16 July 2013 : Column 169WH

Westminster Hall

Tuesday 16 July 2013

[Mr Christopher Chope in the Chair]

National Parliaments and the EU

Motion made, and Question proposed, That the sitting be now adjourned.—(Mr Swayne.)

9.30 am

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): It is a great pleasure to have this debate under your chairmanship, Mr Chope.

The ageing process has some charming aspects, one of which is that a new idea arrives and I sit and think, “I think I have heard this somewhere before.” If someone hangs around long enough, they may even find that not only have they heard the idea before but that they have heard it before before. I had that feeling when I heard of the latest strengthening of national Parliaments within the European Union context. At that stage I decided to break one of my basic rules: over the years I have never taken part in an EU debate without saying something that I have not said before. I recommend that practice to others, but on this occasion I thought I would pull together some thoughts on national Parliaments and some of the problems over the past few years.

Yet again, the role of national Parliaments is essentially being used as a fig leaf to hide accountability for decision making at the European level. The fig leaf is being used by national Governments, and we should not fall for it. I had a feeling of déjà vu 10 years ago, when I went to the Convention on the Future of Europe. One of the five working groups was on the role of national Parliaments, and an old hand sidled up to me and said, “Remember the dud they sold John Major?” I said, “No, I don’t remember the dud they sold John Major.” And the old hand said, “Well, during Maastricht they introduced the concept of subsidiarity and proportionality, which was supposed to appease the national Governments. There was also then a review of competences across Whitehall.”

It was funny—I thought I had heard that before. The dud they sold Major was on the principle that national Parliaments should be given a role on policing subsidiarity and proportionality—the Convention on the Future of Europe was in 2002 or 2003—so I said, “When has the principle ever been invoked?” I was then told that it had been invoked only once, during the British presidency, when there was the bright idea that we wanted to standardise the water temperature for sea lions in zoos. That was a step too far even for Britain and was deemed to be out of order on the principle of subsidiarity and proportionality.

Subsidiarity and proportionality are being chucked at an interesting case that is currently going through—the representation of women on company boards. I find that quite extraordinary. The rights of women are now seen to be something at the behest of national Governments. I thought we had already reached equality. Please give me equality, but not because of subsidiarity.

16 July 2013 : Column 170WH

I will give a bit of history. In 1994, after Maastricht, national Parliaments were supposed to come to the rescue; and in 2002-03, they were supposed to come to the rescue again with a card system of yellow cards, red cards, vetoes and all those kinds of things. Yet again, we hear that national Parliaments are supposed to be strengthened, but in this place we are talking less about Europe than ever before. Previously, a small, select group of people would gather on Wednesdays ahead of a European Council meeting, and occasionally we would tell each other something that we had not said before. We considered the programme of the European Council. There were afternoon debates, and Ministers had to tell the Commons what was about to happen. Regularly, on the following Monday, the Prime Minister would give a statement on the results. Some Members will remember that we used to have great fun at those pre-Council meetings, because the Danes would usually have published the Council conclusions on their website ahead of the Council meeting. We made fun of that, but at least we talked about it.

What happens now is that debates ahead of a Council meeting are deemed to be Back-Bench business. I spent three consecutive Thursdays complaining about that to the Leader of the House, and I kept getting the same answer—that it is part of the Wright recommendations. We have overturned other parts of the Wright recommendations, so why are they suddenly sacrosanct? On top of that, the Prime Minister did not give a Council statement back in June because he said it was so boring, and he has combined the subsequent Council statements with hefty, serious foreign policy statements on other issues. The last Council statement was combined with a statement on Afghanistan. Both issues would have deserved a statement in their own right. National Parliaments are supposed to be coming to the rescue, yet Parliament is speaking less about the matter.

Emma Reynolds (Wolverhampton North East) (Lab): Does my hon. Friend agree that that retrograde step is particularly regrettable given that other Parliaments have actually started to improve their scrutiny? She mentioned the Danish Parliament, but the German Parliament now scrutinises the German Government’s negotiating strategy more closely ahead of European Council meetings.

Ms Stuart: Indeed. Ten years ago, the British Parliament was seen as having some of the toughest and most extensive scrutiny functions. We were also the first Parliament to open an office in the European Parliament so that we had representation there. Ten years ago we were a model that other people looked towards, and now we have fallen behind. We are doing less than others.

Mr William Cash (Stone) (Con): I am sure the hon. Lady would not want to move on to another subject without noting that the European Scrutiny Committee has now set up an inquiry into European scrutiny, to which she has given some very good evidence. Furthermore, last night the European Scrutiny Committee and two other Committees worked together to ensure that we changed the Government’s approach to the whole business

16 July 2013 : Column 171WH

of opt-outs and opt-ins and that the Government accepted the amendment that had essentially been drafted by the European Scrutiny Committee.

Ms Stuart: I fear to tread on the subject of the European Scrutiny Committee in the hon. Gentleman’s presence, because I know I would get it wrong. I would also rather rely on his intervening to tell the Chamber about the Committee’s work. It is significant that last night it was agreed that the negotiating positions had to be brought back to Parliament, but we all know that we are still only talking to each other in Committee Rooms rather than on the Floor of the House.

What would really improve national Parliaments? I am caught between a rock and a hard place, because I do not want national Parliaments to become separate institutions within the architectural framework of the EU. The EU has the Commission and the Council, but national Parliaments provide the majorities to form the Governments that send Ministers to the Council. There is, however, a little-known organisation that is known only to those who have been to some of its meetings—COSAC, which is the conference of European scrutiny committees.

Ten years ago, I was trying to broker a deal in that working group between national Parliaments so that COSAC would be strengthened in the red and yellow card system, but for that the MEPs would have had to leave COSAC. It is difficult for COSAC to arrive at a decision, because there are, say, four representatives from each country, two from the Government and two from the Opposition. If there is a coalition Government, in our case the representatives could be a Tory, a Lib Dem and two Labour Members, so there are probably three views among the four representatives. Consensus then has to be reached across 27 or 28 countries within extremely tight time limits. What then happens is that MEPs are the only people who are sufficiently united in their view and who caucus—they are usually united in the view that the European Parliament is good and national Parliaments are bad. The card system will not work unless the national Parliaments that exercise the veto have a network to talk to each other. If that network has an in-built number of MEPs who can outvote the national parliamentarians, it simply will not work. I do not know whether it is possible to change the job that COSAC does in such a way, but we will see.

Jim Shannon (Strangford) (DUP): I am following the hon. Lady’s remarks carefully. She refers to scrutiny as a key issue, but in Strangford, which has an agricultural and fishing base, it is not scrutiny that we want but changes in legislation to reduce red tape and bureaucracy. Does she feel that we can change things through the scrutiny that she refers to? If we cannot change things, scrutiny is no good.

Ms Stuart: The hon. Gentleman has gone to the nub of the matter. We need to decide what we think the role of national Parliaments is. Is it only to scrutinise? If so, we need to widen the base so that more Members take part more regularly. Or is it to get Governments to change their decisions at times? I think that it needs to be the latter, but a number of things have to happen to allow that. Early information is key.

16 July 2013 : Column 172WH

We also need information about how people actually act in the Council of Ministers. I have sat in the Council of Ministers, and I know that there is rarely a vote. If there is, it is seen as a failure by the civil servants that they have allowed the situation to arise. They do a head count to see whether they have a qualified majority, and if they do not think they will get the decision they want, they give in gracefully.

That takes me to what really needs to change. We need a proper Europe Minister. That is not to cast any aspersions on the current Europe Minister, but the position is a fallacy. Why are matters involving the European Union, which deals essentially with domestic legislation, placed in the Foreign and Commonwealth Office? Numerous Governments have tried at times to get the Europe function out of the Foreign Office. From what I gather, the trade union of Foreign Office Ministers usually gets together and it does not happen, but there is a question to be addressed there.

If the Europe Minister is in the Foreign Office and makes decisions and strikes bargains regularly, they might say, “There’s an idea here that affects agriculture on which we want some compromise”, or it might be on cigarette advertising, the working hours of junior doctors or any number of issues on which we can get a deal. Such deals are struck across various Departments. At that level of political bargaining, the House has no ability to scrutinise, take a role or even know what happens. We are simply given the end results. A Europe Minister should have accountability for our permanent representative in Brussels, UKRep, which does all those dealings, and be answerable to the House of Commons for the bargains struck. There was a stage when a previous Prime Minister, Tony Blair, seriously envisaged such a role, but for whatever reason it did not happen.

I can hear the outcry: “You can’t politicise UKRep!” I am not saying that I would do it the way that the Finns do it, for example—they call their civil servant before them every Friday morning—but Select Committees can call civil servants. There could be a regular slot for UKRep representatives when they come on a Friday to brief Whitehall Departments about what they have done. They could stay until the Monday morning or come on the Thursday afternoon to give evidence. If we do not want to do it at the civil service level—actually, I would rather do it at the political level—there should be a Minister who is answerable to the House across Whitehall Departments for negotiations, compromises and deals struck in Brussels. It would be such a far-reaching brief that the Minister would almost function as a Deputy Prime Minister.

Mr Cash: I am extremely interested in what the hon. Lady is saying, and I have often thought along similar lines. However, does she acknowledge that due to the critical mass of the European Union’s relationship with the United Kingdom, the Prime Minister and Downing street ultimately want to control all those matters? I suppose that that is understandable from their point of view. During the constitutional treaty discussions and the run-up to Lisbon, it was thought that the Foreign Secretary was out of the loop, because Tony Blair and the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) were in discussions but the Foreign Secretary was scarcely involved at all.

16 July 2013 : Column 173WH

Ms Stuart: That is not my recollection. The biggest thing that happened during the convention was the Iraq war, which meant that people’s attention was rightly drawn to other things. However, as I was representing national Parliaments and not the British Government, I had access to the Departments across Whitehall in a way that even a Cabinet Minister probably never has. I had a snapshot of what was happening in various Departments at any given time, and then I saw how people negotiated and traded things.

There is nothing wrong with that, but if we do not know what deals are being struck, we can neither approve nor disapprove. What happens is not uniquely British: every Government comes back with a success that they regard as an ultimate success for their own negotiating position, and think that they have shown all the others how they have failed. Anything that they do not like, they blame on the European Union. We will never be at ease with the decision-making process unless we actually know what is going on. We take notice only of the things that we do not like; there is no cognizance of the things that we do like.

This is about the Europe Minister and the accountability of UKRep. This place needs to get its head around how we can break open that decision-making process and make it accountable here. I think that I am right in saying that we still do not even know whether one of our Ministers was at the Council meeting or whether he or she was represented by a civil servant. Is that information available?

The Minister for Europe (Mr David Lidington): Parliament is usually told in advance by a Minister from the appropriate Department who will be in the UK chair for a meeting of the Council. Certainly, for the Foreign Affairs Council and General Affairs Council, I routinely table a written ministerial statement to Parliament that says whether the Foreign Secretary or I will be in the chair. In the subsequent report to Parliament about what happened at Council meetings, we have sometimes said that for a certain item on the agenda, the permanent representative was in the chair.

Ms Stuart: That is helpful. I hope that it applies not just to the Foreign Affairs Council but to all meetings that are open, so that we can know afterwards whether the Minister or a civil servant was there.

To give one example, I was on a committee considering defence procurement across Europe. Countries have a veto and can say that it is in their national interest for a particular piece of defence procurement not to come within the single market rules. There was a reference to how often the UK had used that veto, and I wanted to find out through written answers how often that veto was used by other countries, because without comparison with other countries a single figure is utterly meaningless; one cannot tell whether it is excessive or very low.

I think that the UK used its veto about nine times. If France had used its veto 315 times, there would have been something wrong. If France had never used it, I would want to ask a few more questions about why we had. The answer came back that the information was not available. The Foreign Office felt that it was not its job to answer for the European Union, but as an MP, I had no means at that stage to go further and find that information. Similarly, the Dutch had not fully signed

16 July 2013 : Column 174WH

up to that agreement. When I tried to find out why, I was told that that was an issue for the Dutch Government. That is a legitimate answer, but it does not allow us to understand how we are represented and how other countries are working on that.

Even if the Prime Minister does not wish to create a new role for a Europe Minister with responsibility across Whitehall—I can see why he might not want to do so, because it takes power away—let us consider the notion of the red card, yellow card or whatever colour it is. The card is meant to be a mechanism by which national Parliaments can say to the Commission, “Thus far, and no further. Step back again.”

When the red card system was first mooted, the Commission was up in arms, because it felt that it was insulting to suggest that it would ever bring anything forward that would breach the principles and could be objected to by two thirds of national Parliaments, or whatever. It subsequently got off its high horse and accepted the principle—but no more than the principle, that we can wave a card, because there is no duty on the Commission to withdraw its proposals or to come back with better proposals. Following the speech of the Foreign Secretary in Berlin, I gather that we now have ideas for an improved version of the red and yellow cards, and I look forward to hearing more about that.

