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Mr. Davey:
In a second; I am answering the point made by the right hon. Member for Richmond, Yorks. Those reports would have provided extra information in the form of memorandums, and ministerial scrutiny through extra debates and votes. The accountability
procedure that we ensured through our negotiations in the other place is so much greater than any accountability procedure that any past Conservative Government allowed. The fact that the right hon. Gentleman failed to acknowledge that does not do him any favours.
Mr. Hands: I thank the hon. Gentleman for giving way. On Liberal Democrat behaviour in the Lords, I clearly remember his walking out of this Chamber when he was not allowed to have a vote on in or out. Could he take a moment to explain why his colleagues in the Lords abstained on the very same question?
Mr. Davey: I was going to come to that, but I am very happy to deal with it now. The hon. Gentleman ought to apologise, because he and his friends prevented us from having such a debate in the elected House. If we had had one—if he had allowed it—he might have had a stronger point. He failed to allow that vote here, so he really does not have much of a leg to stand on.
Mr. Jenkin: The hon. Gentleman has made something very clear, which, understandably, none of us really understood before. He walked out of this Chamber in disgust at being unable to have a debate on a topic on which he was going to abstain. Is that correct?
Mr. Davey: Absolutely not, and the hon. Gentleman knows that because he knows our position on the issue. If he and his friends had allowed the democratic Chamber to have a vote, he would have a strong case, but he failed to do that, so we will take no lessons from him on this point.
One of the major issues at the European summit will be oil and food prices, which are affecting our constituents seriously. When they go the pump to fill up their car and go to the supermarket, they see prices rising horrendously, and that is affecting our economy overall and many businesses. Some of the problems affecting our economy are home-grown, such as the many problems caused by the Government’s incoherent tax policy, but to be fair to them, some of the causes of our economic problems are international. If there is to be any possible solution to or mitigation of them, that will be found through working with international partners.
The biggest global economic challenges—the huge rises in energy and food prices, and oil touching $140 a barrel—are going to require major international attention over the next few months. The international community needs a shared understanding of the dynamics of commodity price inflation, and of which factors are short term and will pass, which are cyclical and which are long term and structural. If we can get a shared understanding, I hope that we can agree a shared policy response—be it on agricultural policy, oil and energy supply and demand, influencing the destabilising speculative investment in commodities, or whatever we collectively decide the cause is.
Such international co-operation will be at different levels. The recent UN summit on food in Rome was an important initiative. We saw the limitations—the problems with Argentina vetoing some of the better proposals for tariff reductions—and heard the discussions with and between the countries of the Organisation of Petroleum Exporting Countries. Saudi Arabia was very important in that regard, and we welcomed its announcement on
increasing oil production. However, it is not really clear whether that will go far enough even to test one of the theories on the causes of these oil price rises—that they are connected to all the speculative money coming into oil. All these arenas are important in trying to deal with these problems, but the question for this House today and for the summit is how best to maximise the UK’s and the EU’s influence on these damaging price rises.
Within the EU, we have a much better chance of being heard—whether it is at the G8 or the UN, within the OECD and so on—because we have the potential to speak as one. If we can persuade other EU countries to adopt better responses to the situation—if we can push for better EU-wide frameworks, be they in energy or agricultural policies—collectively, we can have a much bigger impact. I say in passing that if we can persuade the EU to focus its aid budget on the poorest, who are hit hardest by some of these price rises, again, collectively we can do more good than by acting in isolation.
The question for the summit is: if that is the theory of EU co-operation, can the summit deliver? It has not been mentioned in the debate so far, but the Commission has prepared two papers for the European Council to consider: one on the rise in food prices, and the other on the rise in oil prices. I have studied them, and they make a great deal of sense, although they do not say a lot that is new; the Foreign Secretary touched on the health check for the CAP, which I shall come to in a second, but they largely confirm the existing direction of EU policy. In their analysis of the problem, both papers argue that the price rises have short-term elements, but they focus on the worrying thing for us all, which is the fact that underlying structural changes are not just evident but strong, and they will demand major changes in how we in this country, and people elsewhere, do things.
The volatility of food prices is a phenomenon that has been known for decades in economic analysis. Clearly, some of that volatility comes from the short-term effects of the droughts in Australia and the lack of investment in recent years because of rather low food prices historically, but there is much more to it than that. The longer-term trend of increased global demand, because the populations in China and India are becoming wealthier, changing their food habits and so on, will have a major impact on food supply and food demand. What we are beginning to see is only the first signs of that.
As I said, the CAP health check is welcome. The European documents claim that it will lead to further reductions in the link between direct payments to farmers and production, so that market signals are stronger, and we hope that that will raise production. Liberal Democrats, having long argued for CAP reform in that direction, support the measure. I hope that the Minister can respond on this matter, because there have been reports of some EU countries wishing to use the food price crisis to reverse the reform direction of the CAP and argue that we should increase subsidies, rather than trying to phase them out. I hope that he can assure the House that our Government will be firm in opposing such moves, as they go in completely the wrong direction. Will he also say whether the EU’s position ahead of the next meetings for world trade talks will also take that into account, because if we are to encourage the smaller farmers around the world to increase their production
and productivity, surely the case for reduced EU agricultural subsidies in the Doha round is even stronger?
