice that we must face here today. [Interruption.] I hear that lot on the Opposition Benches chuntering at my remarks. I always know when they do not like what I am saying: they start chuntering. I can hear them asking “How will all these developments in the single market be secured?” Those developments will not be secured if we take their advice. As I said at the beginning of my speech, they will not be secured if we go back to Europe and say “We do not accept the treaty of Lisbon. We will not accept any further liberalisation measures if they are based on its provisions.” [Interruption.] That is clearly the position of Opposition Members. They have made it very clear. The hon. Member for Aldridge-Brownhills (Mr. Shepherd) knows this to be true because he follows these debates, unlike some of his right hon. and hon. Friends. He knows that the position of the Opposition is precisely that. Those are the tactics that all these characters want to pursue. All these hon. Gentlemen—
Bob Spink (Castle Point) (Con) rose—
Mr. Hutton: He is another of them. They have all made it clear that they want us to withdraw from the European Union.
Bob Spink: The Secretary of State referred to services, and I will come to those in a moment, but the point is this: will these changes actually help our constituents? The treaty extends the single market rules to new areas of financial services, intellectual property rights, foreign direct investment and possibly even sovereign wealth funds. Those would all come under the umbrella of the uniform principles for the first time, and that would damage the City of London, where thousands of my constituents work. Why should they have to put up with it?
Mr. Deputy Speaker: Order. May I say gently to the Secretary of State that using such words as “lot”, “characters” and “crowd” departs from the normal nomenclature that we use in this place? It is probably best to keep to the usual.
Mr. Hutton: I accept your admonition, Mr. Deputy Speaker. I was trying to say that they were very interesting characters. I am sorry if that did not entirely come across when I made the remark. Of course I have a great deal of respect for Opposition Members, particularly those who follow these debates closely. Obviously we do not agree on a number of matters, but I respect the way in which they have applied themselves to the issues.
As for the point raised by the hon. Member for Castle Point (Bob Spink)—and I have a great deal of personal respect for him as well—I think it would be sensible for him to make himself clear to the House too. He wants Britain to be out of the European Union, and that is the argument that he should be having with his constituents. This pussyfooting around, if I may put it that way—quibbling about this or that part of the treaty or the text—is all camouflage. We know that from a wider analysis that he and others have made that Britain
would be better off outside the European Union. That would be a total disaster for the United Kingdom. That is why we cannot accept his analysis and we certainly do not accept his amendments.
None of the important objectives I have tried to outline would have any prospect of being realised if we took the advice of the Opposition and reopened the debate about the content and structure of the Lisbon treaty. It is clear that the UK’s relationship with the European Union and participation in the single market have worked to our benefit in the past, increasing business, jobs and trade, but we will continue to benefit from these gains only if the UK is actively and fully engaged in the EU, making the case front and centre for changes that will benefit UK citizens and businesses. The choice Opposition Members face is either to do what is in the long-term interests of the British people and economy—actively to engage in Europe to open up new markets and opportunities—or to let their dogmatic dislike of all things European marginalise Britain in Europe, putting at direct risk the benefits of the single market and our economic future.
I believe that the answer is clear. The Lisbon treaty gives an EU of 27 member states a solid foundation from which to move forward and tackle the challenges facing, and reap the opportunities that will be provided by, Europe in the future. On that basis, it must be ratified.
2.11 pm
Mr. Philip Hammond (Runnymede and Weybridge) (Con): I beg to move, To leave out from “House” to end and to insert instead thereof:
“disapproves of the Government’s policy towards the Treaty of Lisbon in respect of provisions concerning the single market; notes that the Treaty proper now contains no reference to undistorted competition as one of the activities of the European Union, and indeed relegates to a protocol any mention of competition that is not distorted, with significant implications for the interpretation of European Union law; deplores the Government’s failure to block this change during the negotiations; and is concerned that the result could be the revival of protectionism in the European Union wholly contrary to Government policy and damaging to the interest both of the United Kingdom and of the European Union.”.
People are rightly angry about many aspects of the Government’s handling of the treaty of Lisbon: their incompetence in negotiating on Britain’s behalf; the casual way in which Britain’s self-interest has been abandoned by those charged with protecting it; and above all, the breach of trust with the British people in refusing to hold the promised referendum. However, amid the concerns about the impact of the treaty on matters such as foreign and security policy, justice and migration, relatively little attention has been paid to the way in which one of the best and most successful elements of the European structure has been consciously relegated to the sidelines. The purpose of our amendment is to change that.