Instead of the card system, however, perhaps the British Government will consider discussing with the Commission the idea of a delete button for legislative proposals. When we have a general election and the Government go, so do their manifesto commitments and legislative proposals; the slate is wiped clean. At the European level, there is no such delete button. Proposals that are not agreed in one parliamentary session, simply refuse to die. A classic example of that is the hallmarking directive, which comes up again every so often, because some countries have a particular interest. We can either negotiate something to death, so that it is almost meaningless, or we end up introducing something that, 10 years ago, when first introduced, was a good idea, but now no longer is.

One example was the effect of the working time directive on junior doctors. Negotiations on the working time directive started in the ’90s, with legitimate concerns about lorry drivers driving for too long, and so on. It was not until 1999 that I ended up trying to negotiate on opt-out for junior doctors, because we could tell that the working hours requirements would mean that the increase in doctors, which the Labour Government was bringing in, would be totally consumed in the first few years. We wanted the directive to be phased, but we then had court judgments that extended it even further. The political impact of that decision did not become apparent until almost 20 years after the original directive.

If democratic accountability means getting rid of decision makers when we think that they have made bad decisions, by the time a European Union decision on some things kicks in, it really is the Schleswig-Holstein question and only three people know the answer: one is mad, another is forgotten and the third is dead. If we had a process of completion that gave us some parliamentary input, we would know where the start and end points were, so we would know where we could use our influence and get the Government to take a stance.

16 July 2013 : Column 175WH

I hope that the Minister will tell us more about the red card, but I also hope that he will say more about whether he envisages Parliament having a role in affecting the decisions of the Government before they go into negotiations. Unless we know beforehand, not only in the European Scrutiny Committee but through a mechanism by which what is about to happen is discussed on the Floor of the House, we cannot influence it. By the time the Minister goes to Brussels, the deals have been struck. Any Ministers who have attended European Council meetings know that they go on the plane, they read their papers, they arrive in Brussels and UKRep gives them a brief with the lines to take. Anyone who tries to unravel anything is told, “That’s the deal; that’s it.” At that stage, anyone short of the Prime Minister cannot unravel the deal.

I want to leave the Minister with a final, incredibly radical thought—a radical retrograde step to some perhaps. At the recent Königswinter conference, I chaired one of the groups and, by way of introduction, I asked everyone to say, going around the table, one thing that they really loved about the European Union and one that they would get rid of tomorrow if we could. The group was half Germans and half Brits, and to my absolute astonishment there was a consensus around the table that the one thing that we should get rid of was the European Parliament. Then I realised the real difference between the Germans and the Brits. We talked about the connection never being made and how a double mandate was the way to link things, but for the Germans the double mandate was to use some MEPs as national MPs, while for the Brits it was to use some nationally elected parliamentarians at the Brussels level.

We must look at the workings of the European Parliament. It will simply not do that our contact with it is getting less and less. With the closed list system, fewer and fewer people know who their MEPs are. The relationship is not only fractured, but virtually non-existent. I am interested to hear what the Minister has to say even about some basic things. He may want to correct me, but we do not automatically issue passes for the House of Commons to Members of the European Parliament, so they have to queue up with everyone else. If we want a proper a dialogue, they ought to be here. I remember that we would not let MEPs have dining rights or book a room, because we thought that they would invade this place in order to enjoy the cuisine. [Interruption.] I give way to my hon. Friend the Member for Blackley and Broughton (Graham Stringer).

Graham Stringer (Blackley and Broughton) (Lab): I was not going to intervene, but my hon. Friend generously gave way before I asked.

I have two points to make on scrutiny and accountability. The European Parliament does not see itself as being accountable to national Parliaments; in reality, it is in competition, which is why many national parliamentarians around Europe are not in favour of the European Parliament, because it sees its future as taking over our role. Secondly, the rights of MEPs in this House were taken away some time ago.

Ms Stuart: The reason why I asked for the debate was to bring in some historical perspective, because since I have been in the House this is the third time that

16 July 2013 : Column 176WH

national Parliaments have been resurrected as the panacea for dealing with unaccountability. In the Scrutiny Committee, we have improved our function, but we have not extended that to the whole House. In fact, we have reduced the accountability of Ministers, and of the Prime Minister in particular, through debate in the House, in order for us to know what the Government are doing at the European level. Unless we have some structure or another to do that, we will simply never be at peace or feel that we know what decisions are being made on our behalf, whether we want to influence the decision or to scrutinise it.

9.57 am

Mr William Cash (Stone) (Con): I pay tribute to the hon. Member for Birmingham, Edgbaston (Ms Stuart) not only for securing the debate, but for the way in which she has deployed her arguments. She has been in the House for about 10 years, I suppose—

Ms Stuart: Seventeen years.

Mr Cash: Seventeen years! I am only getting close to 30 years. It is extremely refreshing to hear such cogent and well thought out concern about the whole European issue, which has dogged our political debates for the 30 years or so that I have been in the House—whether there is any connection, I cannot say. Today, the one thing that saddens me slightly and, I dare say, her, too, is that so few people are participating in a debate about what is at the heart of our democratic system. I regard this matter as being not “about Europe” but about Britain, and about democracy, which is not peculiar to any one country.

Our democratic systems have, in real terms, emerged since the 19th century, because of John Bright and others. I mention his name because the hon. Member for Birmingham, Edgbaston represents part of his old constituency, before it was Birmingham Central. His fight for the working-class vote was in essence the beginnings of our democratic system. The Conservative party, under Disraeli, gave in to the pressures. There is no need to go into the detail, but it was incredibly important and was based on the assumption that when people went into the polling booth and cast their vote secretly in a ballot box—that was the system that was devised in the late 19th century to ensure that the people had their say—we had a democracy. Other countries have run parallel with that, so the issue is not exclusively British but applies elsewhere in the whole of the European continent and the rest of the world.

I fear that with the movement towards bigger regional systems, even those who claim that they want world government ignore national identity, traditions and democratic systems, and therefore in essence national Parliaments, at their peril. The European Union, which I voted for as the European Community in 1975—I said yes—has since moved inexorably along a trajectory towards more and more centralisation and less and less national involvement.

The Minister for Europe is here. He and I have engaged in debates and discussions on the matter since at least 1988 or 1989, when I was first elected chairman of the backbench committee on European affairs in hostile circumstances. It was interesting that the national parliamentarians who then represented the Conservative

16 July 2013 : Column 177WH

party elected me in a secret ballot because I had put out a note explaining why I was standing, which was all about national Parliaments. I had written a pamphlet for the Bow Group called “A Democratic Way to European Unity: Arguments against Federalism” and I followed that up the following year with another called “Against a Federal Europe—The Battle for Britain”. I think I can fairly say—I do so without presumption—that what I set out in those two documents has remained the central problem.

The difference is that the evidence now demonstrates the analysis of where we were going wrong, which was further and further integration, and that was in the 1988 to 1991 period. Since then, we have had Amsterdam, Nice and Maastricht, and we have had the constitutional and Lisbon treaties. Irrespective of the evidence, both economic and political, there is increasing distrust not only in the United Kingdom but throughout the whole of Europe. I need not give all the Eurobarometer’s figures, but 72% of those in countries such as Spain and Italy have now decided that they do not trust the European Union. I presume to say that riots, unemployment and the rise of the far right are all things that I said would happen when I wrote those pamphlets back in 1988-91 and since.

Despite all that, as well as the Bloomberg speech and the movement towards a referendum—I believe that there will be a money resolution this afternoon on the European Union (Referendum) Bill—if I am being completely objective, nothing has changed except public opinion. The facts demonstrate that those of us who have argued this case consistently over a long period have been proved right. I am not saying, “I told you so.” The matter is far too serious for that because, as the hon. Member for Birmingham, Edgbaston said, it is about our democratic system.

National parliamentarians are elected by virtue of manifestos in general elections. We ultimately control taxation and spending. That is what determines the nature of our economy, and it also determines public services. If circumstances arise in which the economic and political situation in this country, let alone other countries, becomes dysfunctional and as a result we cannot deliver the prosperity that people want, not only will they become completely alienated from laws that are generated to exclude them from participation in a prosperous business and social environment, but the entire fabric of the European system will disintegrate.

The real problem is the treaties. The issue is no longer just a call for reform. I was anxious for reform, and I have called for renegotiation for as long as I can remember, because I thought the treaties would go wrong. Now that they have gone so wrong, there is no prospect of their improving the situation and, as I will explain, there is absolutely no sign that any Government in any European country are seriously grappling with the intrinsic problem at the heart of the treaties. Governments talk about renegotiation, but we are past that. The reality is that we must leave the existing treaties—I make this point in the context of our national Parliament and our own country—because unless other countries are prepared to face up to the fact that there has been a cataclysmic failure of the system, they will not be impelled to make the changes that are needed to achieve what I still believe in: co-operation on the European continent and in trade.

16 July 2013 : Column 178WH

I need not go into the arguments about trading, because we are talking about national Parliaments, but one reason why the British Chambers of Commerce and others have become so deeply disillusioned by the European Union in business terms is precisely the legislation that has come about as a result of being passed under the aegis of the treaties. Those treaties, because of the concrete framework of the acquis communautaire, cannot be changed without unanimity among all member states, and there is absolutely no intention whatever to make fundamental changes to the treaties.

Graham Stringer: The hon. Gentleman is making a profound point about the inflexibility of the European Union structure. Does he agree that the reason why European Union countries, with the possible exception of Sweden, are unlikely to withdraw support from the current treaties is that they have a history of fascism, communism or of being defeated in wars and controlled by other nations? They do not have the same confidence in their national democracies that we have in this country.

Mr Cash: That is absolutely correct, and is not disrespectful or a criticism of those countries. In the past month I have been to Lithuania twice, and I have great affection for that country. One has only to look at the way in which it has been brutalised for 150 years by successive dictatorships—the Nazis, Russians and Soviet Union—to realise why it would want the security of working within the framework of something bigger. The same applies to Estonia, Latvia and many other countries in central and eastern Europe, so there is an understandable reason for their wanting to play safe, as it were. However, it is not playing safe that is the problem, because the price that people will pay for allowing that democratic system to be so much at risk will be another collapse of those countries if the democratic freedom that they fought for disintegrates as a result of the European Union’s failures.

The fact is that tinkering with the treaties is not the only thing required. It is about the very foundations of the EU, which brings me on to the question of ever-closer union. Certainly that was embedded in the early treaties, including in the treaty of Rome. However, it was not capable of being implemented, unless and until the genie was gradually eased out of the bottle as a result of successive treaty changes. People are cynical about the 1975 referendum, and I understand why. There is plenty of reason to believe that, in fact, it was done with some cynicism by the then Prime Minister, Harold Wilson. However, the reality is that people such as Tony Benn and others, who were involved in arguments on the other side, challenged whether it would ultimately lead to political union.

Although I freely state that I voted yes in 1975, it was because, as far as I was aware, it was going to be a common market. It was not only that, however. It could only become more of an integrated, ever-closer union as a result of further treaties, which is why I most emphatically put my foot down on the Maastricht treaty—I tabled about 200 amendments, or whatever it was—and fought the arguments right the way through from beginning to end, because that was about the creation of European government. There is no disputing that, and I am very glad that the present Prime Minister stated in the

16 July 2013 : Column 179WH

House the other day that he thought that there should have been a referendum on the Maastricht treaty. He was right.

We do not need to go into the past too much, but the Maastricht treaty remains at the epicentre of the Lisbon treaty, because the Lisbon treaty is simply a consolidation of all the others. Anyone who cares to get those treaties out can see that, although I have to say that there are not many people who would. Sometimes even I have a great disinclination to get out the consolidated treaties and plough through them, although I notice that the Minister has them on his desk, with lots of little yellow flashes so that he can immediately leap to one article or another. However, I do not think this is about individual articles, nor is it about the intricacies of bits and pieces. It is about the fundamental structure.

Graham Stringer: The hon. Gentleman is right about the Lisbon treaty to a point, but does he agree that there is a fundamental difference between the Lisbon treaty and all the treaties that went before it, inasmuch as the passerelle clauses provide the right to change treaties without going back to the sovereign Governments and Parliaments?

Mr Cash: One of the most offensive kinds of provision that appear in our domestic legislation is the Henry VIII clause, as we call it. The passerelle clause has all the same characteristics; it is a capacity to make changes without having to go back to the source of authority. However, we have to pin our main concerns to the source of authority, which is the European Communities Act 1972 itself. I allude to the White Paper, which was brought out, preceding that treaty, in 1971, and upon which, as a result of a huge amount of discussion in Parliament but not so much outside, the United Kingdom Parliament decided to pass the Act on an apparently—I say “apparently”—free vote. It happened, however, because certain Labour Members at that time decided that they would back Edward Heath’s proposals for what was to be enacted in the 1972 Act.

That White Paper is the foundation of our national parliamentary commitment to the whole panoply, the tens of thousands of lines—millions, I suspect; I have never counted them, thank God—the fabric, the labyrinth and the inexplicable and completely impossible complexities of the legislation, as was clearly demonstrated in yesterday’s debate on the opt-out. The fact is that all that ultimately turns on one piece of legislation, which we entered into voluntarily in Parliament—no doubt some, or perhaps most, did so for the best of motives. What it said was that we will accept all the decisions that are ultimately taken in the Council of Ministers as the legislation of the United Kingdom.

