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Appearances would suggest that our national health service is and will remain the exclusive responsibility of the UK Government, but it is not and, under the Lisbon treaty, it will not. All the apparent protection for our sovereignty that was provided in the old and new treaties does not exist. It turns out that some parts of the treaties are more equal than others.

In a recent ECJ decision, now followed up by the European Commission, the neo-liberals who hold powerful positions on the Court and the Commission decided to open everything to do with health care up to internal market forces. My right hon. Friend the Secretary of State referred to the Watts case in 2006, which the British Government lost in the ECJ. The Court found that a patient from this country was entitled to be treated in another European country and that the NHS was obliged to pay the Bill. The patient was not in despair after a protracted wait for treatment in the UK. The patient’s daughter was pushing the primary care trust to provide the European care before the GP had even referred the patient to a consultant. The Court’s decision was therefore made in worship of the internal market, in blatant contradiction of the treaty protections that I have read out.

Worse was to come. In December last year, the European Commission produced a draft directive in which it asserted that competition would drive down costs in health care. We should ask whether that works in the US. That directive, as drafted—before it was withdrawn—would have meant that the British Government would have no say whatever in setting any limits on the provision. People would be entitled to get treatment in Europe. They would be given a voucher or, after they were treated, what they spent could be repaid. They would also be able to top up any costs with their own money. I cannot see why the Tories did not welcome that, because it is exactly like the patient passport proposition that they put to the country at the last general election, which was so roundly rejected and, we are told, has been abandoned as a policy.

When the ECJ decision was made and when the European Commission produced its latest document,
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Tories from this country in the European Parliament said that it was absolutely right. I was rather shocked to discover that the Liberal Democrats welcomed it, describing it as health tourism. I want to try to look after the least well off and the least well informed, but the decision of the Court and the proposal from the Commission will clearly give a leg-up to the well off and the well informed, disadvantaging everyone else. The well off will be able to afford to pay in advance and wait to be reimbursed. They will be able to afford to make a top-up payment if they need to, and to meet the cost of travel. Badly off people will not be able to do any of those things. The well off are also likely to be well informed and to know how to work the system.

I cannot possibly support the proposal before us today, and I am very dubious about supporting a treaty that has not done something to set aside the Watts decision. I should warn the House that I think that there are very powerful forces at work behind the proposition, and they are in this country now. Those forces are the US health corporations that are having such a bad time in their own country. They have made such a gratuitous mess of the health care system there that even the most right-wing Republican presidential candidates are calling for wholesale, root-and-branch changes. They want to ensure that every American is covered and to prevent costs from escalating even above the present level which, roughly speaking, is twice as much per head of population as anywhere else in the developed world.

However, the mess in the US is so great that the companies to which I have referred are roaming around Europe and Britain looking for markets. They are promoting the concept of competition in health provision which, if it is applied in the way set out in the European directive, is likely to be greatly to the disadvantage of the worst off and least informed people in this country—exactly the people to whose interests all Labour MPs should give a high priority. I shall therefore find it very difficult to vote for the treaty’s ratification unless the Government make some concession to that effect.

2.51 pm

Dr. Vincent Cable (Twickenham) (LD): I had assumed that there would be quite a high degree of consensus on this part of the treaty debate. After all, as the Conservative spokesman conceded in his peroration, we are talking about the single area that almost everyone accepts represents an achievement on the part of the EU. Equally, the six provisions in the treaty relating specifically to economic matters are not especially controversial. They do not apply to the euro and, weak though they are, they are broadly helpful to the UK where they apply to intellectual property rights and self-employment. The other major provision relates to social security and is governed by veto, so the economic clauses do not contain an enormous amount to get worked up about.

The Sarkozy change is one issue of controversy, and the hon. Member for Runnymede and Weybridge (Mr. Hammond) managed to make a half-hour speech out of it. He massively overstated his point, but I happen to agree that it is unhelpful in the extreme that economic nationalisation should have emerged, in France
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and elsewhere. In addition, the concession made by the British Government may be symbolic but it is rather damaging.

The right hon. Member for Leicester, West (Ms Hewitt), the former Secretary of State for Trade and Industry, made it clear that absolutely nothing has changed legally, and that was helpful. Even so, the concession represents a step backwards in political terms, and that is why we have tabled some amendments to ensure that that aspect of the treaty is monitored as it proceeds.

Rob Marris: The hon. Member for Runnymede and Weybridge (Mr. Hammond) decried President Sarkozy for saying that competition should be a means and not an end. I do not agree with President Sarkozy about many things, but in this case I do. However, the Tories seem to see competition as an end in itself, thus making a fetish of what is a means to greater prosperity. Does the hon. Gentleman agree that to make competition an end in itself is economic reductionism of the worst order?

Dr. Cable: Of course competition is a means rather than an end, but the French President is seeking ends that are based in economic nationalism. Most of us feel that that is extremely unhelpful in the context of the economic union.

