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That makes it very clear that the real loser from yesterday is the Chancellor of the Exchequer and the British taxpayer.

Sadly, that complacency is indicative of the Government's broader approach. We have seen it before over the alternative investment fund managers directive and the appointment of the Internal Market Commissioner.

Chris Bryant: I want to correct a mistake that I think the hon. Gentleman has made-probably because he was going on an earlier draft, rather than on the conclusions yesterday. The situation to which he refers would not involve a qualified majority; it would involve a simple majority.

Mr. Francois: If that point is correct, I accept it. Nevertheless, the principle still exists whereby we do not have a veto, and the burden of proof still lies with Britain in that situation.

As I was saying, that complacency is indicative of how the Government under-performed on the AIFM directive and on the appointment of the Internal Market Commissioner. There is a pattern of the Government failing to get stuck in until it is too late. That is why we would appoint a senior Treasury Minister to spend as much time as needed in Brussels, and a Conservative
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Chancellor would actually attend ECOFIN meetings to restore our credibility and authority at the negotiating table. It is time that the UK took its responsibilities more seriously in that area.

We need a better approach in Europe, and that includes sorting out the mess that we have been left with by Labour over the Lisbon treaty. My right hon. Friend the Leader of the Opposition has set out our proposals to sort out what we can of that situation. Our domestic proposals include a referendum lock on any future treaty that transfers competences from Britain to the EU; a primary legislation requirement for the use of any passerelle or bridging clause; and a sovereignty Bill to enshrine in law where ultimate legislative authority lies-the Kompetenz-Kompetenz issue, as German lawyers call it. Those proposals will greatly strengthen the EU's democratic accountability in this country and ensure that a treaty never again hands areas of power from Britain to the EU without popular consent.

We have also set out proposals for three British guarantees to fix the most damaging points of the Lisbon treaty and other outstanding issues where the EU's remit is unnecessary and problematic. Those proposals include a proper opt-out from the charter of fundamental rights, a restoration of the European Court of Justice's limited jurisdiction over criminal justice, and the return of Britain's opt-out from social and employment legislation in those areas that have proved most damaging to our economy and public services.

Chris Bryant: Will the hon. Gentleman give way?

Mr. Francois: In a moment.

The right hon. Member for Leicester, East (Keith Vaz), in his memorable time as Minister for Europe, famously said that the charter would have no more legal weight than T he Beano. The former Prime Minister Tony Blair told this House in 2007 that it was

The Government were subsequently forced to admit that they had obtained not an opt-out but a clarification, and that admission was made in exchanges with the European Scrutiny Committee, as I recall. So we ought to expect the Government's support on this point, which is about establishing in reality what the Government wrongly claimed to have obtained in the first place. On that point, I give way to the Minister.

Chris Bryant: I wanted to intervene on a previous issue. I was going to correct the hon. Gentleman again on the passerelle point; as he knows perfectly well, that is already provided for in UK legislation. May I ask him a very simple question? Does he believe that any of the requirements for which he is arguing would need treaties to be changed?

Mr. Francois: The passerelles require unanimity, but as we argued when we debated the Lisbon treaty, passerelles should be enacted only on the basis of primary legislation in this Parliament. The Government did not accept that; as I recall, they left things so that passerelles could be enacted through what would effectively be a statutory instrument, after a debate of only 90 minutes.

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Chris Bryant: That is a vote.

Mr. Francois: It is, but it is not primary legislation; that is the difference-allow me to correct the Minister on that point. Allow me also to correct him on the charter of fundamental rights, which I was just discussing. The Czechs asked for an opt-out from the charter of fundamental rights. They were told that the Council gave them a political decision to achieve that and they were then told that that could be attached to a future accession treaty as a protocol, which would give the opt-out full legal weight in international law. There is already a precedent for that methodology, and we would seek to follow it; if it can be offered to the Czechs, it can be offered to us.

Michael Connarty rose-

Mr. Francois: I give way one more time to the Chairman of the European Scrutiny Committee.

Michael Connarty: Unfortunately, there are no other Select Committee Chairmen here, but if there were, they could confirm that the Prime Minister gave a categorical assurance to the Liaison Committee that passerelles would be enacted only following a decision on the Floor of the House. In fact, only on the basis of a positive resolution in this House and the House of Lords would passerelles be enacted, and would a veto be given away in favour of qualified majority voting. Our Government have given a guarantee that they would not vote on a passerelle until such a positive resolution was carried in both Houses.

Mr. Francois: I have not been in the House for as long as the hon. Gentleman, but I know the difference between what he is describing and an Act of Parliament. We would require a full Act of Parliament before any passerelle was enacted; that is a significant difference. The issue could be debated at length in this House and the other place, and it would go through a Committee stage. Thus, giving up a passerelle, which we are not minded to do in any event, would be subject to full parliamentary scrutiny rather than being rammed through the House with minimal debate on a three-line Whip.

Mr. Cash rose-

Mr. Francois: I give way to my hon. Friend.

Ms Gisela Stuart rose-

Mr. Francois: I have given way quite a few times. I give way to my hon. Friend, who I believe may know a little about the issue.