At the same time, we set up a scrutiny process, which I shall come on to in a moment. However, the fundamental issue is that the White Paper stated unequivocally—I do not have the quotation to hand, but I am sure that I will in no way fail to express it clearly—that we must retain the veto in our own national interest and to do otherwise would not only undermine our national interest, but endanger the very fabric of the European Community itself. That was a very wise remark, because as Members will note from what I said at the beginning, the whole of

16 July 2013 : Column 180WH

Europe is in convulsion. It is faced not only with a democratic deficit, but with a democratic crisis, and there is not only a eurozone crisis, but a European crisis. It affects the whole of Europe, which is being contaminated by a complete refusal to look at the essential ingredients of the treaties.

Those fundamental questions are now being completely ignored. The hon. Member for Birmingham, Edgbaston referred to COSAC, which, as she rightly said, is not a well-known body. It is the meeting—periodically, but much more frequently these days—of the national chairmen of each of the European scrutiny committees in each of the member states. Believe it or not, its proceedings are recorded. They are even webcast—not, I suspect, that anyone knows that, but it is a fact.

In Dublin, only a month ago, I was invited by the EU presidency—then the Irish Government—to respond officially as the main respondent for the national Parliaments on the question of democratic legitimacy. Viviane Reding, who was meant to turn up, did not bother to. She sent a video, and I can assure Members that the Dublin parliamentarians were not at all amused. That is the manner in which we are being treated—that is all the member states. She said, unequivocally—I paraphrase her remarks—that we need a federation of nation states. It was completely and totally without any attempt to enter a dialogue or a debate. That was the line that she wanted to take; it had already been written. Viviane Reding is the vice-president of the European Commission and is responsible for justice and home affairs—the very matters on which we scored that notable result last night in upholding national scrutiny. However, they are not listening.

In Vilnius, the following month—only last week— Mr Sefcovic, the Commissioner responsible for relations with the national Parliaments and the European Parliament, made his position clear. I arrived in Vilnius at 1 o’clock in the morning, and I was back in London by 7 o’clock that evening. People said, “What on earth did you think you were doing going all the way to Vilnius for four hours?” I explained very simply that, as the Chairman of the European Scrutiny Committee—one of 28 national Chairmen—I had the right to be there and that, when I saw that the meeting was about the next steps towards political and economic union, I knew, in the light of what I know from other sources, that the EU has not the slightest interest in renegotiation; all it wants to do is to press on with the process of integration.

Leaving aside the scrutiny process, it was interesting that an increasing number of member state Parliaments are conscious of the impact that these issues are having on their populations, on which they rely for re-election, and of the fact that they must respond. A silent revolution is in the making. I am not going to exaggerate these things, but there is an issue when the Belgian representative gets up and starts talking about Belgium’s problems with democratic legitimacy. I cannot think of one of the 28 member states that does not, in the relevant chamber or outside, in the margins, over coffee, lunch or dinner, refer to the problem of democratic legitimacy.

The issue is terribly simple: if we do not get rid of the existing treaties and deal with the fundamental structure, there is no answer to the question of democratic legitimacy. We do our best in the European Scrutiny Committee. When I was first elected Chairman, at the end of 2010, the first thing I did was to set up an inquiry into the

16 July 2013 : Column 181WH

European Union and the sovereignty of the United Kingdom Parliament, which is basically what we are discussing. I wanted to get expert evidence, and we did. Our report came out, and we made it clear that national Parliaments actually have the last say. We voluntarily introduced the 1972 Act; that is what the principle involved in the Factortame case is all about. It is not, as some people believe, that we are locked into a completely irreversible situation. Although the treaties say, as the Maastricht treaty did, that the euro, once entered into, is irrevocable, individual member states must voluntarily decide to accept that system.

At the moment, there is no recognition whatever that things are going wrong. There is not the slightest intention to change the foundations of the treaties, which is absolutely what is needed if we are to preserve democracy in each member state, including in the United Kingdom. Whether we are in the euro is by the bye; the fact is that all the other legislation that affects our economy every day must be subject not merely to a competence review, but to a clear decision. I look to the Minister, because the issue is his responsibility, although he will, quite understandably, take his instructions from No. 10.

I admired the fourth principle of the Bloomberg speech, which said that the fundamental principles of our national democracy depend on our national Parliaments. The Prime Minister was right; the question is whether we do anything about that. We are promising a referendum in 2017, but that is far too late. The fact is that it should be held before the general election, because we have profound reasons for getting on with it. In Dublin, when I had finished making my rather strong remarks about the state of the European Union and the role of national Parliaments, the chairman of the Bundestag’s European affairs committee said, “We must have a referendum in the United Kingdom as soon as possible, because people do not like the uncertainty,” and that is right.

We now have two Governments and two Parliaments, both dealing with the same subject matter. That inherent contradiction is completely unworkable. There are attempts at assimilation, but they just create a more complicated labyrinth, as a result of which the whole situation becomes increasingly dysfunctional. What is more, the creation of a two-tier, two-Government, two-Parliament Europe with no real connection to anything is happening before our very eyes, without any treaty changes. That is why a referendum is required.

The fundamental reason for holding a referendum is that a fundamental change is taking place now in the relationship between the European Union and the United Kingdom. We are not talking about change in 2017; indeed, there may not be another treaty—I cannot say, although the Minister probably knows. However, whether or not there is another treaty, and whether or not there is renegotiation and some nibbling here and there—some of it may sound attractive to some people—that will not change the basic structure. That is what is wrong, and that is why national Parliaments must reassert themselves. They have the power to deal with their respective parties, particularly from the Back Benches, including by persuasion. I was extremely glad that the Government listened yesterday. It was partly a numbers question; we live in a civilised world, and we appreciate that there are times when Ministers recognise that they do not have the support that they need. Three Select Committee Chairmen

16 July 2013 : Column 182WH

got together—other members of the Liaison Committee were also involved—and that created a bit of a problem for the Government. None the less, we are grateful for what happened.

The hon. Lady mentioned consensus and the fact that there are rarely votes. I simply recommend that people read VoteWatch, which is produced by Simon Hix of the London School of Economics. It has demonstrated that where there could be different outcomes, all countries end up agreeing on 90% of the legislation, and I believe that the figure has increased since Simon Hix looked at that. Part of the problem is the qualified majority voting system and part of the problem is the co-decision system, but I shall park those issues. However, that is how the system overcomes the issue of what national Parliaments could decide for themselves if they regained the power that they should regain for themselves. I also recommend that people read Professor Damian Chalmers’s paper on democratic self-government, which will prove to be a seminal contribution to this debate. He will give evidence to the European Scrutiny Committee quite soon.

What worries me about the red card system is that it is a further indication of a refusal to grapple with the essential question—that we should end up as an association of nation states that have a veto where necessary, but that co-operate where possible. We should also be able to trade and to work in political co-operation with our neighbours, without being governed by them. The red card system is liable to increase federal arrangements. I do not see why, when this Parliament, as a national Parliament, says that it does not want a measure, we should then be obliged to say yes to it, just because we do not reach a certain threshold when other member states, for completely different reasons, say they want the measure or are not prepared to stand up and say that they do not want it.

That goes back to the fundamental question on which I will end. It is about the ballot box, freedom of choice and those questions that people fought and died for, and that should determine our attitude towards not merely nibbling at, revising or reforming the European Union, but dealing with the real problem: the foundations of the treaties themselves. It may be a big ask to expect the Minister to agree, but if we do not deal with that, just as those of us who found that what we said in the 1990s has not exactly been proved wrong, we will be in a similar place in 10 or 15 years’ time, and, regrettably, by then I fear it will be too late.

10.30 am

Emma Reynolds (Wolverhampton North East) (Lab): It is a pleasure to serve under your chairmanship, Mr Chope, in a debate that is of great interest to you. I congratulate my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) on securing the debate and on a characteristically thorough and forensic speech, which drew on not only 17 years in the House, but many weeks and months—I do not know how many—on the Convention on the Future of Europe. She is a real expert and it was a great pleasure to hear her this morning.

I agree in particular with my hon. Friend’s overall argument that national Parliaments need to play a much greater role in holding to account not only the

16 July 2013 : Column 183WH

European Union, but our own Government’s decisions on Europe and the formulation of European legislation and policy. She and many other right hon. and hon. Friends, some of whom are here this morning, want parliamentary scrutiny of the EU and what our Government do in Europe to be enhanced and improved. That objective unites pro-Europeans and Eurosceptics, and hon. Members from different parties alike.

I agree with my hon. Friend’s specific point that it is regrettable that one of the first actions of the Government when they came into power in 2010 was to do away with pre-European Council debates. It is unsurprising that she, and others present and beyond our debate today, complained repeatedly about the decision, but unfortunately it was to no avail. While other member states are improving their scrutiny of their Governments’ decision-making and negotiating strategy ahead of European Councils, our Government have taken a retrograde step and have in effect decreased scrutiny. The Government have not simply done away with the pre-Council debates, but the post-Council debates are now combined with major issues of concern—whether Afghanistan or the horrific murder in Woolwich. Such subjects and the post-European Council report need to be separate. They are too important to be combined. Notwithstanding the scrutiny of the European Scrutiny Committee, it is vital that scrutiny also takes place on the Floor of the House, as she set out, so that all right hon. and hon. Members have the opportunity to scrutinise how the Government represent the UK in the EU.

The starting point from which I approach the debate is perhaps different from that of some hon. Members who have spoken. I am a passionate believer in our membership of the EU. I am both pro-European and passionately in favour of reform. Just because I believe in our membership, that does not mean that I think the EU is perfect—far from it. I spent six years of my life working and living in Brussels; I have seen at first hand the many imperfections of the EU. A vital part of EU reform lies in the issue that we are focusing on today: strengthening the accountability that national Parliaments have over European decision-making.

The shadow Foreign Secretary, my right hon. Friend the Member for Paisley and Renfrewshire South (Mr Alexander), in a speech in January this year, set out proposals for a red card system. It took the Government five months to come to the same conclusion, but we were encouraged—better late than never. As hon. Members are acutely aware, the current yellow card system was introduced by the Lisbon treaty, which the Labour Government negotiated. It gives national Parliaments the ability to force the European Commission to reconsider its proposals if they believe that a proposal violates the subsidiarity principle.

Mr Cash: I do not think that anyone could honestly say that the yellow card system has been a stunning success, given the number of occasions we have reached the threshold. That is also a problem with respect to any possibility of a red card system, leaving aside the federalisation they both imply.

Emma Reynolds: I do not claim that the yellow card system has been a stunning success. As the hon. Gentleman set out, it has been used successfully on only one occasion

16 July 2013 : Column 184WH

—the so-called Monti II proposals, which were then withdrawn by the European Commission. Just because the yellow card system is not a success at the moment, that does not mean that it could not be made to work better. I will move on to that and better co-ordination of national parliamentarians in a moment.

The Labour party is committed to pushing for a red card system when in government. It would, in effect, turn the yellow card into a red card, by stating clearly that a third of national Parliaments being against a proposal is a veto. It would not force the European Commission to reconsider, but would say, “No. Stop. Stop that proposal. One-third of national Parliaments have great concerns, therefore withdraw it.”

Even within the current treaties, the yellow card system could be made to work better, which brings me to the hon. Gentleman’s intervention. Charles Grant, the director of the Centre for European Reform—a think-tank that is well reputed and thorough on such matters—has suggested creating a national parliamentary forum in Brussels of MPs from different member states. I would be interested to know whether the Minister for Europe has considered that proposal. I regret to hear that European Commissioner Viviane Reding did not turn up to the meeting when the hon. Gentleman was in Dublin. Perhaps a new forum, made up of MPs—not necessarily including Chairs of Scrutiny Committees—meeting in Brussels could better hold to account European Governments, who have permanent representations. As my hon. Friend the Member for Birmingham, Edgbaston suggested, there should be better political oversight of such representations.

Mr Cash: Holding a gathering of MPs to talk about issues is not the same as holding people to account. Holding people to account means that there is a vote, within a constitutional structure that requires people to answer questions, and if the people who have the numbers on their side do not like a proposal, the Government’s position changes, as happened last night. The hon. Lady is suggesting a Parliament of fools.

Emma Reynolds: The hon. Gentleman has not even allowed me to finish my point. If he considers the proposals from the Centre for European Reform, he will see that they are not about a talking shop. With great respect, I know that he sits on COSAC, which my hon. Friend the Member for Birmingham, Edgbaston mentioned, and that committee needs to be vastly improved from its current formulation and in its make-up. Mr Grant says that it does not give MPs a big enough stake, is only consultative and is often treated “disdainfully” by MEPs—his word, not mine.