The Secretary of State spoke about the fundamentals of the single market, and he was right to begin by emphasising that the single market is the bedrock on which the EU is built. It is the EU’s greatest success, and it underpins the rise in living standards that we all enjoy. The common market, followed by the single market, has attracted and sustained the membership of countries from southern and eastern Europe, permanently liberating the first group from fascism and the second from communism.

Those are major achievements, and we should underline the major contribution that the single European market makes to the UK economy. We often take it for granted, but roughly 63 or 65 per cent. of British visible exports now go to the EU, compared with 43 or 45 per cent. in the mid-1970s. The EU market represents some 40 per cent. of total world trade, so it is an enormous entity into which we are fully integrated. Britain has benefited disproportionately from the very large amount of inward investment in the single market that has taken advantage of its unified characteristics.

Those are major benefits, but I often meet people who would be described as Eurosceptics—I am talking about people old enough to have been able to make their choice in a referendum—and they say, “We voted to join the common market, not for silly political things like square tomatoes, straight bananas and abolishing double-decker buses.” From the outset, we must acknowledge that the establishment of the common market and the single market had very far-reaching implications for how we do things. They include many of the things that people often do not like but which are the flip-side of the benefits.

Let us remind ourselves of how the EU is structured. The simplest base is the free-trade area. Superimposed on that is a customs union, and on that a common market that involves freedom of movement of people and capital. That freedom of movement explains why so many foreigners have come here—more than 600,000
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from eastern Europe alone. However, we should also recall that 750,000 Brits have gone to the south of Spain and 300,000 to France. No doubt they are regarded in much the same way as we regard the eastern Europeans—

Frank Dobson: Only they’re no good at plumbing.

Dr. Cable: The right hon. Gentleman is right. The Brits are good at buying houses, but not at plumbing.

On top of all that, there is the competition policy that is essential for cross-border mergers and monopoly relationships. We need to have a discipline governing state aid, and finally there is the single market. The right hon. Member for Suffolk, Coastal (Mr. Gummer) helpfully reminded us of the major contribution made by Lady Thatcher—Mrs. Thatcher as she then was—in introducing the single market. She was acting on the advice and encouragement of Lord Cockfield, who was the real inspiration behind the move.

It is worth recalling what the then Prime Minister said, as in no sense was she naive about the implications of the single market. In her diary, she wrote:

She therefore understood very clearly the price that had to be paid if the objective of a single market was to be achieved.

Similarly, it is inherent in the creation of a single market that there is more harmonisation. That can often be very irritating and produce slightly absurd consequences, but it has to happen. Anyone who has been involved in the standardisation process more generally, such as through the International Organisation for Standardisation in Maastricht, will know that there has to be a degree of harmonisation if meaningful markets are to be achieved.

The classic case is the square pin plug that does not fit in round sockets. At some point, people have to agree that there has to be interoperability and that means that there has to be harmonisation. However, harmonisation can be frustrating, and it imposes some of the regulatory costs about which the right hon. Member for Wells (Mr. Heathcoat-Amory) was complaining.

Mr. Cash: The hon. Gentleman is making an interesting and fair analysis, but he has not yet mentioned one of the crucial problems. I voted for the Bill that created the single market when it had its Second Reading in this House, but I said:

The same question arises in connection with the matter that we are discussing today, and for the same reasons. However, the accumulated functions and the acquis communautaire have made the cost of over-regulation intolerable, and my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) was right to say that the European Commissioner had put that cost at £450 billion a year.

Dr. Cable: I will come on to the cost of regulation later. Of course there has to be an arbiter, because there will obviously be disputes. That applies to all
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international organisations. I am sure that the hon. Gentleman, who is a global liberal in an economic sense, will accept that the World Trade Organisation has to liberalise trade. It has dispute panels, and bodies comparable to the European Court of Justice that make rulings in much the same way as the ECJ does. That is the only way in which trade can proceed.

Mr. Mark Hendrick (Preston) (Lab/Co-op): On bringing in common standards, does the hon. Gentleman agree that harmonisation has meant that lots of different standards in different countries have been torn up, particularly in many western, developed EU countries? National regulation has been removed and European regulation has been introduced. In eastern European countries, where there was no regulation, standards have been raised as a result. Some standards have been lost as harmonisation has taken place, but some standards have been raised.

Mr. Deputy Speaker: Order. May I make a plea for short interventions? There is precious little time left, and a number of hon. Members are seeking to speak.

Dr. Cable: I agree with the point made by the hon. Member for Preston (Mr. Hendrick).

Mr. Gummer: Does the hon. Gentleman accept that common markets that did not set up a firm institutional base with a court have been almost stillborn? Common markets need such a base if they are to work.

