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6 Feb 2008 : Column 1047

Mr. Browne: The hon. Gentleman has made his argument, and it stands for itself.

To conclude, we do not support the Conservative amendment No. 237, and we wish the Government well in seeking to promote free and undistorted competition within the European Union.

Laura Moffatt (Crawley) (Lab): I want to oppose amendment No. 237. As I am Parliamentary Private Secretary to my right hon. Friend the Secretary of State for Health, I shall exclude from my comments amendment No. 223, which is on a health-related matter.

Our constituents watch us doing the important work of scrutinising the treaty and amendments and trying to improve it. It is right and proper that they ensure that we do a good job, but the principal aim of Members must be that the amendments make a difference to the treaty, which I believe to be a fantastic step forward for my constituents. Amendments Nos. 237 and 238 in particular will not achieve that—they will not improve the treaty that we eventually ratify, as I am sure we will, in any way, shape or form.

It is important to bear in mind where my constituents sit in the context of the United Kingdom’s economic well-being. My constituency is at the centre of what is described as the Gatwick diamond—and a diamond of a constituency it is. What my constituents will want to know is how the amendments will make it easier for members of the local business community to do their job. The area is highly prosperous, and attracts businesses from all over the United Kingdom and, indeed, all over Europe to settle close to the second largest airport in the country. Those businesses will want to know whether the amendments will make it any easier for them to do their job, and I do not believe that they will.

The treaty is a reasonable and proportionate response to the need to ensure that businesses can do their job. It enables us to deliver the rest of the Government’s agenda, and get more people into jobs and apprenticeships so that companies can thrive and extend their operations. Many of our constituents who will be affected by the treaty have openly expressed their belief that it will do in its current form, and they will take the view that the amendments will not help in any way.

In the earlier debate, Members quoted various experts. It was often quite difficult to understand who those experts were, and how they came to be experts. I think it more important for us to consider the views of members of the business community who are having to work in the European Union, and who are trying to do their jobs. They welcome the sense of partnership conferred not just by the internal market but by the benefits that it brings to the work force, and they are discomfited by proposals such as these from the official Opposition. They are made uncomfortable by the possibility of changes in the way in which they do business, gaining access to nearly 500 million consumers. We can feel confident that those consumers are being treated decently, and can reap the benefits of the good working conditions for which trade unionists in this country worked for many years. The European Union is now improving those conditions further, and the treaty is updating them.

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Let me end by quoting not an expert or someone who has put himself forward just to oppose the treaty, but a letter written to The Times in the middle of last year arguing against one of its leaders. The letter accepts that there are difficulties, that the situation is tough, and that we must work together and understand each other to deal with the problems that have been discussed in the House today. It concludes:

Mr. David Heathcoat-Amory (Wells) (Con): I strongly support amendment No. 237. I want to reintroduce a topic that was debated earlier. The single market, which is desirable in principle and was, indeed, one of the achievements of a Conservative Government, has ceased to be a mechanism for the reduction of barriers to trade and has instead become an excuse for regulation. It has released a regulatory impulse that is almost impossible to stop.

It has been observed that birds fly, fish swim and regulators regulate. Brussels and the European Union are full of regulators who make their living from passing laws, directives and more regulations. There is no proper countervailing force to stop that. It has become the hallmark of the European Union. Even business organisations—and certainly the Government—have been far too slow in realising the damage being caused to British and European competitiveness. The CBI has been instanced in our debates today, and its attitude during the Convention on the Future of Europe was feeble.

5.30 pm

Mr. Jeremy Browne: I share the right hon. Gentleman’s antipathy towards excessive regulation, but does he accept that some regulation is required to empower consumers to make informed choices when they are active in different parts of the single market?

Mr. Heathcoat-Amory: Of course any market needs a degree of regulation; that is obvious. The most extreme capitalist understands the need for laws; Adam Smith wrote books about that. Every market needs the rule of law, but that is not what I am referring to now. The point on over-regulation is not my observation; it as an observation the Government make. The Minister referred to attempts—of which we have had plenty—to turn back the tide and launch deregulatory initiatives in the EU. We have heard it all before; it never works or it never happens. I am a member of the European Scrutiny Committee. We are still on the receiving end of a blizzard of new proposals, directives and regulations. We were told that with enlargement everything would seize up if we did not get more majority voting in the constitution. That was another lie, of course. We did not need the constitution in order to enlarge, and we now have 12 new member states and even more laws are coming out of Brussels even without the extensions in majority voting in the treaty. So we are on the receiving end of a torrent of over-regulation, which far exceeds the rule of law necessary to regulate any free market sensibly.

Mr. Mark Harper (Forest of Dean) (Con): It is interesting to contrast my right hon. Friend’s argument with that of the hon. Member for Crawley (Laura Moffatt), who also referred to the views of business
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people. My right hon. Friend will know that a recent ICM poll of 1,000 chief executives found that 59 per cent. thought the burden of regulation was rising and more than half thought the benefits of the single market were outweighed by the cost of regulation.