There is clearly a great—[Interruption.]Would the hon. Member for Stone (Mr Cash) at least give me the courtesy of listening to my response to his intervention? There is clearly a great problem with the current set-up, and having a presence in Brussels of national parliamentarians who could have a vote and scrutinise more closely the decisions taken by our and other Governments deserves closer consideration, rather than just saying that it would be a gathering of fools—a statement with which I profoundly disagree.

I recently met the Speaker of the Dutch House of Representatives, and she has an appetite, as do colleagues in other member states with whom I have discussed the

16 July 2013 : Column 185WH

matter, for Parliaments to work more closely together. The Government could give greater consideration to the successes in the Dutch, Danish and German Parliaments. For example, in the Netherlands, the standing committees—akin, I think, to our Select Committees—choose proposals from within the Commission work programme that they see as priorities and about which they might have concerns, and they refer them to their European affairs committee.

Our departmental Select Committees are not involved enough in proposals at an early stage, or even at later stages, and I would be grateful if the Minister could say something about what the Government could do to drive greater consideration and scrutiny on a policy-by-policy basis, given that, as has been said, a lot of European policy is not foreign policy—as my hon. Friend the Member for Birmingham, Edgbaston said, it is an anomaly that it is often treated as such. Our departmental Select Committees could learn from the experience of the Netherlands.

Ms Gisela Stuart: My hon. Friend reminds me of another idea, which at some stage was discussed. What does she think of the suggestion that, rather than us going to Brussels, the Commissioners come here at the beginning of the work programme? They could give evidence to a Select Committee, or be here in Westminster Hall and answer MPs’ questions about the forward programme.

Emma Reynolds: I welcome that suggestion, and the idea should be considered. European Commissioners do come to our Parliament, but not systematically.

In Denmark, before European Council meetings the Prime Minister has to go before the European committee to discuss her negotiating strategy, and in the German system, the Bundestag now has much greater power to scrutinise the Government’s negotiating strategy for those meetings. Our Prime Minister, when he had just been elected as party leader, told the party to “stop banging on” about Europe, and there are rumours in today’s press that the first report on the balance of competences, which we all await with bated breath, has been put off until after the summer, apparently because Ministers are fearful of their own Back Benchers. I would be interested to hear why a dispassionate, objective assessment of the balance of competences should be put off in that way. The Government again seem to be putting the party interest before the national one. We are worried that they feel compelled to delay the initial report, and we are greatly interested in what the Minister has to say about that.

This debate comes at a particularly important time, because the eurozone member states are likely to pursue further integration among the eurozone 17. Their Parliaments, and those in non-eurozone member states such as ours—there are 10 others, including Croatia—will need to scrutinise better what happens and what the dynamic is between non-eurozone and eurozone member states.

In conclusion, it deserves to be repeated that it is regrettable that the Government have abolished the pre-Council debates. I would like to see them reintroduced. Scrutiny in Committees, such as the one chaired by the hon. Member for Stone, is all well and good but nothing substitutes scrutiny on the Floor of the House. The

16 July 2013 : Column 186WH

Government should learn from the Dutch, Danish and German examples, drive better and closer co-ordination between national Parliaments from across the 28 member states, make the yellow card system work better and consider introducing a red card system.

10.45 am

The Minister for Europe (Mr David Lidington): I congratulate the hon. Member for Birmingham, Edgbaston (Ms Stuart) on securing the debate, and on the presentation of her arguments. I can assure my hon. Friend the Member for Stone (Mr Cash) that I have never had any intention of seeking to appear before his Committee via a video link. I have always much preferred that he and I look each other straight in the eye, person to person.

Mr Cash: It was not a video link—it was a video.

Mr Lidington: Well, that is something best avoided in any meeting with parliamentarians, if humanly possibly.

I will try to respond to the various points that were made, in particular by the hon. Lady. She posed a number of questions and challenges, some of which focused on how we do European business here in Westminster, and others that centred on what might be done in the broader European Union context, and how national Parliaments should fit into the legislative process and decisions taken at European level.

I shall start with the hon. Lady’s points about how we deal with European business here at Westminster. Her most important point was that it was vital to find a way to engage and involve a rather larger number of Members in European business. I have to confess that when I go in to the Chamber for a debate on Europe, or in to a Committee, I feel at times like a cut-price version of Henry V before Agincourt. It is a matter of:

“We few, we happy few”

that are gathered together, and it is very familiar faces, from both sides of the House, that tend to feature. It is, however, not a Government matter, but a problem for Parliament. Parliament must take more seriously its collective responsibility as an institution to see, rightly or wrongly—individual hon. Members will have their own views on this—that we live in a world in which European Union business should be treated as mainstream political business, and not as something that can be quietly shoved off to some annexe next door and left to specialists to get on with in peace and quiet. The decisions that British Ministers of any party take in the Council of Ministers have an impact on the lives of the constituents of every Member of this House and I agree, therefore, with the thrust of what the hon. Lady said.

I disagree with the hon. Lady, however, in that I feel that the focus should not be just on the Chamber. The Chamber is clearly important, but we need to consider the role of Committees, including departmental Select Committees. In various evidence sessions with the European Scrutiny Committee over the past couple of years, I have tried to emphasise my growing belief that part of the answer lies in persuading the departmental Select Committees to give greater priority to that aspect of their work that covers European Union business. That is a matter for Select Committees, and it would be wrong for the Government to get into the business of

16 July 2013 : Column 187WH

seeking to give them instructions—the powers are already there within the terms of resolutions. It is primarily for those Committees to take ownership of those agendas and drive them forward. They can by all means invite European Commissioners to give evidence and by all means go to Brussels every now and then to take evidence and meet informally with people in the European institutions who are involved in legislation.

I look forward to the forthcoming report from the European Scrutiny Committee on the scrutiny process. I am sure that many of the matters that have been touched on this morning, such as whether we should move towards a mandate model of scrutiny along the lines of what the Scandinavian countries have, will be addressed in that report, and I obviously do not want to pre-empt the Government’s response to it. I say to the hon. Member for Wolverhampton North East (Emma Reynolds) that one of the characteristics of that mandate system—she rightly drew attention to some of its virtues—is that the sessions between the Minister and the committee to discuss a negotiating mandate take place in closed session. The public and press are not admitted and the report is not public, at least until after the negotiations are concluded.

Ms Gisela Stuart: Each of these systems has advantages and disadvantages, but could the Minister address where he would assume the collective memory of Parliament on these debates resides? The decision-making process in Brussels is so long, even with one term. Where would he focus that collective memory?

Mr Lidington: That is a very good point. To my mind, it means that one needs to focus the collective memory of elected Members through the members of the Liaison Committee, which is composed of relatively senior Members of Parliament, and through the system of the Committee Clerks. If we look at our Parliament’s representation in Brussels, we have some very talented people representing the two Houses, but that amounts to three staff. The Bundestag and the Bundesrat have 18 or 19 people between them, and that is on top of the German federal representation and the representative offices from each of the German Länder that are present in Brussels. Again, Parliament should consider the question of whether our level of representation and the number of people we have on the ground in Brussels are sufficient, but the Government cannot, or should not, issue instructions on that.

The hon. Lady asked whether COSAC could be improved, and my answer is definitely yes. It is an imperfect organisation, and it could be strengthened through reforms to the secretariat or through a formal power to summon commissioners, rather than expecting commissioners by convention to come and give evidence. It is not just about the formal meetings of COSAC, because if any system of red or yellow cards is to be effective, there has to be a culture of talking and working together that means that different parliamentary representatives, and in particular the chairs of the relevant committees, are used to having contact with each other in networking and co-ordinating an approach to a particular Commission draft measure.

16 July 2013 : Column 188WH

The hon. Lady asked about the role of the Europe Minister, and she was very fair in how she put it. There is a perfectly legitimate debate to be had in this country about where that office sits. Some argue that it should sit in the Foreign Office. Others argue that it should sit in the Cabinet Office and so be directly accountable to the Prime Minister. Some argue that it should be a self-standing Department or be located in Brussels, in effect performing the political office of the permanent representative. In France, Germany, Poland and Spain my counterparts sit in their respective Foreign Ministries. In Sweden, however, the Europe Minister sits in the Prime Minister’s office and reports directly to the Prime Minister, although she represents a different political party from the Prime Minister in the current coalition.

The key thing is not where the Europe Minister sits, but how the right level of co-ordination and accountability is achieved across Government. The Europe Minister could be put in the Cabinet Office, but that raises the question of how the work at Brussels, which is certainly cross-departmental in Whitehall terms, is co-ordinated with the bilateral diplomatic work that has to be done with 27 other member states, because European business cannot be done in Brussels alone. I would be worried about a gap opening between a Minister dealing with Brussels business and a Minister dealing with our diplomatic efforts on, for example, Germany. We try to co-ordinate our conversations with German Ministers across all relevant political dossiers. When I see German counterparts, I do not talk strictly about Foreign Office business; I talk about financial services, the European budget and whichever European issues are high on the agenda at that moment.

The key is to have effective co-ordination through a Cabinet system, which we do through the European Affairs Committee of the Cabinet. I repeat the point I have made elsewhere: the permanent representative, who is a professional civil servant, follows the mandate set by the Cabinet. If he wishes to move from the mandate he has already been granted, he has to go back to Ministers and seek their agreement and authority to go beyond it.

On the question of yellow and red cards, under the current system national Parliaments or chambers of national Parliaments can submit a reasoned opinion that a draft directive or regulation fails to comply with the principle of subsidiarity. They have to submit that within eight weeks of the formal communication from the Commission about a draft measure. One third of the voting weight of national Parliaments needs to be signed up for the Commission to be compelled to carry out a formal review, and the reasoned opinion may only be submitted on the grounds of subsidiarity. We could make more use of reasoned opinions than we do. I know that my hon. Friend the Member for Stone is meticulous in looking at the legal grounds of a directive and whether it meets the subsidiarity test.

The Westminster Parliament has so far submitted fewer reasoned opinions than some Parliaments in other member states, but we could look to reform the system. Is eight weeks long enough? Should we not give national Parliaments longer to consider their response? There is an obvious problem with recesses. Should we reduce the threshold below a third? Should we widen the grounds for challenge? If we have subsidiarity, why not have proportionality as well? Why not have some sort of test

16 July 2013 : Column 189WH

on excessive burdens on business, or on whether there is evidence that a draft measure would have a harmful impact on European growth? Why not make provision for the yellow card to become a red card under certain circumstances, with an outright veto that national Parliaments could impose? Could we give national Parliaments the power to impose an emergency brake in certain circumstances?

Mr Cash: Will the Minister give way?

Mr Lidington: If my hon. Friend will forgive me, I have very little time left. Could we give national Parliaments an emergency brake to throw an issue to consideration by the European Council? Should we provide powers for a yellow or red card retrospectively, so that national Parliaments could, as a group, insist that the institutions consider repealing or amending a directive that was part of the acquis? Should we give national Parliaments the power to bring forward an own-initiative report? In the hands of the European Parliament, that instrument has been significant in helping to shape policy development.

I liked the idea from the hon. Member for Birmingham, Edgbaston of some act of oblivion at the end of a Commission’s term. Under that idea, a measure that had not completed all stages would be deemed automatically to fall and would be reconsidered in the next Commission and the next European Parliament.

Ideas about a conference of national parliamentarians or a second chamber for the European Parliament are part of the discussion, although there are some serious practical issues to be considered. How would such an institution fit into the legislative process? How could it be made to work in practice, given the other parliamentary and constituency duties that Members of this House have to carry out?

I am conscious of the fact that giving a stronger voice to national Parliaments is only one aspect, though a significant one, of the reform that is necessary to make the European Union more accountable and more democratic than it is currently. It is in all our interests that a way is found to overcome the profound public disaffection that we see throughout the continent on European decisions. There is no European demos, and strengthening the voice of national Parliaments is the right way forward to restore greater democratic accountability to the EU.

16 July 2013 : Column 190WH

Bill of Rights (Northern Ireland)

11 am

Naomi Long (Belfast East) (Alliance): I am pleased, Mr Chope, to have secured this short debate today to raise with the Secretary of State the issue of the Bill of Rights for Northern Ireland. It is a busy day in Parliament from a Northern Ireland perspective—the Committee on the Northern Ireland (Miscellaneous Provisions) Bill is meeting and the Secretary of State is due to make a statement in the House on the appalling and disgraceful scenes of rioting and serious disturbance that have affected many parts of Belfast, including my own constituency of Belfast East, in the past few days. I am pleased that the Secretary of State has been able to attend the debate, and that the shadow Secretary of State, the hon. Member for Gedling (Vernon Coaker), has been able to join us for at least part of the discussion. I do not intend to detain the Secretary of State for too long on this issue.

The Bill of Rights is an important matter and the timing of this debate is appropriate. We stand here 15 years on from the Good Friday agreement which, notwithstanding the continued instability that we have witnessed over recent weeks and months, has laid the foundations for the significant transformation that has been delivered in Northern Ireland.