My only query on the Commission’s communication to the summit on food prices is that it does not engage with some of the even deeper, more alarming challenges for world food supply. One keeps hearing from the UN that we must raise production and productivity, and that is obvious, but the issue is that the production must be sustainable, as must increases in it. People refer to the green revolution that has taken place in recent decades, which has enabled food supply to increase. When one begins to examine that in detail, it is worryingly fragile—that is true even in respect of the increases in production in past decades—primarily because of the poor use of water around the world. I do not know whether the Minister is aware of estimates that 200 million Indians are surviving on food production made possible by the unsustainable use of underground water aquifers. In the next decade or two, those aquifers will be exhausted and the food supply that is feeding 200 million Indians today will no longer be there. When we start taking account of such things—even before we have taken account of global population growth—we can begin to see the huge strategic challenges that face the world. I do not believe that either the UN food summit or the Commission’s document faces up to those more strategic issues.
On oil and energy, the Commission’s document is more concrete on the medium term, despite the fact that it is slightly wishful about what can be done in the short term. That is a significant positive sign for the European Union, because the document shows that the EU has been doing a lot in this area. It has been ahead of the curve, rather than behind it, as it needs to be because of the increasing dependency on imports to the European Union, including, of course, imports to the UK, of fossil fuels—oil, gas, and so on.
The European response has focused on increasing renewables and on the energy efficiency action plan, and, if anything, its proposals have been too modest. People in this House and in this Government have said that the EU is perhaps being too demanding in wanting both a big increase in renewables and a big improvement in energy efficiency. However, given higher oil and energy prices—leaving aside climate change—the need for these programmes is ever greater.
What I would say—perhaps the Conservative Front-Bench team will echo this—is that we need to ensure that other countries take those plans seriously and implement them. It is all very well having the summit, signing up to the plans and having great schemes, but what happens if we are the only ones who are serious about increasing our renewable supply and improving energy efficiency? Will the Minister tell us about progress on the second round of the emissions trading scheme? The right hon. Member for Richmond, Yorks touched on that important European initiative. Can the Minister say whether the European Union is trying to export it? I hope that we can move it outside the European Union members and include other countries and some of the states in the United States, be it California or elsewhere, as that would be a step forward. The Slovenian presidency was right to make oil and food prices its top priority for this summit, and I hope that the meeting can ensure
that Europe plays a strong role in both the immediate and medium term to find ways through the current crisis.
I am sure that colleagues on the Conservative Benches will be pleased to hear that I wish to discuss the challenges posed by the Irish no vote in the recent referendum, which was clearly a setback for those of us who support the treaty. I shall explain, as I began to do in earlier remarks, some of the benefits that will be lost if the Lisbon treaty falls. I repeat other colleagues’ comments that we have to respect the Irish, and that the EU must not bully them. Those should not just be words; they should be facts. We cannot push the Irish to a solution that we want but they do not. It is plain, given the rules of the game, which we must respect—in this, again I agree with the right hon. Member for Richmond, Yorks—that nobody can say that just because Ireland is a small country, it cannot veto the process. It can veto the process; that is called due process and the rule of law.
The treaty’s future, assuming that the other 26 member states ratify, lies in the hands of the Irish Government—no other conclusion can be reached—so we have to listen to them at the forthcoming summit. I make one request of the UK Government, which I believe to be legitimate, as they listen to the Irish Government and then respond on behalf of the country. Although we, of course, need to listen to the Irish, our Government should ask them for a decision relatively soon. Without saying what the decision should be, it is legitimate for another member state to say, “You haven’t got years and years on this, because you are part of the European Union that has to work out how it will go forward.” It is legitimate to ask the Irish when they are going to make a decision. Hon. Members: They have just made a decision! The Irish Government need to tell us how they wish to proceed; that is the point that I wish to make.
Mr. Cash: The hon. Gentleman may wish to know that article 29 of the Irish constitution makes provision for the authorisation of this treaty through a referendum, which is direct, binding legislation by the people of Ireland under their constitution, and it cannot be changed by the Government or even by the Dail. That is a provision in the constitution itself, so the whole thing is not only as dead as a parrot; it is as dead as a Dido.
Mr. Davey: The hon. Gentleman normally educates this House with his detailed knowledge of European matters, but let me educate him about pop music. Dido is a singer, and she is very much alive; I think that he meant to refer to the dodo.
Mr. Davey:
Let me answer the point made by the hon. Member for Stone. I agree with his interpretation of the Irish constitution, and I think that there are only two possible wordings of the communiqué that will come out of the summit. The first is that the Irish Government are not going to make any further moves, and are going to say that the treaty is dead. Alternatively, the Irish will come up with their own plan—I stress that it will be their own plan. That would have to have a clear, defined
and limited timetable. The European Union cannot have uncertainty in the coming months, and that is a fair request to make of the Irish Government.
