18:42 - The House divided: - Ayes: 330 / Noes: 20 - Question accordingly agreed to.
The Minister for Europe (Mr David Lidington)
I beg to move,
That this House takes note of European Union Document No. 15521/13 and Addendum, a Commission Communication: Commission Work Programme 2014; agrees that this document is a useful tool for planning the Government’s and Parliament’s engagement with the EU in 2014; and supports the Government’s view that measures which promote growth and jobs in the EU, including measures towards completing the Single Market, are the top priority.
This year’s work programme is the last for the current European Commission. It covers what the Commission is giving priority to in the final months of its mandate as well as some new initiatives and, of course, it does not cover everything that the European Union and its institutions are doing.
In last year’s debate on the annual work programme, right hon. and hon. Members focused in particular on the process of our scrutiny of European legislation. Prior to this year’s debate, the House’s European Scrutiny Committee published a report on reforming scrutiny in this place. I want to give the House an assurance that the Government are considering that report with the seriousness that it would expect and we will publish our response as soon as we can.
Mr William Cash (Stone) (Con)
As the Minister has referred to the report and to the formal response that the Government must give to it under the conventions of the House, I think it might be appropriate to mention the reactions of some members of the Government—I will not say everybody—to the proposals. They were described as “unrealistic” by one Minister and “unworkable” by another. That is not entirely consistent with the formalities of the convention that applies, but I think we will find that we will get a good response, as the Government have also said that it is a very important study.
Mr Lidington
This is an important study, which makes a large number of recommendations. The recommendations in my hon. Friend’s report have a bearing on business, which is the responsibility of pretty much every Government Department. The discussions that we are having at both official and ministerial level reflect the breadth of the areas of policy covered by my hon. Friend’s Committee.
The Committee noted, in its report recommending today’s debate, that—
Mr Lidington
One second.
The Committee recommended that the debate on the work programme should provide a useful starting point in the upstream scrutiny of EU proposals, and should help Parliament to make an early assessment of those dossiers in which parliamentarians are likely to take particular interest.
Wayne David
I thank the Minister for giving way. I wanted to intervene immediately after the hon. Member for Stone (Mr Cash), because we read in the press that the Prime Minister had received a letter signed by 95 Conservative MPs supporting what the European Scrutiny Committee had said. Has the Prime Minister in fact received that letter, and do we know who those 95 people are?
Mr Lidington
I am afraid that I do not inspect the Prime Minister’s correspondence on a daily basis. If the hon. Gentleman wants to find out more about that letter he could go and talk to my hon. Friend the Member for Stone (Mr Cash), who chairs the European Scrutiny Committee, or my hon. Friend the Member for Harwich and North Essex (Mr Jenkin), or others who helped to draft that letter.
Mr Lidington
I shall give way to the hon. Gentleman, but may I say, Madam Deputy Speaker, that I am conscious of the fact that we have a limited amount of time for the debate. There are a number of Members on both sides of the House who want to participate, so while I shall try to give way wherever possible I am conscious of the need to allow others to speak.
Madam Deputy Speaker (Mrs Eleanor Laing)
The Minister is absolutely right, and he has been most courteous to the House. I trust that other Members will be courteous to the House in keeping interventions brief.
Mr Lidington
I shall give way to the hon. Member for Derby North (Chris Williamson).
Chris Williamson
Following what my hon. Friend the Member for Caerphilly (Wayne David) said about that letter, it was reported yesterday in the Evening Standard that a Minister had described the people who had signed the letter as “thick”. Will the Minister say whether it was him or another Foreign Office Minister who did so?
Mr Lidington
I advise the hon. Gentleman not to believe everything that he reads in the newspapers. If he directs his attention to the Government motion and, for that matter, to the European Scrutiny Committee report referring the document for debate, he will find that nowhere in the motion or the report is there any reference to letters from any right hon. or hon. Member on either side of the House. I propose to concentrate on the matters that the European Scrutiny Committee has referred to the House for attention and consideration.
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. May I again reflect what the Minister has said? The matter before us does not concern letters to the Prime Minister. Members are required to stick to the matter before us.