No agreement is perfect, and that includes the Good Friday agreement. I do not believe that every dot and comma of it must be protected for all time against change and evolution of Northern Ireland politics and society. However, its principles are hugely important and provide an agreed foundation on which we can build for the future. Indeed, my own party has argued for significant changes to the Strand 1 structures that govern the operations of the Assembly. Those changes would create a more normalised form of governance with a properly funded and resourced Opposition to hold the Executive to account, and with weighted majority voting replacing the current petition of concern arrangements, which are increasingly being misused. Such reforms are within the spirit of the agreement and are not a challenge to its key principles.

However, the Good Friday agreement was a carefully balanced package of measures that were endorsed by referendums in both Northern Ireland and the Republic of Ireland, so it is important that all parts of it are implemented. It is therefore of concern that so little tangible progress has been made over the past 15 years on the matter of the commitment within the agreement to develop a Bill of Rights for Northern Ireland, which would address the specific circumstances of Northern Ireland after 20 years of the troubles.

In response to previous written and oral questions on the Bill of Rights, the Minister of State has indicated that this is a matter on which Northern Ireland parties must first reach consensus before the Government will act to legislate. Although I acknowledge that consensus is important and that it is currently absent, I do not believe that that is grounds for inaction on the Government’s part. It is the duty of Government as a co-guarantor of the agreement and as a signatory to it to engage proactively with all stakeholders, including political parties, to seek

16 July 2013 : Column 191WH

consensus on this and other outstanding issues. There is a particular responsibility around leadership on such issues when they are reserved matters.

Although the primary purpose of seeking this debate is to discuss not the content of any Bill of Rights, but the process by which the Bill can be advanced, it is important to put on record my own party’s broad views on the Bill of Rights. Alliance recognises that human rights are inherent and universal. There is scope for different jurisdictions to recognise different rights in domestic law, provided of course that no inappropriate inequalities are created in doing so. Rights and a framework for the delivery and protection of rights are important to protect individuals and minorities against the state and against others. However, any dialogue around rights cannot be separated from responsibilities. Those claiming rights cannot do so without some consideration for the maintenance of the framework of a democratic society based on the rule of law that provides for the exercise of rights. That is particularly important to emphasise in the context of the past few days when tensions between competing rights have spilled over into lawlessness in a way that is both destructive and reckless.

In broad terms, Alliance believes that any Northern Ireland Bill of Rights must be realistic and capable of being enforced through our own courts, consistent with European and international standards, and flexible enough to take account of changing circumstances in an evolving Northern Ireland. Furthermore, it must avoid entrenching any particular view of identity, such as the notion of two separate communities in Northern Ireland, which could reinforce sectarian divisions. Equally, it should avoid giving group rights precedence over the rights of the individual in a manner that would do likewise.

My reason for raising the issue at this time is in part also linked to the progress being made by the Northern Ireland (Miscellaneous Provisions) Bill. The previous Secretary of State, the right hon. Member for North Shropshire (Mr Paterson) wrote to all party leaders about the Bill on 5 September 2011, seeking views on a number of measures that he hoped to include within the Bill. In the seventh paragraph of his letter, he raised the issue of the Northern Ireland Bill of Rights in which he offered two options for taking the matter forward. He said:

“There remains disagreement about possible further rights protections in Northern Ireland. I have agreed with the Lord Chancellor that any specific supplementary rights for Northern Ireland should be implemented in a separate section of any legislation that would give effect to a UK Bill of Rights. However, our forthcoming Bill may provide opportunities to handle this issue differently by, for example, giving the Assembly power to take forward work, or even legislate, in this area.”

At that time, the Alliance party view would have been that a UK-wide Bill of Rights could have provided a suitable vehicle for progressing the Northern Ireland Bill. Although Northern Ireland is a distinct society in many respects, it does not and should not exist in a self-contained bubble. It is part of a wider UK, all-Ireland and European and international context. In a globalised and interdependent world, individuals are interacting much more across frontiers, and human rights protections must recognise and respond to those challenges.

16 July 2013 : Column 192WH

It was originally envisaged that any Northern Ireland Bill of Rights would be created in the context of a common platform across the UK provided by the European convention on human rights, but no wider UK Bill of Rights. However, Alliance recognised at that point that any process to formulate a Bill of Rights for Northern Ireland would have to relate to any potential UK Bill of Rights. That could still have entailed a separate chapter for the Northern Ireland Bill of Rights or a chapter within a larger document, provided that the subtleties of the situation in Northern Ireland were respected. However, it would be fair to say that the UK Bill of Rights has been kicked into some very long grass at this point and that we are unlikely to see it delivered in the medium term.

It is also the case that the opportunity to legislate for the Bill of Rights as part of the Northern Ireland (Miscellaneous Provisions) Bill has also all but expired as the Bill is now making speedy progress through the House of Commons and the Bill of Rights issue was not included within it or within the consultation that preceded it. Will the Secretary of State say how she intends to make progress with respect to the Bill of Rights in the absence of either of the identified options to do so?

Jim Shannon (Strangford) (DUP): I thank the hon. Lady for making such a valuable contribution to Westminster Hall. She will be aware that the recommendations contained in the Bill of Rights forum and those made by the Northern Ireland Human Rights Commission seem to suggest that abortion will be more freely available, and that there is a need to increase the age of criminal responsibility. The hon. Lady will know that the Democratic Unionist party, of which I am a member, the Ulster Unionists, the Orange Order and the Roman Catholic Church have objections to almost all of, or parts of, the recommendations put forward. How does she see the Bill of Rights going forward when so many people are against it? Does she not feel that we can go forward only when there is a consensus to agree with it across the whole of the community?

Naomi Long: I thank the hon. Gentleman for his point. He reinforces what I said earlier about there being no consensus on the issue. However, I want to address some of what he said. There are two narratives around the Bill of Rights. One is an expansive Bill of Rights, which includes a lot of detail, such as socio-economic rights to which he refers, and there are others who believe that that is not the role of the Bill of Rights. They believe that it should enshrine broader principles around which the country should protect people’s rights as individuals. I would tend towards that more broad definition rather than the more detailed definition that would include socio-economic rights. Abortion, the age of consent and various other issues are best dealt with through the normal democratic and legislative process and not through a Bill of Rights. That is my view and the view of my party. However, a Bill of Rights approach can inform how the debate on those issues takes place, but it is not the job of the Bill of Rights to supersede the work that Parliament or the Northern Ireland Assembly do when legislating on matters of socio-economic importance. That is part of the democratic imperative that must be maintained regardless of whether or not there is a Bill of Rights.

16 July 2013 : Column 193WH

The hon. Gentleman is correct to say that the Bill of Rights has caused controversy. The forum for the Bill of Rights sat from December 2006 until March 2008 and produced what is probably one of the most non-consensual reports that has ever been produced in Northern Ireland, which in itself is quite an achievement. In addition, the Human Rights Commission’s advice to the Secretary of State, which was delivered back in 2008, also drew fierce opposition from some quarters. Clearly, there is still much work to be done. I am not suggesting that we are at a point where a Bill of Rights is ready to be drafted and put to Members for agreement. However, the fact that there is work to be done should be an impetus to doing that work.

In conclusion, as with many other difficult issues, consensus is currently absent, whether it be on parades, on flags and emblems, on building a shared future, or on dealing with the past and its legacy. The Executive have convened talks, which will happen during the summer and in the autumn, to address those issues and to seek sufficient consensus to make progress on all of them, in an attempt to give renewed energy to the discussions and to end the inertia that has characterised the process of late. I believe that is welcome. I also believe that Dr Richard Haass agreeing to chair those talks impartially will add its own momentum to them. However, it is very clear from research conducted by the Northern Ireland Human Rights Consortium that a significant majority of people in Northern Ireland favour a Bill of Rights for Northern Ireland being implemented in line with the provisions in the Good Friday agreement, and that that includes a significant majority of ordinary members of each political party in Northern Ireland, including the hon. Gentleman’s own party, within which I think the support for a Bill of Rights among ordinary members ran to about 80%.

Notwithstanding the political and ideological impediments to reaching sufficient consensus, I hope that today the Secretary of State will at least commit to a process that would help to breathe fresh life into this issue and make good on a promise made 15 years ago, which is still important to so many people in Northern Ireland today.

11.11 am

The Secretary of State for Northern Ireland (Mrs Theresa Villiers): Perhaps I ought to explain that I am standing in today for my hon. Friend the Minister of State, Northern Ireland Office, because he is busy with the Northern Ireland (Miscellaneous Provisions) Bill Committee. It is a great pleasure to respond to this debate, and I congratulate the hon. Member for Belfast East (Naomi Long) on securing it. As she says, a Bill of Rights for Northern Ireland is an important issue for consideration. It was good to see the hon. Member for Gedling (Vernon Coaker), the shadow Secretary of State for Northern Ireland, with us for a short period, and it is good to see the hon. Member for Strangford (Jim Shannon), whose contribution to the debate was very welcome.

Hon. Members will appreciate the thoughtful and measured way that the hon. Member for Belfast East has approached this subject, which has provoked strong feelings on different sides of the argument. Of course, we in the Conservative party are no strangers to controversies and divided views on human rights matters.

16 July 2013 : Column 194WH

Perhaps it would help if I went back over some of the ground covered by the hon. Lady and went back to the section of the Belfast agreement that deals with rights. There is a degree of ambiguity in the way that section is written. Although the text does not go as far as stating that there would definitely be a Bill of Rights, the agreement certainly contemplated that a Bill of Rights was potentially an important part of the settlement. The Belfast agreement said that the Human Rights Commission

“will be invited to consult and to advise on the scope of defining, in Westminster legislation, supplementary to those in the European Convention on Human Rights, to reflect the particular circumstances of Northern Ireland”.

The agreement added:

“These additional rights to reflect the principles of mutual respect for the identity and ethos of both communities and parity of esteem, and...taken together with the ECHR ...to constitute a Bill of Rights for Northern Ireland”.

Of course, the arguments for and against a Bill of Rights have been debated extensively in the 15 years since the Belfast agreement was signed. I will just give a few examples: there was the Bill of Rights forum that followed the 2006 St Andrews agreement; and there was also the advice offered to the previous Government by the Human Rights Commission in 2008. Among other things, that advice proposed extensive so-called socio-economic rights, including

“the right to an adequate standard of living...the right to work, including fair wages”

and it even included

“the right to have the environment protected”.

Following that, there was the ensuing Government consultation, and the current Government published responses to that consultation in December 2010. The then Minister of State for Northern Ireland—the Minister of State, Foreign and Commonwealth Office, my right hon. Friend the Member for East Devon (Mr Swire)— described the consultation as having demonstrated widespread

“opposition to a wide-ranging Bill of Rights and support instead for a more limited set of rights... This divergence of views was also reflected in the submissions made by political parties in Northern Ireland”.—[Official Report, 16 December 2010; Vol. 520, c. 131WS.]

In fact, as the hon. Member for Belfast East said, there are few issues in Northern Ireland that have caused such divided views or that have been so thoroughly examined and debated as the subject of our debate today.

Despite that, however, 15 years on from the Belfast agreement, it is clear that there is no consensus on how to move forward, and I am afraid that there is no sign of one emerging in the immediate future. That was the case under the previous Labour Government, and I am afraid that it has remained the case under the current Government.

My predecessor as Secretary of State for Northern Ireland—the Secretary of State for Environment, Food and Rural Affairs, my right hon. Friend the Member for North Shropshire (Mr Paterson)—had numerous discussions on this matter with political parties in Northern Ireland and with other interested bodies. As we have heard, in September 2011, he wrote to party leaders in Northern Ireland, setting out the possibility that the proposed Northern Ireland Bill, which is being discussed upstairs as we speak today, would give the Assembly

16 July 2013 : Column 195WH

“the power to take forward, or even legislate, in this area”.

I am told that he received no responses from the political parties to that part of his letter.

Since last September, when my hon. Friend the Minister of State and I arrived at the Northern Ireland Office, we have discussed a Bill of Rights with a number of organisations and people, including the Irish Government and the Tanaiste. Like our predecessors, we have found little—if any—common ground among them, but that has not been for lack of trying. We have certainly engaged extensively on this matter.

Of course, a Bill of Rights for Northern Ireland would be a matter of constitutional significance. As such, it would be very important to secure cross-community support if it were to have any chance of succeeding. It is not something that could, or should, be imposed over the heads of the people of Northern Ireland by the UK Government acting unilaterally. That position is reinforced by the fact that the main impact of any Bill of Rights unique to Northern Ireland would fall on the devolved institutions. So, before we could make a move towards a Bill of Rights for Northern Ireland, there would have to be broadly based cross-party agreement. The Government would like to see this issue resolved, given the role that the Government played in the Belfast agreement, but we cannot simply conjure consensus into existence.

I should add that the chances of achieving broad agreement on additional rights for Northern Ireland might be better served if some of the advocates of a Bill of Rights were more realistic in their ambitions. Clearly, proposals from some organisations that focus extensively on socio-economic rights are very unlikely to gain cross-party approval in Northern Ireland. However, if that was the route that Northern Ireland wished to go down, the impact on the rest of the UK would also be a factor to consider. For example, there would be complex issues to resolve around the interaction of welfare-type human rights with the principles of parity that currently operate in relation to the benefit and welfare systems. Matters of cost would need to be carefully considered.