Mr. Hands: The Irish people have clearly voted no, but the hon. Gentleman is still calling on the Irish to make a decision. If the Irish had voted yes last week, would he still be waiting for them to make a decision?
Mr. Davey: Unlike the hon. Gentleman, I do not purport to speak for the Irish Government. They will report to the European Council, and that is one reason why the Liberal Democrats believe that it is right for Third Reading to proceed today in the other place. We have our procedures in this country and this Parliament, and they are different from those of the Irish. We have embarked on them and had months of debate, so there is no reason why we should not continue with them today. However, as I said on Monday when the Foreign Secretary made his statement—and as he confirmed in his response—the final stage of ratification, which is the deposit of the instrument of ratification in Rome, should await the European summit and hearing the Irish Government’s view.
The Conservatives say that they do not want to hear about the Irish Government. Their view of diplomacy is to prejudge and anticipate the meeting with 26 other Governments, but that is not the right way to conduct foreign policy. If we are to have a meeting with our partners, we should wait to hear what they have to say. Pulling stunts as the Conservatives want to do would undermine British influence, not just at this European summit but beyond, and it would play into the hands of the larger states who do not want to respect the smaller states. The approach that the Government have taken, and that we are taking in the other place, is the right one.
Sir Malcolm Rifkind: May I gently suggest to the hon. Gentleman that he is causing himself unnecessary confusion? The one reason why he is right to say that we should wait for the Irish Government is that they do have one option open to them, which is to say that at some future date there may be a second referendum. That is the only way in which Ireland’s constitution will allow them to ratify. It is a matter for domestic Irish politics whether a second referendum is a practical option, but until the Irish Government have made it clear whether it is on their agenda, it is not possible to say that the treaty is dead.
Mr. Davey: I agree, but while we should respect the Irish opinion and wait for the Irish Government to come up with a plan, we need a timetable. If the Irish Government say to the Council this weekend that they will not have a plan until the October summit, that will be their last chance. They will have to have a serious plan by the October summit, because it would be unacceptable for the issue to drift into next year. It would be bad for the European Union and, ultimately, for Ireland.
Mr. Adrian Sanders (Torbay) (LD): Is there not a third option for the Irish Government—to leave the European Union and let the other 26 member states ratify the treaty?
Mr. Davey: I would not support that, because it would be bullying. The message from the Irish voters and their Government is not that they want to leave the European Union. It is difficult to interpret what the message is, but it is not that they want to pull out.
Mr. Mark Francois (Rayleigh) (Con): The hon. Gentleman has sought to draw a distinction between Third Reading in the other place today and depositing the instruments of ratification in Rome. Is it the view of the Liberal Democrats that, assuming that the Irish Government do not give a clear steer on their intentions at the forthcoming summit and if the other place gives the Bill a Third Reading later today, Britain should not deposit our articles of ratification in Rome?
Mr. Davey: If we do not get a clear, timetabled approach from the Irish Government, finishing by October, there will be serious questions about the whole process of ratification, whether by the UK or beyond. The Irish Government must come forward with a clear timetable. I say that as a pro-European, because the pro-European cause would be seriously undermined if we had months and years of procrastination and delay. Whether one takes the Conservative interpretation of the Dutch, Irish and French referendums or other interpretations, there are clearly concerns about the treaty. Unless the Irish make their intentions clear in a relatively short period, it is probably right for the Lisbon treaty not to go ahead.
I say that as someone who supports the Lisbon treaty. I think that it has many benefits, but I have always argued that it is a modest treaty. Unlike some Conservatives, who thought that it was an earth-shattering major treaty, we have always argued that it was about sensible improved democratic accountability and the efficiency of the institutions, and included some welcome measures on issues such as energy policy. Were the treaty to fall, therefore, it would not be a disaster for the European Union. Indeed, the EU could operate on the Nice treaty. That is not something that we—unlike those on the Conservative Front Bench—seek, but it is true.
We have heard reference—implicit by the right hon. Member for Richmond, Yorks and direct by the hon. Member for Ilford, South—to some of the academic work on how the EU has functioned since the Nice treaty, especially that by Professor Helen Wallace. That shows that member states have managed to get through. I have spoken to Helen Wallace about her work. She does not necessarily accept the right hon. Gentleman’s full conclusions, because she believes that the Lisbon treaty would improve the situation further and would have many other benefits. Nevertheless, the European Union can go on without the Lisbon treaty if that is what transpires.
The right hon. Member for Richmond, Yorks has been very negative about the Nice treaty in the past. He now seems to be rather less worried about it, but he did say of it:
“Is not the truth, when we cut through the spin, that the agreement”—
“represents three more major steps to a European superstate?”—[ Official Report, 11 December 2000; Vol. 359, c. 351.]
Perhaps he can remind the House what those three steps were, and whether he has any intention of opposing them in future, should he ever come to office.
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