European Institutions

Lord Dodds of Duncairn Excerpts

Wednesday 7th September 2011 Westminster Hall

[Mr Lidington]

I am grateful to my hon. Friend for raising a subject to which I was planning to come in the next stage of my remarks. The Government are intent on working hard within Europe to deliver the kind of Europe that suits British interests and the British people, in the knowledge that we now have, for the first time, a proper guarantee that, if it is ever proposed to pass new competencies or powers from this country to Brussels, the British people will get a vote in a referendum. That guarantee is provided by the European Union Act 2011, which recently came into force. For the first time, British voters will have their rightful say over any further expansion of EU powers. I believe that that will put our participation in the EU on a sturdier and more democratic footing. If a new treaty amendment or a brand-new treaty were to be introduced that involved the transfer of further competencies or powers from this country to the European Union, that treaty or amendment would be caught by our new Act of Parliament, and a referendum would be required subsequent to primary legislation here so that the British people would have the final say over whether those powers were transferred to Brussels.

[Mr Nigel Dodds (Belfast North) (DUP)]

That is all very well, and it is welcome as far as the future is concerned, but is not the problem that, under the Lisbon treaty and other measures, far too much power has already been ceded to Brussels? What we need is to get some of it back. Should it not be the Government’s priority to use the current situation in Europe to negotiate the repatriation of powers to the British people? That is the key issue as we move forward.

[Mr Lidington]

As the right hon. Gentleman says, the Act is not a panacea, and I have never claimed that it would be. It does not address the repatriation of powers. That was not its purpose. Under the coalition agreement, the Government are committed to examining the existing balance of competencies and what they mean for Britain, and we continue to consider that issue. I appreciate that both he and my hon. Friend the Member for Witham would have liked the coalition agreement to commit us to returning important powers from the EU to the United Kingdom. During the 2010 general election, I stood on and campaigned for exactly the same manifesto as my hon. Friend did. I do not resile from anything to which I committed myself then, but we must abide by the political reality of the outcome of that election, which the British people delivered. The coalition agreement forms the basis for this Government’s policy.

My hon. Friend argued that ongoing negotiations on EU reform could be an opportunity to deliver a new EU agenda. The current problems in the eurozone were predictable—and, indeed, predicted, not least by British Conservatives—but that does not change the fact that, although we seek to expand British trade with the world’s emerging powers, 40% of it is still with the countries of the eurozone, so it is in our national interests that the eurozone countries prosper and find a way through their difficulties.

The economic logic of a monetary union, as British Conservatives have argued frequently, is greater fiscal and economic union, and we see some signs that the eurozone countries are moving in that direction. If they wish to do so, we should not stand in the way of their progress. If, at some stage in the future, moves towards greater fiscal union among the eurozone countries lead to a treaty, there will be an opportunity for the United Kingdom to ask, “What is in our national interest?” That is the approach that we took on the treaty change to establish a European stability mechanism for eurozone members. As the Prime Minister said, Britain would benefit from taking some powers back from Brussels. However, I caution my hon. Friend that although events are fast-moving and predictions risky, there is no sign of an immediate move towards such a treaty change. Treaty change is neither easy nor straightforward, and the eurozone countries know that, whatever the position in the United Kingdom, several countries, including the Netherlands, Denmark and Slovakia, have provision in their constitutional arrangements for referendums in some circumstances, so it would be a complicated matter. For that reason, I do not think that there is pressure at the moment to go down that road.

My hon. Friend raised more general points about the future of the eurozone. Although the Franco-German proposals appear to be a step in the right direction, we must consider the detail carefully. She is absolutely right that we should not let ourselves be sucked into the deeper fiscal integration on which the eurozone appears to be embarking. That is important to the Government.

On financial transaction taxes, clearly, unless such taxes applied to all financial centres globally, we would see a relocation of trading from centres where taxes apply to centres where they do not. Therefore, a financial transaction tax that applied only to European Union countries would be extraordinarily damaging for every financial centre in the EU, including the City of London. The Government are taking an active role in international discussions exploring financial sector taxation. The Chancellor of the Exchequer has made it clear on many occasions that he thinks that the idea of an EU-only financial transaction tax would be profoundly counter-productive and unwelcome.

My hon. Friend mentioned budgetary discipline and financial efficiency in Europe. Both are cornerstones of the Government’s policy towards the European Union. We want all institutions to ensure that their spending and activity produce genuine benefits for our citizens. We are taking firm action on the 2012 EU budget. Of course, the annual budgets of the European Union are ultimately determined by qualified majority voting. We do not have a right of veto. Although the current proposal for an increase of about 2% is greater than the British Government would have wished, it is still roughly equivalent to a real-terms freeze in that budget, and it is significantly less than the Commission’s original proposal of 4.9%. I also note that it is almost €8 billion less than the budget ceiling for 2011, which was agreed by the previous Labour Government in 2005. We will continue to work with other like-minded countries to get the very best deal possible for the taxpayer. I shall embark on a further stage of that work when I go to Brussels next Monday for the General Affairs Council.

--- Later in debate ---

[Mr Lidington]

The Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), is working hard to assemble a coalition of like-minded Ministers and is engaging with the Commission to seek to avoid the sort of damaging additional social regulation to which my hon. Friend rightly refers. We are also keeping a particularly close eye on the position of the working time directive. The Commission may come forward with new proposals in the next 12 months. Our priority will be to protect the opt-out, which is valuable to British competitiveness. If there also prove to be ways in which to mitigate or reverse the impact of the European Court of Justice judgments that defined time on call as working time we would seek to do that as well.

My hon. Friend the Member for Witham called for greater efficiency and the reduction of waste. I support her on that, as I do on her call for increased transparency over all the activity and detailed expenditure of the institutions. The more transparency we have over EU spending and the legislative process, the greater evidence we will find to support our arguments for improved efficiency and the reduction of waste. An important part of transparency is scrutiny, and I am keen to ensure that we do everything possible to make our own parliamentary scrutiny processes still more significant. It is a vital part of the democratic process and the Government are committed to ensuring that scrutiny committees can clear proposals before we agree to them at ministerial level.

My hon. Friend is right that the priority should be growth, competitiveness and jobs. That is where Europe should be focusing its energy and attention now. We are pushing for a further drive on the liberalisation of the single market, on breaking down barriers to trade, and on making European regulation less burdensome and expensive, especially for small and medium-sized enterprises, on which so many jobs throughout Europe, not just the United Kingdom, depend. We are determined to resist any gold-plating of European Union legislation.

My hon. Friend talked about the Council of Europe and prisoner voting. The Commons has given a clear view that prisoners should not have the vote. Indeed, my right hon. Friend the Prime Minister has echoed that call. The Government believe that it is right to consider the final judgment in the Italian case of Scoppola, as well as the wider legal context, before setting out the next steps on prisoner voting. I want those next steps to be as close as possible to the clearly expressed will of the House of Commons.

[Mr Dodds]

Will the Minister give way?