As the hon. Member for Belfast East said, this debate is primarily about the means, or process, to deliver a Bill of Rights for Northern Ireland, rather than the content of such a Bill. However, I welcomed her thoughts on the Alliance views on these matters. As she said, it certainly makes sense to focus on a realistic and flexible approach to any future Bill of Rights, which is capable of adapting to Northern Ireland’s changing circumstances. She is right to say that we should proceed with caution against anything that entrenched a particular and restrictive view in relation to identity and against anything that made it more difficult to resolve the sectarian divisions that sadly persist in Northern Ireland society. So I listened with interest to her thoughts on those matters.

Having looked back at some of the statements that the Alliance party has contributed to the debate, I note that there is acknowledgement that significant hurdles are still to be cleared in arguing why Northern Ireland needs to have a fundamentally different human rights regime—especially from other neighbouring jurisdictions. I also acknowledge that party’s statement that the aim of policy makers should not be to preserve Northern

16 July 2013 : Column 196WH

Ireland as a place apart, requiring special measures. Those sentiments would be worth considering in terms of a way forward on a Bill of Rights.

The intervention by the hon. Member for Strangford (Jim Shannon) highlighted some of the difficulties here. For example, were abortion to become tied up in the concept of a Bill of Rights, that would be an intensely difficult issue to resolve using a Bill of Rights as a mechanism. That illustrates the difficulties in the way of reaching a conclusion on this matter.

Although there are reasons why further progress on a Bill of Rights will not be easy to deliver, I hope that I can provide some reassurance regarding the protection of human rights in Northern Ireland. It is important to emphasise that Northern Ireland has an extensive, well-developed system of human rights protections, through existing UK-wide legislation—not just the legislation that happens to be labelled directly in relation to human rights, but statutes dealing with matters such as discrimination. For example, fair employment legislation places obligations on employers that are unique in the United Kingdom. In particular, section 75 of the Northern Ireland Act 1998 imposes a statutory obligation on all public bodies to carry out their functions with regard to the need to promote equality of opportunity for everyone. Of course, the Police Service of Northern Ireland has emphasised that it puts respect for human rights at the heart of all its work. That is an important part of policing practice in Northern Ireland. So I hope that no one will seek to say that, without a new Bill of Rights, Northern Ireland is somehow left as a human rights desert. That is certainly not the case.

Looking ahead, if there were agreement on additional rights for Northern Ireland, the Government would examine how best to take things forward. We remain open to the suggestion that work on this, including legislation, could be taken forward by the Assembly. In our 2010 manifesto, we called for the replacement of the Human Rights Act 1998 with a UK Bill of Rights. Although that proposal did not make it into the coalition agreement, were it to be revived in future, the relevant legislation could include a separate section to cover supplementary rights in Northern Ireland, as mentioned by the hon. Member for Belfast East.

In the meantime, both the Home Secretary and the Lord Chancellor have said clearly that, if the Conservatives win the next election, we will seek radical reform of current human rights law. That would include re-examining our relationship with the European Court of Human Rights. However, in considering the future of human rights legislation in the UK we would, of course, give careful consideration to Northern Ireland’s position. We are happy to include debates and ideas on a Bill of Rights for Northern Ireland as part of our general consideration of the future of human rights rules in the UK as a whole.

Jim Shannon: Just for the record, as I mentioned in my intervention on the hon. Member for Belfast East (Naomi Long), consensus is far from being reached in Northern Ireland. The largest Unionist political parties and other sections of the community are opposed, in part or in whole, including the Roman Catholic Church. Will the Minister confirm that nothing will go forward without the overall agreement of the largest

16 July 2013 : Column 197WH

Unionist parties—the largest section of people—and one of the largest Churches and religious groups in Northern Ireland?

Mrs Villiers: I can give the hon. Gentleman reassurance of that nature. As I have said, it would be virtually impossible to adopt a Bill of Rights for Northern Ireland without extensive cross-party support. If it were not possible to persuade the major political parties of the merits of the Bill of Rights, I do not see how it would be possible to deliver one.

In conclusion, this has been a worthwhile debate. I noted the reference made by the hon. Member for Belfast East to the Richard Haass working group, which starts its work soon on parades and flags and the past. Naturally, if it wishes to look at Bill of Rights matters, we will consider what conclusions it reaches. The Government will continue to examine seriously any other proposals to resolve the issue. Yet this issue should not deflect us from other important objectives for Northern Ireland that we are focused on, particularly in light of the weekend’s events.

We have to continue our efforts to rebalance the economy and help Northern Ireland compete in the global race for investment and jobs. We need to press ahead with the implementation of the economic package agreed at Downing street last month, between the Prime Minister, myself and the Deputy First Minister. And we must continue working with the Executive to tackle sectarianism and build a genuinely shared future for everyone in Northern Ireland.

The riots that we have seen on the streets of Belfast and other places in Northern Ireland over recent days are disgraceful. It is important that we start to address the underlying social divisions that can contribute to tensions around issues such as parading in Northern Ireland. I look forward to addressing the House on that matter in about an hour’s time.

11.25 am

Sitting suspended.

16 July 2013 : Column 198WH

Shale Gas (Lancashire)

[Mr Joe Benton in the Chair]

2.30 pm

Mark Menzies (Fylde) (Con): It is a great pleasure to be given the opportunity to introduce this Adjournment debate on community interests in shale gas in Lancashire, and it is a great pleasure to do so under your chairmanship, Mr Benton.

It is important for Parliament to hold regular debates on shale gas, because there is considerable potential for it to impact on the constituencies of many right hon. and hon. Members. The title of my debate in the Order Paper suggests that I would like to focus exclusively on the financial benefits that shale gas could bring to communities in Lancashire following the recent announcement of a community benefits package by the Treasury and the Department of Energy and Climate Change. As we are still in the early stages of shale gas development, however, I firmly believe that further work is still to be done on a range of other related issues, most notably on regulation, community engagement, the development of a UK supply chain and the suitability of potential sites.

I have consistently campaigned on the regulation of the shale gas industry. In my Adjournment debate in October 2012, I addressed the need for a body to be formed to oversee the workings of the regulatory bodies on matters relating to onshore oil and gas development, because it is imperative that shale gas development takes place only if we have robust regulations in place. I pay tribute to the previous Minister with responsibility for energy, my right hon. Friend the Member for South Holland and The Deepings (Mr Hayes), for responding to those and other issues that I raised in my Adjournment debate and for establishing the Office of Unconventional Gas and Oil.

The Office of Unconventional Gas and Oil must take on responsibility for ensuring that the existing regulatory bodies, namely the Health and Safety Executive, the Environment Agency, DECC and Lancashire county council as the planning and mineral rights authority in Lancashire, work together to deliver a world-leading, gold-standard regulatory framework. It is the responsibility of the office not to become a regulator but to ensure that those that are empowered to be regulators are doing so to an exemplary standard.

I also urge the Minister to ensure that regulations are robust and are developed to ensure the highest environmental safeguards, as opposed to what is simply convenient for the industry. The focus should be on robust regulations and we should try to get away from using words such as “streamlining.” When people hear about streamlining, they interpret it as the watering down of regulations, which I am sure is not the case. Were it the case, it would not be acceptable to me.

I welcome the decision to make environmental impact studies compulsory for shale gas development sites, regardless of size, which is an evolution from where we were two years ago. Regulation is not what is written on a piece of paper; it is about what is enforced. I therefore urge the Government to ensure that we have regular, on-the-ground visits by regulators and inspectors, some

16 July 2013 : Column 199WH

of which must be unannounced so that shale gas development sites have the authority of operating to the highest environmental standards and no one is beyond reproach. In order to achieve that, it is important that regulators are provided with sufficient resources to fulfil their role.

We must be able to anticipate future developments as the industry progresses, if shale gas development does take place. We must be fleet of foot to ensure technical changes as the industry evolves and that the regulators and regulations are fit for purpose. For example, it would be inconceivable for regulations on shale gas developments in Lancashire to be entirely enforced by the HSE from Aberdeen. The HSE is based in Aberdeen for various obvious reasons, and therefore if and when the shale gas industry develops in the north of England, it is important that it responds accordingly, with regulators based in a much more localised area. Consideration must therefore be given to the creation of a regulatory hub to monitor the development of shale gas at a local level so that anyone who puts in a freedom of information request or writes to the Minister to discover what he is doing can have confidence that this is being taken seriously and things are being done diligently.

In my first Adjournment debate, I stated my strong opposition to the suitability of the Anna’s road site for potential shale gas extraction. My position remains unchanged, and I welcome the announcement from Cuadrilla that it has put on hold any potential development of the site. Decisions will be taken not by Members of Parliament but by elected county councillors, and therefore I do not plan to say any more on that in this debate.

Finally, I urge the Minister to ensure that there is rigorous monitoring of the traffic light system that was put in place following the seismic tremors in Lancashire in 2011, because it is important that public confidence is absolutely maintained in the system. Much work was done to ensure that the traffic light system was put in place prior to the resumption of fracking, that it is indeed fit for purpose and that we constantly monitor and review it to ensure that it does the job for which it is intended so that we see no repetition of the seismic tremors that we experienced in Blackpool.

Public engagement in any controversial sector is critical, but in something as new and controversial as shale gas it is absolutely paramount. I therefore want to see engagement with the local community at the forefront of what is done by the Office of Unconventional Gas and Oil, the regulators and the industry itself. Although the industry has done some work to address that, it is an area that needs substantially more work as the industry evolves and potentially develops.

When the Office of Unconventional Gas and Oil was established earlier this year, one of its main roles was to support public engagement and to help people to understand the facts about unconventional gas and oil production and what that could mean if it takes place in their area. With such a central role to play in the future of shale gas development, it is important that the office has the necessary resources to help drive public engagement.

Paul Maynard (Blackpool North and Cleveleys) (Con): I am sorry that I cannot be here for the whole debate, but I have to go to a meeting on the Keogh review rather

16 July 2013 : Column 200WH

urgently. Does my hon. Friend agree that the community engagement fund that is being created for the benefit of local communities has to be transparent in its governance and cannot just be dominated by local government interests? Has he considered what types of community organisations could be brought in to ensure that the fund is truly reflective of the local communities that are meant to be benefiting?

Mark Menzies: My hon. Friend is a champion of transparency like no other, and he pursues transparency in other areas of his work. I know that he has now turned his attention to ensuring that shale gas is also transparent. I will touch on some of those issues later in my speech, and I know that other hon. Friends will do so, too.

It is inconceivable that the Office of Unconventional Gas and Oil has a single page on the Government energy and climate change website. I might be wrong, and I stand to be corrected, but this is an opportunity for the Minister and the Department to create an interactive online portal where my constituents and my hon. Friend’s constituents can go to seek information, a myth buster that is scientific, evidence-based and impartial.

I get many questions from constituents, which are often highly technical and which I simply cannot answer. I am a Member of Parliament not a geologist, and I have no background in the oil industry, so I need somewhere I can go to get those questions answered. I pay tribute to the people at DECC who for three years have been studiously answering letters, often through Ministers including the current Minister, but a community interactive portal where people can post questions and in the fullness of time—they will not get instant responses; it may be days, weeks or potentially longer—get impartial, independent and science-based replies would help to take away some of the fear, the unknown and the uncertainty that shale gas currently has for many people. Information and transparency are key.

I thank Duarte Figueira, the recently appointed head of the Office of Unconventional Gas and Oil, for taking the time to discuss with me in more detail many issues relating to shale gas development. He has always found the time and always been courteous. I encourage that sort of attitude and ethos within the office, so that no one can be in any doubt about its willingness to engage and answer questions.

Community involvement is not just a role for the Office of Unconventional Gas and Oil; ultimately, companies must take responsibility for it. I urge them to ensure that they are sufficiently resourced and have the right people in place to deliver quality, effective and impartial community engagement, to tell people what they are doing and when and to take people with them. Ultimately, that is a challenge not for Government but for developers, but I want the Government to oversee it and ensure that they do so effectively.

George Eustice (Camborne and Redruth) (Con): My hon. Friend is absolutely right that we must carry communities with us on projects such as this. It cannot be done to communities; it must be done with them. The experience with wind energy, for instance, has not been good when we have left it to the industry to carry communities with them. All too often, the industry

16 July 2013 : Column 201WH

expects Government to pass unpopular laws that second-guess the planning system. Does he agree that we need to consider ways to share the economic benefits directly with local communities, for instance through reductions in their electricity bills or rebates in their council tax?

Mark Menzies: My hon. Friend is absolutely correct that what is important is not that the local council, the Treasury or the companies benefit; they would all benefit from the development of shale gas. Ultimately, it is vital that ordinary people in areas hosting sites see meaningful, tangible, long-lasting and substantial benefits. I will touch on that, and I know that the Government have made an announcement on the subject.