Mr. Heathcoat-Amory: My hon. Friend is entirely right, and I am familiar with those figures. It is sad that one of our leading business organisations, the CBI, did not wake up to what was happening in the Convention on the Future of Europe. During the Convention, I wrote to the director-general of the CBI, one Mr. Digby Jones, to alert him to what was happening. He never bothered to reply, but he then had the brass neck to complain—not to me, but to the European Scrutiny Committee—that Parliament was not doing its job in stopping all these regulations.

Mr. William Cash (Stone) (Con): My right hon. Friend and I put the Lord Jones, as he is now is, to the test in that Committee. He could not answer our questions, and although he was complaining about us he had never made any representations. In my speech on Second Reading of the 1986 single market measures, I made the point that it would help if organisations such as the CBI took an interest, and to my knowledge it has taken no interest in the Committee since then.

Mr. Heathcoat-Amory: My hon. Friend recollects Mr. Jones—as he was, in a humbler incarnation, in those days. He has, of course, since become a Labour Minister and he is now even more complicit in—

The First Deputy Chairman: Order. Please can we now direct our remarks to the amendment?

Angela Browning (Tiverton and Honiton) (Con): One of the problems is that although many of us agreed with the initial concept of the single market—to remove tariff barriers and to have mutual recognition of goods and services—the welter of regulation introduced to bring about total harmonisation throughout the EU has been used as an anti-competitive device within the EU. As a former Minister who had to deal with the food and drinks industry, I know that every time a small British company such as a soya milk or mineral water manufacturer started to gain market share, their competitors within the EU used the single market to see them off.

Mr. Heathcoat-Amory: My hon. Friend knows that well, and she is absolutely right. It is striking that no other trade bloc has gone down this route of handing over its powers to a central organisation that over-regulates. The rest of the world is steaming ahead of us. That model, which is held up to be a paragon by Labour Members, has not been followed by anyone else and it is doing terrible damage to European competitiveness.

May I again refer to the Convention on the Future of Europe, on which I sat? I raised the question of European competitiveness in the wider world, but there was no interest in that. This little European attitude—this inward-looking obsession with harmonisation and standardisation in Europe—dominated all the proceedings. The real question is not whether one country is more competitive or productive than another in Europe; it is whether
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Europe as a whole is competitive in the wider world, because that is where we ultimately have to earn our living. That issue was never addressed in the Convention.

My point has finally been recognised in some quarters of the Commission. I am referring to a figure that has been published by the Commission. It is the estimate that the annual cost of all the over-regulation is as much as €600 billion. That exceeds the Commission’s own estimate of the added value of having a single market. Its website estimates that figure to be only €240 billion a year. Even by the Commission’s own arithmetic, the cost of all the regulation exceeds the supposed benefits of the single market in the first place.

Mr. Peter Bone (Wellingborough) (Con): I agree entirely with my right hon. Friend. We cannot overstate how much over-regulation there is. Later tonight, we will probably approve European Union document No.14,277—that relates to 2007. The amount of regulation is extraordinary.

Mr. Heathcoat-Amory: That is another example of the point. I think that all hon. Members have their own examples. I still cherish the memory of the physical agents (vibration) directive. [Laughter.] It really exists. It deals with the problem, only identified by the European Union, of something called whole body vibration. One would experience that if one sat on a tractor for too long.

The First Deputy Chairman: Order. Limited time is available and many Members wish to contribute, so may I ask hon. Members to confine their remarks to the amendments before us?

Mr. Heathcoat-Amory: I shall do that, but I must just mention the Lisbon process—I think that it is in order to do so. It was launched in 2000 and aimed to make the Union by 2010

We only have two years to go, and those words are almost comically at variance with what has happened. The gap between ourselves and the United States and far east has widened since, and the treaty does nothing to deal with it.

Rob Marris: Before I entered this House, one of my fields of expertise was vibration. I would be happy to talk to the right hon. Gentleman outside about the problems of vibration white finger and whole body vibration, which he pooh-poohs. Those are significant health problems in the European Union.

Secondly, the right hon. Gentleman said that nobody in the world is going in the way we have gone, but I must caution him on that. Since the founding of the Common Market—now the European Union—the North American Free Trade Agreement has been introduced and is expanding, and Mercosur in Latin America, which is on more or less the same track as the European Union —[Interruption.] Mercosur has a political dimension as well as an economic one. I would caution him against making a sweeping generalisation that nobody else is taking this approach—they are, because we are successful.

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Mr. Heathcoat-Amory: The hon. Gentleman is entirely wrong. I know a little about Mercosur because I was once a junior Minister in the Foreign Office and responsible for Latin America. I recall visiting Brazil, which is of course part of Mercosur and saying that one piece of advice that I wanted to give was not to set up anything remotely resembling the European Commission. The Brazilians said that they had learned that lesson. They said, “We know the damage caused by unaccountable bureaucrats sitting in private and dreaming up new schemes for everyone else. We do not want those proto-regulators with awesome powers, accountable to no one. We are not going down that route.” The hon. Gentleman will not find in the North American Free Trade Agreement or in Mercosur anything remotely resembling the European Union.