For 50 years, the creation of what was first called the Common Market, then the single market, and now the internal market, has been at the heart of the European Economic Community and subsequently the European Union. Underlying it was the simple proposition that economic collaboration between the nations of Europe delivers prosperity, and prosperity delivers peace. Now, quite deliberately and with the connivance of the British
Government, this treaty downgrades the objective of an open and competitive single market from its place at the heart of the EU’s agenda to an obscure protocol tacked on to the back of the treaty, and it undermines at a stroke one of the undoubted successes of the last 50 years, and just about the only bit of the EU structure that enjoys almost universal support.
Ian Lucas: Article 3, paragraph 3 of the consolidated treaty states:
“The Union shall establish an internal market.”
It is there in black and white. What is wrong with that?
Mr. Hammond: I did not hear the word “competitive” in what the hon. Gentleman read out. I know he is a lawyer, and if he will just bear with me I shall come on to the detail of the words that have been included and those that have been left out.
Mr. Siôn Simon (Birmingham, Erdington) (Lab): Will the hon. Gentleman give way?
Mr. Hammond: I will in a moment, but I want to make a little progress first, to try to avoid the trap that the Secretary of State fell into.
The Opposition seek to strengthen the Union in its pursuit of the single market, not, as the Secretary of State has suggested, to undermine that process. Nothing could be more calculated to damage the EU in the medium and long term, and to undermine the prosperity of the member states as they face the challenges of the 21st century, than the symbolic downgrading of the central place in the EU’s structure of the open competitive single market.
This Government stand accused of a sell-out of truly historic significance. It is a sell-out based not on malevolence, but on sheer incompetence. What we have heard today from the Secretary of State is a breathtaking dose of complacency and wishful thinking.
Mr. Simon: The hon. Gentleman told my hon. Friend the Member for Wrexham (Ian Lucas) that the treaty referred to an internal market but not a competitive one, as if there were another kind of market. Article 3, paragraph 3 talks about
“a highly competitive social market economy”.
It is a market, and a competitive one. What other kind of market is there?
Mr. Hammond: The treaty as currently drafted refers to a “social market economy”, but reference to undistorted competition has been relegated from the body of the treaty to the protocol. That is important. [Hon. Members: “Good.”] Some Members say “Good”, so there we have it.
Mr. Hammond: If Members will allow me, I shall deal with this specific point in detail shortly.
The constitutional treaty, like the budget and the rebate before it, has involved a process in which the Government have through their own words and deeds showed that they understand full well where the lines needed to be drawn. They recognised precisely where
Britain’s vital interest lay. As with the budget negotiation, however, faced with defeat at the negotiating table, instead of digging in and using the veto—which is there precisely to defend our national interest—they rolled over. So now Government policy is to argue that black is white—that the changes they sought to make in the constitutional convention are unnecessary and that the dangers they warned of are non-existent. That is a complete sell-out: it is a capitulation in the area of EU law that is arguably more important to Britain than any other—and in exchange for nothing.
I shall quote President Sarkozy in the course of my remarks—not necessarily with approval, but I will say this at the outset: I fundamentally disagree with the Sarkozy vision of the EU, but I do not doubt for one minute that he has pursued what he genuinely believes to be the best interests of France, and I respect him for that—for defending, however mistakenly, the interests, as he perceives them, of the people he represents. Our Government, by contrast, know that the single market based on free and unfettered competition needs to be at the heart of a prosperous Europe. They set out to achieve that objective; they argued for it and tabled amendments in defence of it, all of which was perfectly honourable. But when the chips were down, they failed comprehensively.
Chris Ruane (Vale of Clwyd) (Lab): The hon. Gentleman talks about President Sarkozy sticking up for his country. The European structural funds were made available to help not only all countries, but all parts of all countries. In the 1980s and 1990s, previous Conservative Governments failed to draw down on objective 1 funding, especially for Wales when they were decimating the mines and the steelworks, and seaside towns such as Rhyl and Prestatyn in my constituency. They failed to claim that objective 1 funding. It was delivered by a Labour Government in 1998.
Mr. Hammond: The hon. Gentleman wants to fight the battles of 20 years ago, but I think most people want to deal with the future—the future of Europe, and of Britain’s place in the competitive world order.
Ms Patricia Hewitt (Leicester, West) (Lab): The hon. Gentleman has been talking about the changes—which are cosmetic in my view—in terms of competition in the Lisbon treaty. Will he accept that the protocol on the internal market and competition has identical legal force to the rest of the treaty—that is spelled out in the treaty itself—and says that the internal market
“includes a system ensuring that competition is not distorted”,
which is the precise wording of the treaty of Rome? Will he also accept that the protocol, in what I think is a new provision, refers explicitly to the enhanced powers of European institutions
“under Article 352 of the Treaty on the Functioning of the European Union”
if they are needed to achieve the goal of an undistorted competitive single market? He is simply wrong in the point he makes.