Moving on to the development of the UK supply chain in shale gas, some people criticise the Minister for wearing two hats: energy and business. That criticism is short-sighted. Having experience in both makes him absolutely the right person to ensure that we take the right decisions in developing the infrastructure and supply chain across the whole energy sector, and particularly within shale gas.

There has been much speculation in the press about the number of jobs that could be created by shale gas. If shale gas is developed in Lancashire, it is imperative that local people get maximum employment opportunities. From speaking to those in the industry, I understand that a significant number of jobs in shale gas come not from drilling for gas but from developing the manufacturing supply chain and supporting industries.

I urge the Minister to seek close Government working with the industry to ensure the development of a UK—indeed, a Lancashire—supply chain. It would not be acceptable for the equipment to be manufactured overseas when we have UK businesses with a strong engineering heritage and a highly skilled work force in Lancashire. This is a great opportunity to use those skills to develop a manufacturing base in the region to supply equipment for the shale gas industry. In the long term, an offshore shale gas industry could ultimately develop, and that could drive a considerable amount of highly skilled, well-paid, leading technical jobs. It is important that the north of England does not miss the opportunity or shirk the challenge.

I also urge the Minister to ensure that local enterprise partnerships, the Department for Business, Innovation and Skills and the gas companies undertake a scheme to co-ordinate with local colleges and schools to ensure that apprenticeships are offered to those keen to enter the industry and retrain where applicable. People are key, and it is vital that local people get the benefits and do not miss out.

My hon. Friends who have intervened have mentioned community benefits. On the financial community benefits from shale gas, I broadly welcome the overall shape of the proposed package. It is absolutely right that communities that host shale gas pads should also be the primary beneficiaries. I know that the Government and the Minister have put in a lot of work on that issue. I thank the Minister for his work. It is not an easy task.

I also want to make it perfectly clear that the £100,000 paid must be per well fracked and not per shale gas pad. I have read some ambiguity from commentators in the press, although I never believe everything that I read in the press. It is therefore important for the Minister to

16 July 2013 : Column 202WH

give some clarity that it is £100,000 per well and not per well pad site. As he is aware, a pad can contain up to 20 wells, so it is therefore imperative that we have clarity in order to avoid confusion in future.

I welcome the principle that communities benefit from a percentage of revenue generated. At the moment, 1% is proposed; I know that some of my hon. Friends wish to speak about that. If it remains at 1%, the money must be highly localised. If, however, a desire to spread the money over a wider area becomes the prevailing mood, we have no option but to seek a higher percentage level, as I am not prepared for the benefit to my communities hosting shale gas pads to be diluted. That is the decision that we must take.

It is right that a significant proportion of revenues—I believe the figure proposed is one third—should go to the county council, as the mineral rights authority. However, I would like the rest of the money to be placed into a community endowment fund to ensure that the communities that host shale gas sites benefit for generations to come. I know that the Minister is driving much work on the issue, and I look forward to seeing the final results. I like the thought of a National Trust-style model, where the money is awarded to causes that benefit the community in the long term. Those could even include major infrastructure projects. However, it is also important that individual people benefit. Options including direct cash payments or money in the form of energy bills must also be explored. My constituents who host such sites, and my hon. Friends’ constituents who will host them in time, must be their prime beneficiaries.

John Pugh (Southport) (LD): Does the hon. Gentleman share my view that it is a slight problem that we do not actually know how profitable the shale gas industry will become? If we set the deal too early, we may lose some of the benefits that could accrue to us.

Mark Menzies: If my hon. Friend were sitting closer to me, I would think that he had read my notes, but as he is an honourable gentleman and far enough away, I know that he has not. He is absolutely right. We are in the early days—indeed, the infancy—of the industry. If it goes ahead, we still have questions and uncertainties to get through. It would be wrong to set too firm a percentage level at this stage, but we also need clarity that when a company says that it will pay 1%, or whatever percentage it turns out to be, it cannot renege or change its mind when the ink is barely dry. With the best will in the world, companies change chief executive. They can be taken over. Governments also change. The intentions being set out honourably at this moment in time could change in future.

We also do not yet know how profitable it will be or how much money it will cost to extract the gas, or what future gas prices may be. It is therefore important that the level set is sustainable for local communities and everyone else who has a stake, including the Government and the operators. It is in no one’s interest for the benefits to yo-yo and fluctuate to such an extent that no one knows what they are getting.

Some colleagues have called for a statutory underpinning for the agreement, so that the industry and Government cannot renege. I will put my trust in the work that the Minister is doing at this stage, but I seek assurance that were a company to renege on its commitment, the

16 July 2013 : Column 203WH

Government would not shy from being direct with it to ensure that the community benefit package was not lost to the people whom I represent.

Shale gas is controversial, but the Government are engaging with the issue and taking some tough decisions. I will be a critical friend of the Government. If they are not getting the regulations right or not engaging with the community, I will highlight that to the Minister. Similarly, the industry should not expect an easy ride; my colleagues and I will be emphasising anything that we regard as shortcomings. Any attempts by the industry not to adhere to regulations, not to engage with communities or not to ensure that communities are financial beneficiaries, and we will hold its feet to the fire.

We will return to this subject in many debates to come, Mr Benton, but I thank you for your chairmanship today.

Mr Joe Benton (in the Chair): Before we proceed, I assure Members that the air conditioning is working as effectively as possible. It is very close, but it will not get any better, I am afraid, so please feel free to remove your jackets, if you so wish.

2.50 pm

Mr Gordon Marsden (Blackpool South) (Lab): I will take you at your word, Mr Benton, and, as it is customary to say, it is a great pleasure and delight to serve under your chairmanship. It is also a great pleasure and delight to follow the hon. Member for Fylde (Mark Menzies), who is my constituency neighbour and who placed the arguments and his position with his usual sense and robustness. I will do my best to follow him.

The hon. Gentleman said what ought to be the theme of this afternoon’s discussion: the regulations must be robust and to the highest environmental standards. He rightly passed a warning shot—if I may put it that way—across the Minister’s bows about the use of language, and I shall return to that later in my contribution. The focus needs to be on “robust”, not on “streamlining”, and I entirely concur with what the hon. Member for Fylde said.

I also agree with what the hon. Gentleman told the Blackpool Gazettethat he would be

“inflexible on the point that there must be a gold standard of regulation reached before any potential move to the extraction phase.”

That is a position with which I wholeheartedly associate myself.

My hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex), who speaks for the Opposition, also holds that position. He will speak for himself shortly, but in an article for PoliticsHome, when the survey by the British Geological Survey was published, he warned about too much hype:

“For many who are against renewables, shale is the silver bullet. For some who advocate green technologies, the extraction of unconventional gas is catastrophic for the environment. While it may help generate lurid headlines, an absolutist position does little to ensure a realistic assessment of the role shale and other unconventional gas could play in our energy mix.”

That is an important position to set out.

16 July 2013 : Column 204WH

Coverage in the national media has become extensive, not least since so many people outside Blackpool and the Fylde were alerted to the matter by the famous occasion of the earthquakes, to which reference has already been made. I think that I am speaking for all hon. Members in the Chamber who represent constituencies in or near the Fylde when I say that there is a wide variety of views, ranging from absolutism at both ends to scepticism on either side of the frame. Those views were picked up well in a recent article in The Observer by Robin McKie, a distinguished science editor there for many years, who has dealt with the issues in a solid way.

The balance must be struck between the prospectuses of the companies concerned, which will necessarily be expansive, and the realities of the science on the ground and of the amount of gas that is actually extractable. The amount is a key issue, because, as the hon. Member for Southport (John Pugh) rightly identified, that might affect any arguments or discussions about the amount of money available at a future stage. It is therefore incumbent on the Government to get the balance right. At the end of the day, they will set the regulations—I concur with the hon. Member for Fylde that what DECC has done has been proportionate and measured—but I caution the Minister to continue in that line, not least in the context of the Chancellor’s remarks, because the Treasury’s position to date has been far too gung-ho in cheerleading for the industry.

The hon. Gentleman talked about unwarranted criticism of the Minister for wearing two hats, with his ministerial responsibilities for energy and for business. I am worried not so much about two hats as about the possibility of three—the third one appearing if the Minister were to follow his Treasury colleagues and become simply a cheerleader for the fracking industry. It is important that he remembers his quasi-judicial role as we take forward sensitive decisions. Language, whether emanating from him or from his civil servants, is particularly important.

Community benefit is the frame in which this afternoon’s debate is taking place, but which communities and where? There are communities of interest, reasonably so, in the development and the possible production of jobs, but also in the residents of the area and—not to be sneezed at—in the visitor and tourism industry. When we discuss the benefits or where the jobs will come from, we must look not only at what Cuadrilla or British Gas, which has now joined the enterprise, say about the numbers of jobs that might or might not be created—there can be lots of arguments about that—but at the impact on existing jobs, particularly in tourism, and on green issues. The number of jobs and the effects that those jobs will have on the local area from a positive point of view need to be balanced against the potential—that is all I say at the moment—for things to develop in such a way that tourism, the environment and the continued enjoyment of the Fylde area by residents are jeopardised.

I therefore move on to geographical communities, as well as communities of interest. Blackpool has not thus far been the site of any drilling experiences, but it was Blackpool that got the earthquake. In Blackpool, we were able to provide the definitive answer to the often-asked question, “Did the earth move for you?”, because it certainly did, and in some measure. Seriously, if such

16 July 2013 : Column 205WH

things are to have an effect on the reputation, image and attraction of Blackpool, then Blackpool must also be included as a potentially benefiting community, as well as the other areas of the Fylde.

I have mentioned the potential adverse consequences on seaside and rural tourism, and they should not be treated lightly. More independent assessments of the amount of work and jobs that might be created would be welcome. For my part, I so far remain fairly sceptical about some of the numbers produced by Cuadrilla, as I remain sceptical about some of its estimates for the amount of extractable gas available.

Dan Byles (North Warwickshire) (Con): I am not sure whether the hon. Gentleman has seen the Institute of Directors report, which was published about six or eight weeks ago, but it was interesting. It modelled what a pad might look like, how many jobs might be involved in the supply chain and so on. If he has not had a chance to look at that, it is worth doing so, because it is a substantial piece of work.

Mr Marsden: I thank the hon. Gentleman for his intervention. As a former member of the Select Committee who believes in evidence-driven policy, I will look at the Institute of Directors report, as I will look at many of the other bits and pieces that come before us. We can have as many reports as we like, but at the end of the day the issue will remain one of judgment and proportion. What I am urging on the Minister and the Department and what I think largely echoes what the hon. Member for Fylde said is that they should proceed with caution. The precautionary principle should apply. I make no complaint against some of the people who propose the change because they want their business to succeed, but in the famous words of Mandy Rice-Davies after the Profumo affair, they would say that, wouldn’t they? Some people in other business areas will look at it through their end of the telescope, but it is not our job as Members of Parliament to look at it through their end of the telescope. Our job is to look at the effect on our constituents.

With that in mind, I strongly urge that we proceed with caution on the precautionary principle and probe laser-like into what the benefits will be and how broad they will be, and perhaps even to look at the impact on rural and seaside tourism, which are and should be interlinked. Our primary concern as Members of Parliament in the area must be for our residents’ well-being and environment. The Fylde is not like Arkansas or other areas of the United States that are relatively large and sparsely populated. The concern, whether justified or not, about contamination of the water table and other negative effects experienced in the United States would be much more profound and pronounced in the UK.

This morning, I went to Tate Britain for a quick peek at the wonderful exhibition of Lowry’s paintings of industrial Britain. He had the ability to summon up a terrible beauty from the destruction and marred landscape of the industrial revolution. We should take care in our House and in our deliberations not to be overborne by hype or business prospectuses. I would not want to see some of that terrible beauty visited on the Fylde in the 21st century.

16 July 2013 : Column 206WH

3.2 pm

Dan Byles (North Warwickshire) (Con): I congratulate my hon. Friend the Member for Fylde (Mark Menzies) on securing this debate on this important topic. I am not a Lancashire MP, but I stand here as a member of the Select Committee on Energy and Climate Change, which has looked at the issue in some detail, and as chair of the all-party group on unconventional oil and gas.

I have worked on this issue in some detail and discussed it at great length with a wide variety of stakeholders throughout industry and beyond. There is great consensus on the community benefit and we have reached the stage where no one is disputing or discussing whether we should have a community benefit scheme; we are simply discussing the detail. There are various reasons why an effective scheme is important and it may be best summed up in a phrase that many hon. Members have heard before: the industry requires a social licence to operate. A community that hosts shale gas resources and could see shale gas development take place is entitled to ask two legitimate questions: is it safe, and how will our community benefit from the process? It is incumbent on the Government and industry to answer both those questions

Today’s debate is not about safety, except that, echoing hon. Members who have spoken, we must take this forward with the highest environmental standards, in keeping with the gold standard that we already apply to oil and gas regulation in the UK. Today’s debate is about the benefit to people and communities in Lancashire. It is their gas; it is not Cuadrilla’s gas or Centrica’s gas, and it is certainly not the Government’s gas, although the law may imply that it is. I am not a socialist, but as far as I am concerned, it belongs to the people of Lancashire, and it is important and absolutely right when developing a domestic UK shale industry that the local communities who will host that industry and new development should benefit from their own natural resources.