The customs union that we have in Europe is also practically unique and it has a damaging effect on the developing world. If a country is a member of NAFTA, it can do side agreements and bilateral deals with poorer countries to take their goods tariff-free. As we are in a customs union, we cannot do that. We are the fifth biggest economy in the world, but we have handed over our powers on trade to the European Commission. We are prevented by treaty law from making trade-expanding agreements with the poorest countries in the world. That is shameful, but it is the result of having a customs union and not being a member of a free trade area.

Ms Patricia Hewitt (Leicester, West) (Lab): I must challenge the right hon. Gentleman on that point. It was the European Union, with the British Government and public in strong support, that led the way in offering to the poorest countries in the world the “Everything but Arms” agreement, which allows quota-free and tariff-free access for goods from the poorest countries to the largest market in the world. The European Union led the way on that and the right hon. Gentleman is simply wrong on that point.

Mr. Heathcoat-Amory: Again, the right hon. Lady is wrong on that. The European Union is now trying to force economic partnership agreements on to those countries, which they do not want. We used to have a trade Department in this country, but now we have only half a Minister. If that Minister wants to do something practical for the poorest people in the poorest countries, he or she has to go off to the European Commission and try to be nice to Mr. Peter Mandelson, in the hope that he will do something.

Angela Browning: Having handed powers over to the commissioner, the UK Government no longer have their own seat at the table.

Mr. Heathcoat-Amory: That is what happens when countries export their powers as we have done, and grant a monopoly to a jurisdiction that they do not control.

The single market powers, as expanded in the treaty, will not protect us. I cannot be alone in witnessing de-industrialisation in my constituency. It must be even greater in more industrialised areas further north. I have seen manufacturing firms relocate from my constituency to eastern Europe as part of the single market. I have no quarrel with that if the firms are simply moving into another part of the European Union
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that can exert its comparative advantage of lower costs and perhaps greater efficiency. But they are doing that on subsidies given to them in the European Union budget. The workers in my constituency, through the taxes they pay on their wages, are contributing to the budget and paying to have their jobs relocated. They are contributing to the undermining of their own security. Of course, the situation is getting worse. Under the European Communities (Finance) Bill, which we debated and passed last month, our net contributions will go up to £6 billion a year. The bulk of that increase will go towards giving additional subsidies to the newer countries of the EU to aid the process of transferring jobs from this country.

Any idea that the EU is somehow a protective organisation is at variance with the facts. In my view, the EU is emphasising the rights of workers to move because of the fantasy that people displaced in such a way can relocate, as they do in the United States. The US is a genuinely free market within a single country. People locate from one state to another. They speak the same language and they have the same federal laws. If that is the aim for the EU, we should be told. It is quite wrong to expect that workers should pursue their jobs in different parts of the country and the different—

5.45 pm

The First Deputy Chairman: Order. That subject comes under the next group of amendments to be discussed.

Mr. Heathcoat-Amory: Of course, I want to stay in order, Mrs. Heal, but I think that the mobility of labour and the so-called protective features of the treaty are the subject of the amendments that we have tabled.

The main feature of the European Union that I want to explore in the time remaining is the use of the powers in the existing treaties that establish a single market to extend European legislation into new areas of policy. That is why my hon. Friends and I have tabled a number of amendments to cut and define better those powers.

I am thinking particularly of articles 94 and 95 of the existing treaty. They are increasingly being used not to establish a single market but to legislate in areas that are quite disconnected with it, because they use qualified majority voting. In a sense, everything can be traded or can cross borders. That is confirmed by a paper I was helpfully given by the Foreign Office during the Convention on the Future of Europe, which listed all the items of legislation that have been passed under the single market powers given by articles 94 and 95, of which 104 go far wider than the establishment of a single market. They deal with things such as money laundering, the art market, transnational organised crime, summer time arrangements, noise emissions, units of measurements, member states’ balance of payments, combating terrorism, anti-personnel landmines, counterfeiting, civil protection, budgetary discipline and social security relating to employed persons.

Of course, the same idea relates to the matter of health, which is the subject of a number of amendments in this group. The EU regards health as a legitimate area for legislation under the single market articles
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because health can be traded and because health care can be experienced across borders. Using the single market, the EU has expanded its powers into the new areas. That so worried the working group that I was on during the Convention that it recommended amendments to the treaties to redefine the market powers and to ensure that they are used only to bring down barriers and to enact measures that are genuinely and intimately connected with the establishment of a single market, rather than to expand EU powers into new areas by qualified majority voting in the way that I have described.

Those amendments were entirely rejected by the secretariat and the presidency of the Convention on the Future of Europe. To me and others, that showed that the exercise was a sham and that there was never any intention to relinquish any powers. Even though a majority in the working group supported some amendments to restrict those powers, they were overturned and ignored. No such change ever found its way into the final document or the constitution, and so nothing to that effect is in the Lisbon treaty.

I end by supporting the conclusions expressed by my hon. Friend the Member for Rayleigh (Mr. Francois) about exclusive competence. It is quite wrong that competition policy should be made an area of exclusive competence, and I can claim in support of that contention a letter written by the right hon. Member for Leicester, West (Ms Hewitt) to the European Scrutiny Committee in January 2004, when she was Secretary of State for Trade and Industry. In the letter, she made the correct observation that

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