Mr Lidington
This year, a new European Commission will take office. An important task is therefore to focus on those areas of the work programme that the United Kingdom Government would like to see as continued priorities for the next European Commission. It should come as no surprise to the House if I say that the Government’s priority is focusing on measures that encourage growth and jobs, and which are intended to deepen the single market, and on better and less costly and burdensome regulation so that we can free businesses in Britain and throughout Europe to compete vigorously in the global marketplace.
Andrea Leadsom (South Northamptonshire) (Con)
Does my right hon. Friend agree that a sensible reform for the European Union is to spend more than the 2% of its budget that it currently spends on trade on further promoting free trade agreements with countries around the world that could help precisely in generating jobs and growth in all EU member states?
Mr Lidington
My hon. Friend makes a powerful point. The directorate general dealing with trade does a pretty effective job, although, as she says, it accounts for only a very small proportion of the EU’s overall spending. If we are looking for a reallocation of priorities, I would agree that in terms of resource, good people, political priority and political will, global trade agreements should be a key focus for the UK and Europe as a whole.
Nicholas Soames (Mid Sussex) (Con)
Does my hon. Friend sense in the Commission’s work programme, including in the transition to the new Commission, a move to that agenda, to which we attach such importance for growth?
Mr Lidington
I do find in the Commission’s work programme an explicit acknowledgement that, for example, the EU is currently falling short in the implementation of the single market in services and the digital economy, and that more needs to be done in those respects. I also find an explicit commitment by the Commission to the priority that needs to be given to growth and jobs. In talking to Ministers from other European countries, I find them acutely aware of the challenge that Governments throughout the continent face from global competition, but also from the high levels of youth unemployment, which, tragically, we see in far too many countries.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
May I give my right hon. Friend an example of an area in which the work programme includes a commitment that is burdensome to business, which has been scrutinised by the Justice Committee and needs to be changed, and it is the draft data protection directive?
Mr Lidington
Yes, my right hon. Friend makes a good point. As he knows, the Government’s belief is that data protection legislation is better handled by way of a directive than by way of a regulation, which does not allow properly for subsidiarity and the different systems in different member states. As a Government we are determined to ensure that the modernised data protection regime, which we need, in part to serve a continental-wide digital economy, is shaped in such a way as to minimise the regulatory burden on businesses. We want those data protection arrangements to be such that, yes, they give adequate protection to data subjects, but they do not hinder business from going out, winning the contracts and creating the jobs, as we all want to see them do.
Graham Stringer (Blackley and Broughton) (Lab)
After a slow start the Government have realised the economic benefits of fracking to this country’s economy. Under annexe 2, on new initiatives, there are the regulations that will apply to fracking across Europe. Does he share my worries that there are members of the Commission who want to use those regulations to stop the exploitation of shale gas?
Mr Lidington
There are people in the institutions and elsewhere who certainly support policies that would inhibit the development of shale gas resources. We have made it very clear, from the Prime Minister down, that we believe that such a course would be wrong and would be a betrayal of the interests of European business, of European consumers, who would like to benefit from the lower energy prices that shale development would bring, and above all of the interests of those who are out of work, where a shale gas industry would not only provide additional employment in its own right, but, by maintaining a downward pressure on energy prices, would make it possible for more companies throughout the economy to hire additional employees. The UK Government will continue to work closely with the Governments of countries such as Poland and Hungary, which also have a clear commitment to the freedom of member states to develop shale gas resources in the interests of consumers and producers alike.
Mr Lidington
No, the hon. Gentleman has had a bite of the cherry already, so I will make some progress.
It is good that the Commission has focused on continuing negotiations on the transatlantic trade and investment partnership. The Government estimate that the benefits of that deal to this country could be worth up to £10 billion a year, or more than £380 for every household. Frankly, I would like to have seen even greater priority and emphasis in the work programme for that potentially transformative deal. I would also like other ongoing negotiations to have been mentioned, such as those on an EU-Japan free trade agreement, which we estimate could be worth £5 billion a year for the United Kingdom.
The Government also welcome the objectives of the telecoms package and the other measures in the work programme that would contribute towards the completion of the digital single market. For the EU to remain competitive, the single market needs to keep pace with developments in the digital economy. The digital economy is not only helping to connect, inform and entertain us, but driving innovation and growth across our economies.
