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competition rules under Articles 81 and 82 are an area of shared competence.
I agree, so why are they now to become an area of exclusive competence? The distinction is very important, as the Government recognised at that time. If competition is an area of exclusive competence, member states are forbidden to legislate in respect of it, even if the aim is to promote it. Therefore, if the treaty goes through in its present form, we will not be able to have a competition policy or authority or competition laws even if they support the EU aim of encouraging greater competition.
Mr. Heathcoat-Amory: The right hon. Lady shakes her head. Perhaps she has forgotten what she wrote in 2004, and it might be slightly unfortunate for her that I have kept some of her letters They were very good, and the European Scrutiny Committee relied on them. Has she changed her mind? Does she now support a treaty that overturns her earlier observations and turns the articles that we are discussing from areas of shared competence into areas of exclusive competence?
Another of the amendments that I have tabled deals with shared competence. As things stand, the whole of the internal market will become an area of shared competence. That is not as bad as it all becoming an area of exclusive competence, but the treatys definition of shared competence means that, when the EU legislates in this area, we cannot. That goes very much further than what the Government wanted at the time. They tabled an amendment to define shared competence
differently, and it stated: Member States shall respect the obligations imposed on them by the relevant Union measures.
That was sensible, and it meant that member states could not legislate in direct conflict with a specific bit of legislation passed by the EU. That was a narrow definition of shared competence that all of us could support, but the definition in the treaty goes much wider. The whole area is therefore vulnerable: if the EU legislates in that competence, member states cannot. Once again, that shows that the treaty amounts to an enormous transfer of power, from Parliament and the people whom we represent to the EU.
Ian Lucas (Wrexham) (Lab): I strongly oppose amendment No. 237. We had an instructive debate earlier this afternoon, and the amendment, too, is instructive, because it goes to the heart of the problem facing the Conservative party in 2008.
The Opposition seem to believe in the single market, but for the UK only. Essentially, in addition to the powers that will exist at EU level, amendment No. 237 would give the UK Government power to legislate in specific areas within the single market. Of course, if the UK Government could legislate in that way in the single market, other Governments across the European Union would want to do the same. That would drive a coach and horses through the entire concept of the single market. It would break down access to the markets that create jobs in the communities that we represent.
I have been sitting in the Chamber waiting to talk about the single market for a considerable time, because it is an extremely important issue for the individuals whom I represent. It is of vital concern to everyone in Wrexham. It is not an abstract constitutional concept; it is about peoples livelihood, future, wealth, and education. It is about the way in which they live their lives. Since 1997, when a Government who believe in the single market and the balance of social protection came to power, there has been a civilised improvement to the lives of the people whom I represent. The Conservative party does not understand that. It has no concept of which issues are important to the people I represent.
I was appalled to hear what the right hon. Member for Wells (Mr. Heathcoat-Amory) said about de-industrialisation. I will tell him about de-industrialisation: it is what happened when I was growing up in Tyneside in the 1980s. I took advantage of the single market and went to work in Germany because there were no jobs in Tyneside. De-industrialisation happened in Wrexham, the community that I represent, where 20 per cent. of the population were unemployed. Today, that figure is only 2 to 3 per cent. One of the big issues in Wrexham now is people from other EU member states travelling to the town to work. We do not have de-industrialisation. Let me tell the Conservative party why Labour won the last three general elections: it is because we have success
Ian Lucas: The amendment is essentially about imposing additional burdens on the single market. The Opposition need to be honest about their position. The Conservative party does not believe in the single market; it is a protectionist party, and it is proposing a protectionist measure. There is no question about that. Anyone who can read can see that set out in black and white.
Mr. Harper: If what the hon. Gentleman says is true, how does he explain the fact that the right hon. Member for Neath (Mr. Hain), who did some of the negotiation for the Government, tried to change the constitution by doing exactly what our amendment proposes? The difference is that he failed.
Ms Hewitt: My hon. Friend is making an extremely important point. Does he agree that by strengthening the EU institutions powers on the competition rules that are necessary for the internal market, the treaty will allow Britain to ensure that its businesses can get access to markets in other parts of the European Union where protectionist tendencies have been all too evident? The Opposition claim to oppose those tendencies, but they do not support the strengthening of the EU powers that is needed if we are to counter them.
Ian Lucas: My right hon. Friend makes an excellent point. The reason why companies such as Wockhardt of India, Sharp of Japan, and Ipsen Biopharm of France have moved into Wrexham is that it is in the European Union and has access to a market of 500 million people, and they wish to export. Many of the manufacturers in my constituency, where unemployment has fallen from 20 per cent. under the Conservatives to 2 or 3 per cent., are exporting. They are manufacturing and exporting in the single market.
Chris Ruane (Vale of Clwyd) (Lab): My hon. Friend is giving an excellent exposition from the perspective of Wrexham. Does he agree that 68 per cent. of Welsh exports go to the EU, and over 500 companies in Wales export to the EU? To go down the track proposed by the Opposition would lead to another Tory recession in Wales.
The contribution by the right hon. Member for Suffolk, Coastal (Mr. Gummer) was instructive. He made an excellent speech, which should be read by anyone who suggests that the Conservative party is moving towards a position in the centre. The right hon. Gentleman is entirely out of step with all those at present sitting on the official Opposition Benches.
Protectionism will not bring jobs to my constituency. I oppose it absolutely. It is the wrong way to go. What we need is a balanced approach, as set out in article 2 of the treaty of Lisbon, which takes into account social responsibilities and social rights, balanced by a successful internal market. The amendment must fall.
Mr. Harper: I start by picking up seamlessly from where the hon. Member for Wrexham (Ian Lucas) finished. It is worth noting brieflyI shall not labour the pointthat one of the benefits that Welsh companies have had is some of the objective 1 funding, which has done nothing more than move some of the jobs from constituencies like mine, in England but on the border with Wales, a few miles down the M4. It has not been job creation so much as job moving.