Dr. Cable: The right hon. Gentleman is correct. In my earlier professional career, I tried to help establish common markets in Latin America and Africa. All of them failed because they lacked strong institutional underpinning. The European Union is the one that has succeeded. Of course, that underpinning does not have to be rigid; one of the major innovations that is not referred to in the treaty, but which has become part of Commission practice, is what is called mutual recognition—recognition that we are gradually deepening the single market through mutual acceptance of other countries’ rules. That is why there is now mutual recognition of professional qualifications, for example. That does not have to take the form of blanket harmonisation. Those moves are progress.

I shall cite a few topical recent examples of Commission and Court rulings that have taken forward competition policy and the single market in a common-sense, practical way to the benefit of consumers. First, the European institutions stood up to the credit card companies on the charges that they imposed on shops for clocking up credit card transactions. The Office of Fair Trading had a go at the companies, but it was the European Union that really made the big difference to consumers.

The European institutions tackled the monopoly that British Airways and Virgin had on transatlantic flights—an issue that no British Government had been willing to deal with—and opened up the low-cost airline business. We may have doubts about that business for environmental reasons, but from a consumer point of view it was a major advance. [Interruption.] As the hon. Member for
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Wolverhampton, South-West (Rob Marris) is trying to prompt me to say, there have been considerable advantages on telephony, as a result of roaming charges, and before that, there were many significant advances on telephone costs. Those are all achievements of the single market concept.

The European institutions also stop Governments doing foolish things. I am tempted to mention Northern Rock. Of course we can all criticise what the Government are doing, and the press will do so, but the one institutional constraint on the Government’s aid to the bank is the European Union. That is what is binding the Chancellor of the Exchequer; he is totally constrained by the EU. Those are some of the many practical ways in which the single market benefits us.

Mark Pritchard (The Wrekin) (Con): I accept what the hon. Gentleman just said, but does he accept that if we signed up to a single monetary policy, there would be greater restraint on future Governments, whether Labour or Conservative?

Dr. Cable: Or Liberal Democrat, for that matter. Yes, there almost certainly would be greater restraint, but I think that we all accept that that is not the debate that we are having now. I think that all parties are committed to having a referendum on that possibility, if it arises in future, as it may well do.

Of course there are concerns about the single market. First, many UK businesses worry that their liberalisation is not reciprocated. A few days ago I was at Royal Mail’s south-west London sorting office—a very efficient installation. When I looked out of the window, I saw the headquarters of TNT, a Dutch competitor. The general manager said, “I’m all for liberalising the Royal Mail market, but why can’t the Germans, the Dutch and the French do the same?” and he is quite right. The logic is that prising open the other European markets will require stronger, not weaker, intervention by the Commission and the European Court of Justice.

Precisely the same point can be made about areas in which there is frustration about the slowness of the single market’s progress—a point to which the Conservative spokesman referred. The obvious example is services. It has taken years to get any kind of agreement on services in Europe. The agreement that we reached in 2006 is fairly weak; it does not respect the underlying principle of the origin of the country concerned, which is what would really open up a services market, which does exist. Clearly, for services liberalisation to progress faster, there would have to be more qualified majority voting and more European Union decision making on the matter.

Finally on the single market, the right hon. Member for Wells said that all progress has come at a price—at the cost of regulation in Europe. He is right up to a point. There is a lot of unnecessary bureaucracy associated with European regulations and directives. Of course, we have often compounded it by gold-plating them here. The Secretary of State was right to point out that there is now a process—the Lamfalussy process—for making the system much more efficient. The question that I would pose to the right hon. Member for Wells if he was still in the Chamber is this: what is the counter-factual case? What is the alternative
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to having a bureaucratic regulation? It is probably having 27 bureaucratic regulations across Europe, which would compound the cost many times over.

Let me briefly cover the items allocated for today’s debate, and the treaty powers relating to economic matters. The euro procedures clearly do not apply; I answered an intervention on that point. Other issues include the definition of the framework for commercial policy, which I do not think is controversial, and the co-ordinated approach to self-employment. I would have thought that such an approach was sensible. We have rules governing freedom of capital and professionals, but not self-employment, as would be logical.

The issues to do with intellectual property rights are trickier. As I understand it, the measures will make it easier to have common European Union rules on copyright, trademarks and patents, which will make it easier to do business that involves them, and that will be good for British intellectual property right holders. However, as the Secretary of State conceded, when it comes to patents, the tricky issue of language has not been resolved. We will still not have unanimity, and that is a source of frustration. As the author of the Cable Bill—that famous copyright protection legislation—I look forward to seeing copyright protected across the whole of Europe, in a way that accords with the sanctions that I introduced in the House. Those are not issues on which there is a great deal of controversy.

On the important contribution made by the right hon. Member for Holborn and St. Pancras (Frank Dobson), one of the less discussed issues is that of what are called general services, of which the NHS is an obvious example. My understanding of the protocol governing the treaty is that it does not take us very far towards a common approach to NHS entitlements. In fact, article 2 of the protocol says:


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