Mr. Cash: The sovereignty Act that we are proposing also deals with the passerelle question. I do not want to put my hon. Friend directly on the spot, because this is a matter for the leader of our party as well as for the party as a whole, but does he not tend to agree with me-I urge him to agree with me very much-that such a sovereignty Bill would have to be totally comprehensive to ensure that we reaffirmed the sovereignty of this Parliament? We would need to guarantee that, as with other supremacy of Parliament amendments put forward by me-amendments that have already been endorsed
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by our leadership-any future changes that we may wish to make in relation to European legislation would be carried through.

Mr. Francois: The point of a sovereignty Bill is to guarantee the ultimate sovereignty of Parliament. My hon. Friend and I have discussed the matter before and I suspect that we will do so again. Nevertheless, the Minister has said that he does not think that there is a real issue. I offer him the judgment of the German constitutional court, not a court in this country. When the Germans looked at the issue while ratifying the Lisbon treaty, their judicial system raised serious flags about the growing influence of the European Court of Justice. The Minister may not agree with that court, but he cannot pretend that that judgment did not take place. There are issues that need to be addressed.

Mr. Davey rose-

Mr. Francois: I shall make a bit of progress now; I have given way many times.

We ought also to expect Labour support for limiting the remit of the European Court of Justice over criminal justice. Three years ago, the right hon. Member for Airdrie and Shotts (John Reid), then Home Secretary, said that the Government's view was that the EU's competence on that issue should not be extended. We plan to reinstate that position, which the Government have so weakly abandoned.

This is likely to be the last European affairs debate before the general election. It takes place against a certain background: the European Union's standing in this country has never been lower, and I regret that fact. The explanation is simple. Under this Government, the European Union has become something that is often perceived to be done to the British people, not by them. More decisions to which the British people have never assented are now being taken at European level.

If, as I hope, the British people entrust my party with the government of the country at the next election, our task will be to put that right, to show that powers can be returned from the EU to a member state, to put Britain's role in the EU on a more positive footing and to give British leadership on the great issues that European countries face together-energy security, climate change, global poverty and global competitiveness. It will be our task to give the British people a European policy in which they can believe. We will seek a positive mandate for those changes at the general election. If that mandate is granted, we will seek to achieve them in government thereafter.

1.46 pm

Michael Connarty (Linlithgow and East Falkirk) (Lab): I am grateful to be called to speak in this debate. Unfortunately, when the financial regulations were being debated I was leading the European Scrutiny Committee on a pre-presidency visit to Madrid; I would like to have spoken during those debates. The Chair of the Treasury Committee was also elsewhere with his Committee, and he might have made a vital contribution.

The House wishes to pass a motion stating that it has considered the matter of European affairs. I hope it will agree that such consideration would not be complete if
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we did not give consideration to the process of parliamentary scrutiny. I shall come to that issue, in my capacity not only as Chair of the European Scrutiny Committee but as one who has an interest in the effect of the Lisbon treaty. I described that treaty as a tipping point, and I stand by that. It has changed the geography and processes of not only what will happen in Brussels but, I hope, what will happen in this House and elsewhere.

First, I should like to raise a few matters of substance to underscore the fact that we need changes to the structures to assist effective scrutiny. I turn to what I think are agreed to be the three new supervisory or watchdog committees on insurance, banking and the securities market in Europe. Those who, like me, have followed the process for many years will see that they are just beefed-up Lamfalussy committees. There was already the Lamfalussy supervision process, which proved inadequate, just as the supervision and regulation in this country was inadequate for dealing with the inventiveness and gambling of the banking, insurance and derivatives markets that brought this and many other countries to the serious position they are in, with massive public debt and taxpayers owning many of the banks.

For some reason, we have been unable to prevent banks from doing certain things; I noticed that Royal Bank of Scotland has put aside £940 million for bonuses, yet it has just been revealed that it might be exposed to the tune of £2 billion to the Dubai debacle; I think that the total is £5 billion among British banks, even with the latest scrutiny process.

The agreement on a European systemic risk board has not been mentioned. That would be a gathering of all the EU's 27 central bankers to try to do something consistently across Europe. I do not wish to score points about the weakness of Government or the failures of the regulatory authorities at our own level, but we should welcome that board. Together with the Americans, with the gambling nature of their banking, insurance and derivatives markets, we almost brought down the world's economies to the same degree as happened during the great depression.

I know that Opposition Members would not say this, but, as was mentioned in debates before the Council last November, without our Prime Minister leading Europe and giving a clear lead to the President of the United States, we would have ended up in a massive depression. It appears to me that allowing some other people a say and oversight in respect of the behaviour of our banking, insurance and derivatives markets is not very much to give up from London.

The European Scrutiny Committee will retain-and, I hope, use more and more-the right to call for an opinion from a Select Committee that specialises in another area of policy. We called for an opinion from the Treasury Committee, and that led to its inquiry and, I hope, fed some common sense into the debate on Tuesday.

