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Moved accordingly, and, on Question, Bill passed, and returned to the Commons with amendments.

European Council: 21-22 June 2007

4.18 pm

The Lord President of the Council (Baroness Amos): My Lords, I should like to repeat a Statement made in the other place by my right honourable friend the Prime Minister. The Statement is as follows:

“With your permission, Mr Speaker, I shall make a Statement about the outcome of the European Council in Brussels on 21 and 22 June.“I congratulate the German Chancellor, Angela Merkel, on concluding successfully an exceptionally difficult negotiation; and on an outstanding presidency of the European Union.“Before the European Council, I made it clear that the concept of a constitutional treaty for Europe had to be abandoned, and that we should agree instead a conventional amending treaty like the Nice, Amsterdam and Maastricht treaties and the Single European Act. I also made it clear that the UK had four central demands which had to be met.“First, on the Charter of Fundamental Rights, we secured a legally binding protocol, specific to the United Kingdom, and applicable to both the British courts and the European Court of Justice. Let me read the terms. The protocol states that:‘the Charter does not extend the ability of the Court of Justice, or any court or tribunal of the United Kingdom, to find that the laws, regulations or administrative provisions, practices or action of the United Kingdom are inconsistent with the fundamental rights, freedoms and principles that’,the charter,‘reaffirms. ‘In particular, and for the avoidance of doubt, nothing in the Charter creates justiciable rights applicable to the United Kingdom except in so far as the United Kingdom has provided for such rights in its national law’.“In respect of our criminal law system and police and judicial processes, we obtained an extension of the opt-in rights that we secured in an earlier treaty on migration, asylum and immigration issues. This

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means that we have the sovereign right to opt in on individual measures where we consider that it would be in the British interest to do so, but also to stay out if we want to. It is precisely the pick-and-choose policy often advocated. It gives us complete freedom to protect our common law system, but also allows us to participate in areas where co-operation advances Britain's interests. In asylum and immigration, for example, we have opted in on measures dealing with illegal immigration, and in measures allowing us to return asylum seekers to other European countries—both unquestionably in Britain’s interests. But it will be within our exclusive power to decide on a case-by-case basis. This is exactly what we wanted.“In respect of social security, we negotiated a provision which allows us to insist on unanimity in any case where we—Britain—declare that any proposal from the Commission would affect important aspects of our social security system, including its scope, cost or financial structure or balance. Our social security and benefits system is therefore completely protected. “As for the common foreign and security policy, the basis of this will now remain unchanged in a separate treaty, and a separate pillar, from the first pillar Community method. The essential features of the CFSP remain as they were. Unanimity voting is the rule. There is no sole right of initiative for the Commission. There is no role for the European Parliament in decision-taking. There is no jurisdiction for the European Court of Justice, except in the particular case of safeguarding the rights of individuals subject to EU sanctions. The two jobs of Commissioner for External Relations and high representative, which of course exist already, will be amalgamated in a single job, but this reform does not extend the EU’s substantive powers to act in foreign policy. In particular, the Union representative, when working on common foreign and security policy issues, will operate within a policy framework set by the EU Foreign Ministers, by unanimity. “All these guarantees not merely remain in the new treaty, but are reinforced in a new ‘overview’ article which reaffirms them and has full legal force. For the avoidance of doubt, we obtained also a declaration which sets out the unanimous view of all member states about the meaning of these guarantees. This declaration, which then informs the detailed negotiation of the IGC, states that the CFSP provisions of the treaty, including in respect of the office of Union representative and the external action service,‘will not affect the existing legal basis, responsibilities, and powers of each Member State in relation to the formulation and conduct of its foreign policy, its national diplomatic service, relations with third countries, and participation in international organisations, including a Member State’s membership of the Security Council of the UN’. “There was also a discussion at the Council about competition. The treaties have always made it clear that competition in the internal market should not be distorted. The now defunct constitutional treaty’s objectives would have included new wording