Mr. Harper: I was not referring specifically to the hon. Gentleman. I was referring to the point about Wales generally, which the hon. Member for Vale of Clwyd (Chris Ruane) made. I know for a fact that many companies in Wales have had some of that funding. Instead of locating in constituencies like mine, they have moved to constituencies in Wales. There has not been a net benefit to the UK at all. The funding has simply moved the jobs around.
I shall speak to the amendments tabled by my right hon. and hon. Friends, starting with amendment No. 237. As I said briefly in an intervention, the Governmentand the right hon. Member for Neath (Mr. Hain) was working on behalf of the Government at the timewanted to do exactly what our amendment says. I shall read out an amendment that he tabled at the Convention, on which my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) served.
The Community does not have exclusive competence in relation to measures to ensure free movement in the internal market. . . If the Community were to have exclusive competence . . . Member States would have no power to take any measures (e.g., in relation to the protection of health or consumer protection) which could affect free movement, nor to establish rules to promote competition.
Member States currently exercise powers in these areas. The Community has power to harmonise the rules in these areas, but authority to take action . . . is . . . shared.
One of the key points, which was not touched on in the debate on the motion and has so far been dealt with only by my right hon. Friend the Member for Wells, is that competition is not an end in itself. On that I agree with one or two Labour Members. The purpose of a competitive market is to make our businesses more able to compete not just within Europe, but with the rest of the world. As a number of hon. Members said, Europe currently accounts for a significant chunk of the world economy and a significant chunk of world trade, but those of my generation are looking at what will happen over the next 10, 20 or 30 years. Because of the economic growth in other parts of the world, we need to make sure that we win business in India, China,
Russia and the fast-growing markets in south America such as Brazil and Mexico, and that we continue to do so in the United States, which will continue to grow very fast.
My concern is that this debate is in danger of becoming not little EnglanderI have heard that phrase thrown over from the Labour Benchesbut little European. We are focusing on the European market to the exclusion of the world outside. My right hon. Friend the Member for Wells highlighted a danger of regulationif we regulate within the European Union thinking only of the EU, we could handicap ourselves in competing in a global market.
Mr. Doug Henderson (Newcastle upon Tyne, North) (Lab): I want to make a serious business point, not a party political one. Does the hon. Gentleman agree that there will be temptations in a global world and global market for a company such as Airbus to source from areas with a cheap labour supply, provided that everything else is in order, and that it would be difficult to counteract that? Airbus, however, is in no way constrained by basic regulation in the EU; it can still compete internationally with Boeing. If there are constraints, they are to do with labour costs, not over-regulation.
Mr. Harper: I do not think that the industry and companies chosen by the hon. Gentleman are a terribly good example. They are very important to our economy and that of the US, but that industry and both those companies are heavily subsidised, either directly by the taxpayer or, in the case of Boeing, indirectlyit is allegedthrough defence contracts and so forth. Governments are already heavily involved in those companies because of direct or indirect subsidies, so they are not a terribly good example of competitive businesses.
Before I came to the House, I worked for an American multinational that competed and had manufacturing operations across the world, including some in Europe. I know some of the realities of business and how it is conducted around the world. I am keen for British companies, those based in Britain employing British workers, and companies owned by British people, to be successful globally. That is one of my concerns.
My right hon. Friend cited the EUs own estimate of the cost of regulation compared with the cost of the single market. I just caution Members on both sides to remember that however important the single market is today, it will become relatively less important for British companies as we go forward, simply because of the fast growth around the world.
The hon. Member for Wolverhampton, South-West (Rob Marris) made the point that some of the countries currently competing on the basis of cheap labour costs, such as India and China, are rapidly industrialising and want to compete at a higher level of added value. They are looking at design and moving up the food chain, as it were. We have to make sure that we sell to them, and they will be good competitors.
That is my concern about giving the EU exclusive competence in this area. There is a role for a British Government, still able to legislate in this area, to be moving faster and to be a good example of moving
things forward. One of the tragedies of the EU is that the Government have not been successful, with others, in moving that agenda forward.
Mr. Graham Brady (Altrincham and Sale, West) (Con): My hon. Friend is making an excellent contribution. In the context of what he is saying, does he agree that maintaining a more flexible labour market and less regulation is essential not only for the health of Britains economy but for the wider EU economy? Within the EU, we present a competitive challenge that sets the direction and tone that the EU has to try to meet. That allows the rest of the EU to compete globally.
Mr. Harper: My hon. Friend makes a good point. It is good if, within the EU, countries have the flexibility to think about more competitive economic policies and to set each other challenging goals to demonstrate what is possible in the world.
Just before my hon. Friend made that important point, I was going to mention the previous Lisbon process and the Lisbon European Council of March 2000. This is particularly relevant to this group of amendments. The Councils aim was to
make the European Union the most competitive and dynamic knowledge-based economy in the world.
However, the Government carried out their own study last year, and in January 2007 the Treasury and the then Department for Trade and Industry published a joint assessment of the single market. Among its findings were that
the rate of progressin terms of strengthening and deepening the Single Markethas slowed down.
Europe still lags behind its main competitors, notably the US,
competition can be expected to become more intense, with the rapidly emerging industrialising economies of India and China catching up fast.
That is exactly our concern. Since this Government have been in office, they and other European Governments have set themselves the right challengeto make Europe more globally competitive. However, according to their own assessment of just one year ago, they have comprehensively failed to meet the goal set during the previous Lisbon discussions.
One of the challenges for a future British GovernmentI think that it will probably have to be ours, because this one has simply failedwill be to set the bar higher, and to challenge Europe to be more globally competitive.
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