Mr Douglas Carswell (Clacton) (Con)
The Minister talks about the need to deepen and complete the single market. At the same time he complains about excessive regulation. Does he not recognise that much of the excessive regulation has been brought in under the auspices of a single market, and that by extending and deepening it, he greatly expands the scope for excessive regulation, which produces economic stagnation?
Mr Lidington
I understand my hon. Friend’s argument, but—if I may say so—I think that he oversells his case. It is true that we can have European regulation, just as we can at national level, that is overly prescriptive, overly complicated and far too costly as far as business is concerned. Therefore, one of the tests that we have in mind when judging Commission proposals is whether in the first place the introduction of a single regulatory regime to govern a European single market would produce a net benefit for business, compared with the 28 different national regimes that would be eliminated as a consequence of a single European regulatory framework. Also, Ministers in this Government have argued repeatedly that we think the Commission could make more use of the principle of mutual recognition, which after all was made clear in the jurisprudence of the European Court of Justice some decades ago in the Cassis de Dijon case, rather than relying all the time on the detailed harmonisation of national arrangements, which can easily lead one into the sort of overly complicated system that my hon. Friend fears.
Andrea Leadsom
Does my right hon. Friend agree that completing the single market for services is so important for jobs and growth across the EU that we should be seriously considering whether those countries that want to proceed should continue under enhanced co-operation, leaving behind those counties, such as Germany, that are far less willing to open their markets for services to other successful counties, such as Britain?
Mr Lidington
Although my first preference would be a successful negotiation that would deliver a thoroughgoing single market in services across the whole European Union, if that ends up not being possible, my hon. Friend’s point about ending up with those countries that are willing to commit themselves to earlier and faster liberalisation doing so under enhanced co-operation is a very strong one indeed.
Mr Lidington
No, I will not give way to the hon. Gentleman again.
Securing investment in Europe’s energy infrastructure is critical to our long-term, sustainable economic growth. A cost-effective, flexible and ambitious 2030 climate and energy framework will provide clear and stable conditions for the up to €1 trillion of investment that European countries will require in the energy sector over the next 10 years. If designed in the right way, such a framework would complement domestic reforms here to ensure that the investment is forthcoming.
As has already been said in interventions, reducing the regulatory burdens on business is integral to boosting economic growth. The Commission’s REFIT—regulatory fitness and performance—programme was a welcome step towards reducing the burden of EU regulation on business and eliminating those barriers to growth, but we believe that the Commission needs to be more ambitious still to ensure that businesses feel real change.
Jacob Rees-Mogg (North East Somerset) (Con)
I remind the Minister that the REFIT programme includes proposals for the harmonising of VAT and the introduction of a common corporation tax base, both of which Her Majesty’s Government oppose. It is not about deregulating; it is about increasing the power of the European Union.
Mr Lidington
There will indeed be measures in the REFIT package, as in other Commission proposals, with which we disagree. We have made it clear that we will continue to resist both the proposals to which my hon. Friend alludes.
It is also fair to say, though, that at a time when the Government are urging the Commission to act on the recommendations of the Prime Minister’s EU business taskforce, the Commission has already introduced some measures that implement what this Government, either off their own bat or by means of the business taskforce report, have been recommending. We have seen practical and proportionate rules on country of origin labelling for food and a member state agreement to a streamlined approach to the clinical trials regulation, with formal agreement due later this year. In addition, the Commission has committed itself to withdrawing the access to justice in environmental matters directive, as the business taskforce explicitly called on it to do.
We now want further action on the 30 specific recommendations in the business taskforce’s report, including on the REACH—registration, evaluation and authorisation of chemicals—directive to lessen its burden on small and medium-sized enterprises, in particular. Such radical, business-friendly reform is in the interests of job creation and business growth not just here in the United Kingdom but throughout the continent as a whole. We welcome the Commission’s commitment not to table new health and safety rules for hairdressers or to introduce new rules on ergonomics, and its commitment to withdraw a number of other proposals that we have long opposed on the grounds that they would impose unnecessary costs on business.
However, with regard to the REFIT package, it is disappointing that the majority of the repeals and withdrawals in the work programme relate to obsolete measures. We think that future withdrawals should focus on EU measures that impose the biggest burdens on businesses and do not deliver significant and commensurate benefits. We will not only continue to press this with the Commission but look for every opportunity to build alliances with other EU member states and, for that matter, with enlightened and supportive members in the European Parliament such as our colleague Mr Malcolm Harbour, to ensure that the efforts to drive down business costs and increase the competiveness of European businesses are maintained.