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about ‘free and undistorted competition’. When the treaty was set aside, that provision was lost, but we agreed on a new and legally binding protocol, to be annexed to the treaties, which reaffirms the commitment to ensuring that competition is not distorted. The other references to competition in the existing treaties will remain—for example, Articles 4, 27, 34, 81 to 89, 96, 98, 105 and 157 from the European Community treaty. The legal position in relation to competition therefore remains unchanged. “Alongside meeting our four essential requirements, we secured a number of further improvements. The new treaty will confirm for the first time, explicitly, that national security is the sole responsibility of member states. The Union already signs international agreements, but the treaty formalises legal personality. However, we have now agreed a declaration by all countries for this IGC confirming that this fact of legal personality does not authorise the Union in any way to legislate or act beyond the powers conferred on it by the member states in the treaties. There are new powers for national Parliaments to object to Commission proposals on subsidiarity grounds.“There are a number of extensions of qualified majority voting. In the most sensitive areas of QMV—justice and home affairs and social security—we obtained the right either not to participate or to insist on unanimity. In addition, a number of other measures of QMV—for example, those about rules within the euro-zone, or those in JHA—do not apply to us. As for the rest, we have agreed them because qualified majority voting is often in Britain’s interest. The biggest move to qualified majority voting in Europe’s history was the Single European Act, but this allowed the creation of one of Europe’s greatest achievements, the single European market. More recently, we have secured reforms such as the services directive and other liberalising measures through QMV, including the lifting of the beef ban, when they would certainly have been blocked under unanimity. Among the QMV provisions in this treaty is one which provides a new legal base and QMV for energy market liberalisation and another which provides QMV for decisions on emergency humanitarian aid to third countries, which are both manifestly in the UK’s interest. “The other main reform is the fixed term, two-and-a-half year presidency of the European Council, replacing the current rotating six-monthly arrangements. This is necessary for the Union’s efficiency, but it does not involve any extension of the president’s powers. The president of the European Council will remain the servant of the leaders of the member states. “The most important aspect of this new treaty is that it allows the European Union to move on to the issues which really matter. For too many years, we have been bogged down in a debate about the institutions. Change is essential, with the increase from 15 to 27 member states, but with this agreement we can now concentrate on the issues that really matter: energy security; organised crime and terrorism; globalisation; further enlargement; and making Europe’s voice more effective internationally.

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“This agenda is quintessentially in Britain’s interests. Over the past 10 years, Britain has moved from the margins of European debate to its centre. This is absolutely right for Britain. Whether in defence, economic reform, energy policy, or the environment, and of course most particularly in enlargement and the appointment of the new Commission president, Britain has for a decade been in a leadership position in Europe. That is exactly where we should stay. I commend this agreement to the House”.

My Lords, that concludes the Statement.

4.28 pm

Lord Strathclyde: My Lords, this is clearly an historic occasion; it is the last Commons Statement by Mr Blair as Prime Minister and perhaps even—although I hope not—the last occasion on which the Leader of the House will, with her invariable courtesy, repeat a Statement. I wish her well in the course of the next few days.

In 2005, the Labour manifesto said of the treaty:

“We will put it to the British people in a referendum”.

Despite the sentence in the conclusions that the constitutional treaty has been abandoned, we still have a major EU constitutional amending treaty on the table which makes massive changes in the relationship between nation states and the EU as a whole. It is a treaty in which Monsieur Giscard d’Estaing, the author of the constitution, says that people are being led,

“to adopt, without knowing it, the proposals that we dare not present to them directly”.

Yet the Prime Minister says now, “We will not put the EU treaty to the British people in a referendum”. The whole Statement is designed to argue that it is a nothing and that a firm promise given to the public into 2005 can be broken.

Playing small-print word games to escape promises has discredited this Government. Let it not now discredit Europe. Winning the endorsement of the British people—if it is so insignificant, the Government must surely feel that they can—would strengthen Europe and, win or lose, lance a boil in our politics. We hear much talk about red lines—red herrings, as my right honourable friend Mr Hague rightly termed them—but beyond the spin, does the noble Baroness accept that the reality is this, in words every one of which has been taken from the presidency conclusions? There will be an IGC before the end of July. The incoming presidency is to draw up a draft treaty text and submit it to the IGC as soon as it opens. The reform treaty will introduce in the existing treaties the innovations resulting from the 2004 IGC that launched the constitutional process. The IGC will complete its work in any case before the end of 2007, so as to allow every country to ratify the resulting treaty before June 2009.

No one who has read the compendious description of the treaty provisions in the present communiqué can have any doubt that it is a huge programme of constitutional change, a major extension of EU competence and a further step towards the more

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integrated, harmonised, controlling Europe that no one outside the Cabinet makes any pretence of saying is not the overriding objective of the European Union. If the treaty is ratified, Britain will find itself locked into an enormous new entity with a transformed constitutional identity—something that directly affects our national interest. Any opt-out can be given away, as the Prime Minister demonstrated on the social chapter in Amsterdam in 1997, and any red line may not be driven across, but it can certainly be driven around, as Mr Frank Field acutely observed, reinforced by the experience of the history of the Community.

Does the noble Baroness not see this as a major integrationist treaty, a step in the wrong direction, in which many more areas of veto are given away and the aims of harmonisation and centralisation are relentlessly laid out in every line of the presidency conclusions?