Loosely speaking, two benefits can accrue from a large-scale infrastructure project. One is the natural or organic benefit: the jobs, supply chain and activity from the very process of the investment and flow from the activity without intervention from the Government. The other, which is what we are principally talking about today, is the artificial cash benefit that can be put in place by the industry through voluntary agreements or by the Government to ensure that some of the profit and revenue stream from the industry are shared locally.

I want both forms of benefit to accrue to the people of Lancashire. On the first point, it is essential that the maximum benefit in jobs and investment accrue as locally as possible to the operation of the shale gas pads. Employing local people and developing a local supply chain is fundamental to making the industry part of the community instead of it being an outside industry that comes in and does things to the community.

In Aberdeen and the surrounding region, for example, the offshore oil and gas industry supports 137,000 direct, indirect and induced jobs. We may not see quite the same number of jobs in Lancashire, much as we would all love to, but the highly detailed report by the Institute of Directors estimated that there is potential for up to 74,000 direct and indirect jobs nationwide from developing

16 July 2013 : Column 207WH

UK shale gas. Not all the jobs will be in Lancashire, but many will, and it is important that when the industry and particularly the supply chain go forward with their plans, they do their best to maximise the number of jobs that stay locally within the region.

On the artificial cash benefits, the proposals currently under discussion have been alluded to: £100,000 per exploratory well and eventually 1% of revenue from the development phase going to the local community. Over the lifetime of a shale gas pad, that could amount to a considerable sum, and I agree with those who have already noted that we should remain flexible about community benefits to ensure that, as the industry’s profitability becomes better known and we have more information, we can ensure that the benefits remain at a suitable level.

I share my hon. Friend’s concern about one fundamental and important question. How does one define the community? Most of our present discussions about community benefits boil down to the question, who is the community? The judgment call on exactly who should receive a direct benefit is often spoken of in terms of municipal level—parish, district or county—but it is important to note that people do not necessarily mean the parish council, the district council or the county council. They use those words as shorthand for the municipal level to which the community benefit should go.

If the community is defined too narrowly, it may create division rather than consensus, and I have seen that in my constituency. When campaigning in Curdworth as a young parliamentary candidate not that many years ago, I asked what the village’s main issue was and someone said, “Them on that side of the village got compensated for the Birmingham northern relief road and we over here, one road over, weren’t.” The compensation package had caused division in the village because the definition of who should benefit was too narrow.

However, if the definition is too wide, there are two concerns. One is simply that if the benefit is diluted too much, it may not provide a genuine benefit. Another danger is the message sent about the impact of the industry. If someone living 10, 15 or 20 miles from a shale gas pad is told that they will receive a community benefit to compensate them for having it in the area, are we not pandering to a myth, because someone 15 or 20 miles away may not notice that it is there? The evidence is that there will probably be no impact more than a few miles away from a shale gas pad.

Graham Stringer (Blackley and Broughton) (Lab): There is an interesting historical point behind the name of this debate: what is Lancashire?

Dan Byles: Tell us.

Graham Stringer: For the purposes of this debate, I think Salford can be Lancashire and that there will be immediate benefits there.

Does the hon. Gentleman agree that apart from immediate local benefits, there will be general benefits for the whole country if the exploitation of shale gas is successful because the real impact will be a lowering of energy prices?

16 July 2013 : Column 208WH

Dan Byles: I absolutely agree that it is important not to forget that Lancashire is part of the wider UK economy and that there are potentially significant benefits to not only Lancashire, but the whole UK economy. The jury is still out on how much shale gas might bring energy prices down, but it is certainly true that it might help to prevent them from rising as much as they might have done, which is, in effect, the same thing.

The majority of the members of a community who will be impacted by such development will be affected not by the actual activity of drilling for gas, but by the wider construction activity. In that respect, shale gas development is no different from any other infrastructure development. More people will probably be affected by things such as truck movements than by the activity of drilling for the gas.

When the Energy and Climate Change Committee visited Hinkley to discuss the Hinkley Point C power station, we had a long discussion with local parish councils about their concerns. I was struck by the fact that not one mentioned the fact that a nuclear reactor was going to be parked at the side of their town as a concern. They were concerned about truck movements, dust, noise, vibration and, interestingly, which pubs the itinerant work force were most likely to drink in.

When we look at the wider community benefit, and at how wide we go, therefore, it is important that we do not give the impression that somebody who lives five, 10 or 15 miles away from a shale pad requires compensating because of some activity that takes place there.

Others wish to speak, so I will say no more, other than that there is widespread agreement over the principle we are talking about. I do not think anybody here disagrees with the broad thrust of what community benefit will look like. We are now down to the definitions. What amount are we talking about? How should we levy it? Which community will benefit? Later, there will also be the practicalities of how moneys will be disbursed and to whom. We are in a good place, given that we are discussing the mechanisms involved in getting these things right, rather than whether we should do them. There is wide consensus that we should do them, and I think that is right.

3.11 pm

John Pugh (Southport) (LD): It is a pleasure to serve under your chairmanship, Mr Benton. I congratulate the hon. Member for Fylde (Mark Menzies) on the lucid and clear way in which he introduced the debate.

There are many views of fracking. Some, I do not agree with, although I respect them. The Tyndall view of fracking and shale gas is simply that getting them out will add to the greenhouse gases circulating around the globe, so they should be left where they are. I do not agree, for reasons that may or may not be correct, although I believe them. Principally, I do not think that our energy consumption will fall much over the next 20 years or that renewables will be sufficiently developed by that stage to plug the gap. Other alternatives also seem pretty unattractive. One is the extensive building of nuclear power stations. Buying ever cheaper coal—coal is becoming cheaper—is another. Importing gas is probably the favoured alternative, and we will probably face a choice between using Russian, Kazakhstani or Qatari gas or shale gas, which we have in appreciable abundance

16 July 2013 : Column 209WH

in Lancashire—the shale there is much deeper than in many parts of the United States, where shale gas is being exploited to some effect.

I have the advantage of having visited one of the exploratory wells and seen the precautions taken to ensure that what happens is not environmentally intrusive or damaging. I therefore have a better feeling about the regulations the industry must currently abide by, although we are looking at a tougher regulatory environment in the future. We already have extensive planning controls and health and safety regulations, as well as oversight from the Environment Agency.

Clearly, good regulation is crucial to the successful development of shale gas. I say that because I have also seen some slightly alarmist anti-fracking propaganda. We have probably all had sight of “Gasland”, with the taps that catch fire and so on, and we have probably all heard the exaggerations about the chances of pipes fracturing, threats to the water supply and subsidence. People have also exaggerated the number of wellheads we need, and they have talked about traffic densities and movements that are unlikely to materialise—producers are unlikely to want to move gas around by lorry if they can find a better way to move it. To be fair, a lot of the people who object would object if all those concerns were set aside; in other words, they have the same fundamental objection as the Tyndall climate change group—they think shale gas is not something we should dally with and is not something for the future.

Against that argument, there are clearly powerful economic arguments. If shale gas materialises as Cuadrilla and others hope it will, that will be good for the country’s balance of payments and it could have huge implications for the north-west’s economy. My constituency, which is on the edge of the Bowland special protection area, will, I hope, benefit in some way. I am not holding my breath on that, because we have seen false dawns locally before. Gas was discovered in the bay, and the production facilities can be seen from Southport beach. We hoped that that would have enormous benefits for the local economy, but it led to Hamilton Oil sponsoring a few events, and that was it. When one of the few fibre-optic cables from America came on land on Southport beach, I dreamed of Southport becoming not the Aberdeen of the north, but the silicon valley of England, but, somehow, that did not happen; we just got a quietly humming shed on an industrial park and little in the way of local employment. I am not, therefore, holding my breath, but I am none the less encouraged by the fact that the shale gas industry has made some pretty good opening moves, which will, I hope, move us in the direction of rebalancing the economy and provide some local community benefit.

Through the Treasury, the Government are concentrating principally on incentivising shale gas development. I am in favour of that, and we certainly need to explore it, because this business could be hugely profitable. The issue then is, what will happen to all the profits? Will they simply leach out to the south-east or wherever the company headquarters are, or will we feel the benefit locally? If I can throw my two pennies-worth on the table, I would like to see a levy that is channelled towards investing in permanent renewable energy in the area. At some point, the shale gas, like all other such energy sources, will run out. Other Members have other attitudes and other proposals. The hon. Member for

16 July 2013 : Column 210WH

Fylde talked about the supply chain, and I agree with what he said about that. He also talked about energy rebates, and none of my constituents would be unhappy to receive them.

We are at the beginning of what will probably be quite a protracted discussion with the Government and the industry, but it is important that we discuss these issues among ourselves. Those of us who are embittered northerners have too often seen wealth generated in the north accumulated and spent somewhere else. That is the one thing, above all, that we wish to prevent.

3.18 pm

Eric Ollerenshaw (Lancaster and Fleetwood) (Con): It is a pleasure to be called after the hon. Member for Southport (John Pugh). As a Member from the embittered north, may I say that I am really pleased that Salford still regards itself as part of Lancashire? I am even more pleased that north Warwickshire now regards Lancashire as part of the United Kingdom. It is nice to know these things.

I congratulate my hon. Friend the Member for Fylde (Mark Menzies), whose constituency I have to drive through every week to get to a third of my constituency, on getting the debate. As he said, this is the second debate he has initiated on this issue. I have managed to get only one, but he has managed to get two, which shows the power he has. However, I have a part share of the debate on shale gas on Thursday, so perhaps things are more balanced. On Thursday, I will talk more about safety matters; today, in view of the time, I will talk principally about the compensation system.

In our earlier debates, virtually all of us stressed the need for the Government to commit, at least in principle, to some form of community compensation when a possible go-ahead with extraction was announced. In that sense, we are pleased with where we have got to. We have had the announcement that the compensation system will be established. We have learned that it will be run by the United Kingdom Onshore Operators Group. We have learned it will provide £100,000 per wellhead at the exploration stage, and I will be interested to hear the answer to the question from my hon. Friend the Member for Fylde about the distinction between wellheads and pads. We have also had the indication that, once production starts, 1% of all revenues generated over the lifetime of the well will be allocated to the local community. The suggestion is that one third will go to the county and two thirds to the local community, which I assume means the district.

In one sense a good start has been made, and I compliment the Minister on the work he has done to get things to that stage; but we want more clarity and certainty. We also want a guarantee of additionality, and ideally we want more money. I will begin by talking about clarity. At the moment the UK Onshore Operators Group has said that two thirds of the revenue generated will go to the local community. My hon. Friend the Member for North Warwickshire (Dan Byles) raised the question of what the local community is. There is a question in relation to the wellhead: that because of the engineering that could be used in Lancashire it will go down vertically and then horizontally. Will the local community be defined in relation to the extent over

16 July 2013 : Column 211WH

which the gas is extracted, or just where the wellhead is? I am not splitting hairs: those things will be brought up locally, for Members of Parliament to answer.

As to the figure of two thirds being directed locally, does that refer to the district councils, such as Wyre, in my case, or Fylde; or does it mean a unitary authority—Blackpool? My major concern is about what happens if those councils take the third or two thirds. What commitment do we have that that will really be seen as additional to the normal process of local government revenue grants? I have absolute faith in my right hon. Friend the Minister and, indeed, in the shadow Minister, the hon. Member for Rutherglen and Hamilton West (Tom Greatrex), but let us think of a future time, when other Ministers have come along. What if Lancashire county council, or, indeed, the district councils, are gaining a fair amount of money just on the basis of the 1%, and they apply for the normal general grant? Or what if there are regional growth fund applications for the area? Will not a future Minister say, “Well, Lancashire has that money; it does not need this other money”? That is my argument about additionality. We need some guarantees about it—that the money will be additional, above and beyond what the localities would normally expect under the local government or business funding systems or whatever, and they will not be disproportionately treated because there is extra money.

We are all struggling to find the right vehicle and I am sorry that none of us has the perfect answer—the hon. Member for Southport and others hinted at one—to whether the money should go into something like a sovereign wealth fund for Lancashire, or, indeed, a trust fund. That might be managed by professionals, but open to applications from the districts, parishes and counties for funds—and major, structural funds. My other argument will be that 1% is not enough. Big profits will be made. I understand the strictures of the hon. Gentleman: we are at the beginning of an industry. However, perhaps there could be a rising scale as the profits mount up. There is a serious issue about 1%: it is not enough. If the predictions about the productive capacity of the Bowland shale are right—and it stretches across Lancashire and parts of Derbyshire, and even that other county called Yorkshire—5% would be a substantial amount of money, which would guarantee to the people of those areas that something would be left after the shale gas was gone, as it eventually will be. That something might be renewable energy; it might be all kinds of things, but that is the kind of vehicle that I suggest.