Mr Lidington
I will give way to the hon. Gentleman and then I am going to make progress because I have been speaking for quite a long time.
Wayne David
When the Minister says that aspects of the EU work programme are disappointing, does he not really mean that the Government have failed to influence the Commission successfully?
Mr Lidington
No. I do not think that any member state would be able to say that it unreservedly welcomes and endorses, absolutely everything in the Commission’s work programme. Of the measures described in the work programme, there are some that we positively welcome, others where we think the proposal seems okay at first sight but we very much want to examine the detail of the promised measure before we come to a final conclusion, and others where we are quite open in saying that we think the Commission’s suggestion is mistaken. As I said to my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith), we have already expressed considerable concerns about the data protection package, and we will continue to negotiate to try to ensure that it does not over-burden business while providing adequate protection for personal data.
Nor can we welcome the draft regulation to establish a European public prosecutor’s office. We believe that the Commission’s evidence for this proposal is weak, and we will continue to challenge it on its unacceptable, rather summary response to the yellow card that national Parliaments raised about it.
Mr Lidington
I give way to my hon. Friend, who follows this issue very closely.
Mr Clappison
My right hon. Friend is making an excellent point. Will he convey to the Commission how deeply disappointing it is for Parliaments to gather the requisite number of signatures for petitions from individual Chambers and for the Commission then peremptorily to say that it will go ahead all the same? That is very dispiriting for Parliaments.
Mr Lidington
I completely agree. It would be easier to accept the Commission’s unwelcome decision if, at the very least, it had produced a detailed explanation of its reasons and showed proper respect for the 19 different reasoned opinions. I continue to agree with my hon. Friend that the proposal is wrong, but I made it very clear at the last meeting of the General Affairs Council that I regarded the Commission’s behaviour on the measure as unacceptable, and I was pleased that Ministers from some other member states then spoke out and endorsed my criticisms of its approach.
The House will be aware that tomorrow marks a year since the Prime Minister’s speech setting out a vision for European Union reform. Today, there is growing support across Europe for reform and for accepting that it needs to become more competitive and democratic, so that it is a Europe in which, to quote the Dutch Government, our enterprise is based on being
“European where necessary, national where possible.”
As I said last week at the very stimulating conference organised by Open Europe and the Fresh Start group, we will get behind the proposal made by the Dutch Foreign Minister, Frans Timmermans, for a governance manifesto for the new Commission—agreed by the 28 accountable national Heads of State and Government—that lays out what Europe should focus on and, crucially, what should be left to member states. On the new items in the work programme, the House can be assured that we will be vigilant in relation to the subsidiarity principle and do our utmost to ensure that action is taken at EU level only when that is the correct level to take proposals forward.
We already work with partners across Europe to deliver concrete changes that benefit this country and every EU member state, including the first ever cut in the EU’s seven-year budget, which protects the British rebate; agreement on a single European patent after 23 years of negotiation, which safeguards the intellectual property of innovative British businesses; keeping the UK out of any eurozone bail-out facility, which safeguards British interests; and abolishing the obscene policy of discarding caught fish, which is a key element of wholesale reform of the common fisheries policy. It can therefore be done: reform is possible and it is happening. However, the Government recognise that there is much more still to do to make Europe more flexible, competitive and democratically accountable. Ministers will use every opportunity to push forward that agenda.
Mr William Cash (Stone) (Con)
Having listened to what the hon. Member for Glasgow North East (Mr Bain) has just said, I think he really needs to take into account the fact that we have a Queen’s Speech every year at about the time the work programme comes out. That Queen’s Speech is put forward on behalf of an elected Government; it contains Government proposals that come from a democratic process. We are discussing a work programme that comes from an unelected bureaucratic organisation that lays out its priorities and expects people to respond to them. There is a serious difference in character between the two. Many of the proposals in the work programme—some of which are not legislative proposals but initiatives—are brought into effect by regulation or directive.