Revering, as I do, the contribution of European nations in all their diversity and richness to the development of modern civilisation, I expressed deep sadness at the loss of opportunity that that represents. The summit should have been about free trade, climate change and the agony of Africa in places such as Darfur and, yes, Zimbabwe. It should have been about the modern EU network, which we want, and which the people of Europe want, not about the further centralisation of powers so beloved of bureaucrats and those who put efficiency before democracy.

Again, that opportunity was lost in the obsession with powers, centralisation and control. What happened to all our hopes, all the talk of a return of powers to national Parliaments and of making the EU institutions much more accountable and far closer to the people?

If the Prime Minister was doing anything other than spitting in the wind when he boasted that Europe was coming our way, he has his reality check now. Not even the all-important principle of undistorted competition has survived. Mr Sarkozy has boasted of his victory over the United Kingdom in enabling protectionism. Will the noble Baroness confirm that criminal justice is being moved from intergovernmental control to jurisdiction by the European Court, something that the Foreign Secretary has called a major change? Does she agree that an EU foreign minister by any other name is still an EU foreign minister? Can she not see that we should have been moving to a new, slimmer kind of treaty, a new kind of Europe that swept away elements of the acquis that have proved constricting, that preserved flexibility, diversity and localism while sustaining the enormous benefits of co-operation?

That would have been the right way for Europe. That is precisely what the treaty is not. It surely must have the endorsement of the British people, who will now find Europe changing around them.

For the first time in 10 years the Prime Minister and the Chancellor are united on something. How sad it is that it is to deny the British public a say. Next month our new Prime Minister will have to go to the IGC and fight for Britain and Europe. When he goes to negotiate he will find other EU leaders a lot less

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naïve and a lot more determined than many of the people with whom he has had discussions in recent weeks. He will need all the support and resolution he can muster. He has said that he would be a servant to the people. How much stronger would be his negotiating hand if he had the resolution of Parliament and people behind him before agreeing to any sea change of this kind? Other countries will have a referendum. Why not here?

4.35 pm

Lord McNally: My Lords, I thank the Lord President for repeating the Statement. I associate myself with the congratulations that were given at the beginning of it to Chancellor Merkel for her skilful leadership of the European Union over the past six months. I also associate myself with the comment at the very end by the Prime Minister that the most important aspect of the new treaty is that it allows the European Union to move on to the issues that really matter, something that was echoed in the comments of the noble Lord, Lord Strathclyde. The only problem with the noble Lord’s remarks is that—and this was emphasised even more at the other end of the Corridor—they totally ignored the wise advice contained in an article in the Sunday Times by Mr Michael Portillo two Sundays ago, when he said that, whatever else the Conservatives did in reaction to this summit, they should avoid tying themselves to their wild-eyed anti-European members. The danger is, as Mr Ken Clarke has also observed, that a reaction that would have demanded a referendum on the date at the top of the paper does not carry much credibility.

I am still trying to get my head round the idea of a Labour Prime Minister going to Brussels to argue for an opt-out on workers’ rights, but I understand the overall nature of his mission and we on these Benches welcome the reforms, which contribute to a more efficient and functioning EU. It is difficult to identify a single issue—from climate change to terrorism and from organised crime to energy security—that is not dealt with better in Britain’s interests within the EU. We welcome the fact that the European Council has reached agreement; it is critical that it has a proper rule book for 27 member states. It is interesting that a subset of the arguments about enlargement of the Community was that it would collapse for the lack of a good rule book. This Council has headed off that danger, so Europe can get on with the task of delivering on matters of supreme importance to the people of Europe.

Perhaps the Lord President will clarify the question of competition policy. A worry has been expressed by the CBI—and, I note, by the noble Lord, Lord Brittan, in an article in the Observer—that there was a danger over that. I was reminded by the Statement that, in dealing with the single market, we are preserving one of the most hard-fought and most successful achievements of the Administration of the noble Baroness, Lady Thatcher.

We also welcome the new powers for national parliaments and wonder whether the Government have any initiatives to look at our own structures on how we deal with European legislation.

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One concern, which was echoed at Question Time, is the trumpeting about opting out of areas in home affairs. On counterterrorism, drugs, people trafficking and immigration, the logic is that we need more European co-operation, not less. It seems odd that we make a virtue of making things more difficult for ourselves in those areas.