I want to mention some matters that may seem minor but that are important to our constituents. If most of them read this debate up until this point, they would wonder whether Front Benchers live in the same world as they do. It was point scoring and personalising-more like "The X Factor" than a serious debate about what affects people's lives. For example, in 2005 the European Commission ruled that it was illegal for European citizens
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not to be paid the same wages and for people in the shipping industry in my area of Scotland not to be given the minimum wage. That is an important matter that was debated yesterday in relation to an amendment to the Equality Bill. However, it is still possible to use non-EU citizens, and such people are being paid £1.27 to sail boats between the islands and the mainland of Scotland. The Commission could ban that for people in the EU so that it would not happen to people who came from the A8 accession countries to work in the offshore industries. My constituents would welcome that. The TUC and the Scottish TUC are campaigning strongly to have such a provision extended to everyone through the Race Relations Act 1976. [ Interruption. ] I have just been told that there is a 15-minute time limit on speeches. That is not necessarily welcome, but useful to know.

Another apparently minor matter is the use of the European globalisation fund, which I have raised with the Scotland Secretary. That has become a fund into which people from different countries are dipping to mitigate the effects of recession, not necessarily the effects of the globalisation process. In the European Scrutiny Committee, we have insisted that such instances be reported to the House, in what we call an "A" brief, whenever they occur, because they are matters of interest. Some have been very serious. For example, in the automotive industry, when Saab lost more than 4,000 jobs Sweden asked for a contribution from the fund. Ireland got a substantial sum of money when Dell decided to pull out one of its factories. It was remarkable to find that the Netherlands got about £1 million following 570 redundancies in a construction company. Given the massive loss of employment in this country, if that is what the money is available for, we should be asking for it. Every time these funds are paid out, there is a net contribution from the UK. We should be similarly asking for funds, but for some reason the Government are not doing so. I have particularly made the point that we are losing to Ireland 500 jobs at Bausch and Lomb, which makes contact lenses. We hear that Ireland is getting money, while we are losing jobs. There is something wrong with that, and we should look at it seriously.

Let me turn to matters in the Committee's remit that we have been raising with the Government. First, I want to talk about enlargement. Most recently, that has centred on learning the lessons of the accession of Bulgaria and Romania, both of which, in the estimation not only of our Committee but of the Commission, still have an enormous amount of work to do in creating an independent judiciary and a system of governance that can and will tackle corruption and organised crime. We said at the time that those countries were allowed in too early, and they have been backsliding since. We have recently expressed to the Government a firm view about Croatia, which is next in line unless it is over-leaped by Iceland, which is looking for a rescue package for its financial crash. We say that Croatia must demonstrate actual conditionality. In other words, before accession, it must have a strong track record of effective implementation of the necessary machinery and success in tackling the ills that continue to blight it-that is, a fully functioning legal system and a track record of tackling corruption at the highest level.

Keith Vaz: I am grateful to my hon. Friend for bringing a sober approach to the debate without references to "Guys and Dolls", "Wacky Races", or any other
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such films-wonderful though they are, of course. Has his Committee considered the possibility of a formal twinning arrangement between existing member states and applicant countries or those that are new entrants to the EU? One of the problems is that once they join, we leave them very much on their own, but they need that kind of support. We welcomed Romania and Bulgaria entering, although I take his point about the timetable- but when such countries join they need additional help.

Michael Connarty: That is a very sound request and I hope the Government have listened to it. I am not sure that that facility does not already exist. I would hope that our diplomatic and foreign services are helping countries as they approach membership of the EU, and then afterwards when they are in it. From the parliamentary point of view, we have warmly welcomed the fact that our Clerks often go to countries that wish to enter, particularly to look at how they scrutinise and deal with European business. Having returned yesterday from Madrid, I have to say that we are the envy of most other countries, where scrutiny does not exist in the way it does here.

I will give a few pieces of evidence from the material I am drafting for our annual report. In our Committee, we have dealt with more than 920 documents coming from the EU. We have written reports, 456 of which have been published online and also given to this Parliament. We have referred 72 of those documents for debate in our European Committees, and we have called for, and had, debates on the Floor of the House on four occasions in the past year. Apart from those that claim to be mandating Parliaments-those of Sweden, Finland and Denmark-I do not think any other Parliament can show a better track record on Government scrutiny.

Mr. Goodwill: Does the hon. Gentleman agree that it might be more effective if Parliament got involved at an earlier stage, because in many cases the legislation is almost done and dusted before it comes to this place?

Michael Connarty: My hon. Friend-I regard him as a friend-has a very balanced view about these matters and many others that we share an interest in. I think we have a potential for earlier intervention that may be denied us if some of our Committee's requests are not listened to by the Government.

We are concerned about what is happening post-Lisbon; I am sure that Opposition Front Benchers will say, "We told you so." The main problem is that the Lisbon treaty creates a whole new concept of non-legislative Acts. Those need to be properly scrutinised. They will be decisions of the Council rather than legislative Acts. Unfortunately, Lisbon does not refer to their having to be scrutinised in any of the processes. We are requesting the policy papers that lead to the common foreign and security policy, which has been a concern of many Members, and the European security and defence policy, which will now not be legislative Acts. We are asking for a change in our Standing Orders specifically to say that legislative Acts and non-legislative Acts will be referred to our Committee for the scrutiny process.

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