The proposals in the Queen’s Speech, being democratically driven and debated in the House, are brought into effect by Bills of Parliament. Those Bills have Second Readings, they are amended and they have a Report stage. They go through both Houses of Parliament. However, a single paragraph in a regulation or directive could have the most profound effect on us in this country. The provision would almost certainly be driven through by a qualified majority vote. That could involve our being pushed into a consensus or being outvoted; it could also involve a co-decision with the European Parliament. We have less and less control over what goes on.
The Commission programme is, as a matter of principle, based on undemocratic systems. That is why the European Scrutiny Committee report, which has received quite a lot of attention recently, has put forward proposals relating to those provisions that could, in the national interest, be considered for disapplication or—in the case of the proposals that we do not want—subjected to a veto.
In regard to the Minister’s opening remarks, I should point out that the Government are resolutely against several provisions in the work programme, including those relating to the European public prosecutor’s office, and to the single resolution mechanism, in which we will not participate. That Government also oppose the provisions on free movement rights, to which they will not subscribe, and to those relating to the European anti-fraud office. All those matters will still be produced by the work programme, however, and we will be unable to prevent them from happening. The hon. Member for Glasgow North East is perfectly entitled to say that he would like to have the single resolution mechanism—in fact, I recall him saying that he thought we should have it. However, I can assure him that that is not the view in the City of London, and it is not the view of many people who have a great deal of knowledge of these matters.
A serious constitutional question lies in the difference between the Commission work programme and legislation that originates in this House, based on manifestos. The work programme is completely different in character and consequence for the voters we represent, in a way that is profoundly undemocratic. That is point No. 1. As Chairman of the European Scrutiny Committee, I know that our job is to look at all these matters—and point No. 2 is that we do. We do that diligently throughout the year. Let us leave aside the disapplication and veto matters to which I have just referred. When I was in Brussels yesterday, I was told by very senior members of other national assemblies, “We would give our intense support to anything that would enable us in our own countries to have flexibility to prevent the imposition of legislation on banking union and so on.” Their list is endless, but they just cannot do it because of the way their constitutions are tied in. Our report recommends that the departmental Select Committees could be brought in to make assessments—
Mr Cash
I am glad to see the Minister nodding, because we believe our constructive suggestion will help to make more sense of the proposals in this work programme. Not only would each Select Committee have a rapporteur who is a specialist in European matters, if that were agreed by the House, the Procedure Committee, the Liaison Committee and so on, but the generality of departmental Select Committees would consider whether they wanted to prioritise proposals that came out of the work programme and make their own political judgment on whether they thought it was in the interests of the United Kingdom to go along with those proposals. They might even absorb some of the ideas and say they were good. The bottom line is that there should be a proper democratic discussion about it all, as that would be very helpful.
The Minister has referred to a number of initiatives, but I wish to say one thing about the repeal of legislation. This relates to actions under the regulatory fitness and performance—REFIT—programme where we must be realistic. There is far too much of a burden on British business and, indeed, on businesses in the European Union as a whole. I hear that view from all my colleagues in the other national Parliaments when I visit them. I shall be going back to see them in Athens this weekend, having just come back from Brussels. They all say the same thing: they want small businesses to be much more effective; they want more opportunities for entrepreneurship; they want to have more free trade; and they want there to be the opportunity to make money, so that the taxation can be provided for public expenditure. If not, they find that they have terrible problems with their economises.
Finally, we must all be very pleased about today’s employment figures. It is a great tribute to the Government that we have seen this dramatic increase in employment. I just add, however, that a great deal of it comes from our expansion of non-EU trade. We see that in the premium selling points of Jaguar Land Rover and the companies where the money is really being made internationally. We have a deficit on current account transactions, trade and services, and imports and exports—the golden criteria. On that principle, we run a deficit with the other 27 member states of £49 billion a year. We had a surplus in the figures for the last accounts of £12 billion, but the figures for the two quarters for the beginning of the next projected flow are £5.6 billion and £6.1 billion. If that continues, as I think it will, by the end of this year we could find that, in one year, business, with the assistance of the Government—I give them credit for this, because they have been listening—will have doubled our non-EU surplus with the rest of the world. That is where the machinery for more employment and the drive for prosperity for this country will come from, which is why I am so pleased to have the opportunity to congratulate the Government on the figures. At the same time, I issue one small word of caution: we should not put all our eggs in the European basket.