We support the treaty because it allows Europe to get on with the real business, such as the initiative to get a successful conclusion of the Doha round, a special European initiative to help in Gaza and giving impetus to the Portuguese initiative on Africa. The problem is that this country has been stuck in an “in or out” debate that is over 30 years old. Everything we have heard from the Conservative Party seems to take us back to that “in or out” debate. Europe and the British people need to move on, on the basis of this constitution, to address the issues that are at the top of the people’s agenda, not those on the agenda of people who, as Mr Portillo quietly warned, have that wild-eyed commitment to anti-Europeanism that has done so much damage to their party in recent years.

4.41 pm

Baroness Amos: My Lords, I thank the noble Lord, Lord Strathclyde, for his good wishes for my future. I have noticed that as soon as people think that you might be moving elsewhere, they become terribly nice to you. I shall read the noble Lord’s comments in a positive, not negative, way. My noble friend Lord Grocott—who is not in his place—whispered to me, “What about the Chief Whip?”, so perhaps the noble Lord would like to send him his good wishes on another occasion.

I do not agree with the noble Lord, Lord Strathclyde, that the outcome of these negotiations is a nothing. I would not dream of arguing that, nor would the Government. We wanted institutional change and we got it. The Prime Minister made it clear—not only in his Statement, but also in the run-up to these negotiations—that part of the reason why institutional change is so important is so that we can move on to Europe playing its rightful part in tackling some of the big issues, such as the environment, energy security, climate change and some of the issues raised by the noble Lord, Lord McNally. It is important that the European Union grasps these issues and considers them. Institutional change is important because it allows us to move on. We also wanted to secure Britain’s interests and we did so. That is important, too.

The noble Lord, Lord Strathclyde, talked about the draft treaty and the timetable. The mandate annexed to the conclusions is clear. I shall read one sentence from it:

“The constitutional concept, which consisted in repealing all existing Treaties and replacing them by a single text called ‘Constitution’, is abandoned”.

That is the wording for the draft IGC mandate. We will publish a White Paper in advance of the IGC. There will be consultation, and Parliament will then have an opportunity to have a further say when it considers the legislation that will come before both Houses.

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The call for a referendum on what is another amending treaty is interesting, given that we did not have a referendum with the Single European Act, Maastricht or subsequently with Amsterdam and Nice. It is also interesting that the majority of Members opposite who spoke in a recent debate on European issues argued against a referendum. Other members of that party have made interesting comments about referendums. The noble Lord, Lord Heseltine, said:

“I mean the big steps into Europe consolidating British position in Europe, far more important than this particular treaty, were all taken by Conservative governments, and none of them felt it was necessary to have a referendum”.

Kenneth Clarke said:

“I disapprove of a referendum. I do think it is a serious blow to the sovereignty of Parliament”.

Another Conservative, the noble Lord, Lord Patten, said:

“This Tory notes that the intellectually honest position of many of those in the forefront of the present campaign for a referendum is complete British withdrawal from the European Union”.

I can only suggest to the House that this is about political opportunism. This is about a Conservative Party that has nothing to offer in terms of a strong Britain in Europe and whose leader could not even be bothered to go to the meeting called by Angela Merkel for EPP colleagues in advance of the European Council because he was too busy. How will we ensure a strong Britain in Europe when we have an Opposition who are not even prepared to engage in the debate and on the issues?

It is not true that every other country within the European Union will have a referendum. The only country in the European Union that is constitutionally obliged to have a referendum is Ireland. No other country so far has indicated that it feels that it will have to have a referendum on these issues.

The noble Lord, Lord McNally, asked me questions on a number of areas. Perhaps I may clarify the competition policy. The treaty will provide legal certainty on EU powers to continue to regulate cartels, mergers and anti-trust violations. It includes specific language on the need to ensure that competition within the EU is not distorted. The individual articles of the treaty, which lay down the specific powers to ensure competition in the single market and to regulate state aid and mergers, are unaffected.

On the Charter of Fundamental Rights, I know that it looks as though the Government were seeking to opt out of issues. The charter ensures that the institutions, bodies and agencies of the Union will be bound to recognise rights in exercising any of their powers. The charter should help to ensure that citizens’ basic rights and liberties are protected at EU level, as they are in their own countries. However, we feel absolutely certain that, with our human rights legislation, employment protection legislation and other legislation, we have already secured those rights within current UK domestic law.

The important thing on justice and home affairs is that we have secured an opt-in. Therefore, we will opt into those areas where it is important that we work

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together, of which the noble Lord, Lord McNally, mentioned a number. We saw important successes relatively recently on counterterrorism and on drugs. The European arrest warrant, too, has been important to us in working constructively with our European Union colleagues. However, where we feel that these justice and home affairs issues are not in Britain’s best interests, we will not opt into them.

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