Mr. Hammond: On the contrary, the right hon. Lady is simply wrong. Yes, the protocol has the same legal status as the body of the treaty—I accept that without dispute—but I shall show in a few moments how the European Court of Justice interprets European treaties when it makes decisions, and the trap that we are walking into by relegating this measure from the body of the treaty to the protocol. I shall quote to her what those who have pressed for this change have said. They have not pressed for the removal of these provisions from the body of the treaty to a protocol as a cosmetic change; they have pressed for their removal as a substantive change to the body of European Union law.
To cover their humiliation, the Government embarked on a duplicitous attempt to conceal the scale of the defeat. First, they resolved to deny the referendum that they had promised the British people, because it would have exposed the gap between the rulers and the ruled. They then created a smokescreen of red lines and emergency brakes, which my right hon. Friend the Member for Richmond, Yorks (Mr. Hague) has brilliantly demonstrated is a meaningless charade of flannel and smoke that offers no durable protection. We have heard yet more flannel and smoke from the Secretary of State today. I suppose we should be grateful that he remembered to bring his flannel and smoke with him to the Chamber this week; we should be grateful for something.
Depending on which authority we follow, we know that the treaties are between 90 and 98 per cent. identical to the aborted constitution. It is ironic that one of the few changes made between the draft constitution and these treaties is the relegation of the concept of unfettered competition in the single market from the heart of the structure to the periphery. Instead of making a stand for the principles of economic liberalism, which he repeatedly claims to espouse, the Prime Minister slunk off to Lisbon, almost literally in the dead of night, and looking every inch like a man engaged in a furtive and shameful little mission, to sign the treaty and sell out the interests not only of Britain, but of millions of Europeans whose prosperity will now be put at risk.
Let me explain why people’s prosperity will be put at risk. In 1957 a genuine single European market, on its own, would have ensured Europe’s prosperity—but this is 2008, not 1957. At the beginning of the 21st century the single market, which after 50 years of progress remains far from complete, can only be part of a much larger global picture. We now have to look outwards and further afield. Our need is for a single, open, free, lightly-regulated and competitive market in Europe, not only for its own sake but to act as a base from which European businesses can compete effectively as part of an open world trading system. If we are to prosper, not only in our home market but in the wider world market, the EU single market must be open by virtue of the absence of barriers to competition, not by virtue of a heavy-handed structure of managed and regulated competition. Conservative Members are not prepared to see Britain’s prosperity being dragged down into the quicksand of over-regulation and economic nationalism. Our future lies in engaging with, not resiling from, globalisation.
Mr. Cash:
I agree with a great deal of what my hon. Friend is saying, but may I just qualify one point? Is it not possible that we could use the word “Europe” in the
broader sense to achieve the degree of co-operation that we all genuinely want, rather than the legal straitjacket created by the structure to which he referred, the European Union?
Mr. Hammond: I am sure that my hon. Friend will make his case in due course. My purpose is to demonstrate that the Government know very well what is in Britain’s interest, and that although, to their credit, they went out to fight their corner, they did not do so very well, they have comprehensively lost the argument, and Europe, and Britain in particular, face serious consequences.
Mr. Hammond: I shall give way in just a moment. We have heard before, and again today, that none of this matters. The right hon. Member for Leicester, West (Ms Hewitt) referred to the changes as cosmetic, but she is wrong: this does matter. We have heard that whether words are in article 3 of the treaty or in a protocol at the back is irrelevant, but it is not. The change of direction represented by the symbolic relegation of the endorsement of undistorted competition from the opening articles of the treaty to a protocol at the back does matter, and those who fought for it know that. It matters because if Europe is to prosper, much work remains to be done on the completion of a single, open and competitive market; it matters because of the political signal sent and received about the future direction of EU economic policy and its subordination to social policy; and it matters because of the legal significance of the treaties in the EU’s system of jurisprudence and, in turn, the impact on how our own courts interpret the law.
Mr. Doug Henderson (Newcastle upon Tyne, North) (Lab): I think I followed the hon. Gentleman’s argument. He says that he wants unfettered free competition—so why does he oppose the treaty provisions that extend qualified majority voting on energy?
Mr. Hammond: We have been around this loop before. We want an open and competitive European market, and a strengthening of the thrust for competition to be the driving force in determining the direction of the single market. I contend that the Lisbon treaty contains a clear political and judicial signal that we are moving in a different direction.
Mr. Hammond: I hope that the hon. Gentleman will just bear with me. I shall deal with three issues, the first of which is the challenge of completing a genuine single market.
In 2000, the Lisbon strategy set out the aim of making the EU
“the most dynamic and competitive knowledge-based economy in the world”
by 2010. Last year, the Secretary of State’s Department conceded that the Lisbon goals remained “a far-off aspiration”. The Lisbon strategy’s own website notes:
“Weak competition in many markets, especially in network services including energy, continues to hold Europe back.”
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