EU: Recent Developments

Debate between Lord Howell of Guildford and Lord Ryder of Wensum

Thursday 16th February 2012 Lords Chamber

[Lord Howell of Guildford]

Not necessarily. I would like to give a straightforward answer to the noble Lord, who follows these things, but there are a number of qualifications and details that I want to come to in my speech. I have tried to set them out most carefully because I know your Lordships’ detailed interested in them.

I was saying that to have incorporated the changes in the intergovernmental agreement, the fiscal union agreement, into the EU treaties now without the proper safeguards, which would have been the effect of signing in December, if my right honourable friend had gone ahead with it, would have risked changing the character of the European Union profoundly. It would have strengthened the euro area, but without corresponding balancing measures to maintain the integrity of the single market at 27. I shall come to the nature of those safeguards in more detail and why we felt they were not present.

As a result of the December meeting, eurozone countries and others are making separate arrangements outside the treaties for strengthening budgetary discipline, including by ensuring that there are much tougher rules on deficits. The Governments of 25 member states, so far, have indicated that they intend to sign up to the intergovernmental agreement reached in January.

This is a treaty outside the European Union. We are not signing it, we are not ratifying it and it places no obligations on the United Kingdom. It does not have the force of European Union law for us, European Union institutions or even the countries that have signed it. European Union legislation can be agreed only in the European Union Councils of Ministers, and we are a full member of them. There will be no inner group of European countries distorting the single market from inside the EU treaties. That is the protection that the Prime Minister secured in December, and that protection remains.

There has been much comment about the use of the European Union institutions, and I want to come to that. The new agreement sets out limited roles for the European Commission and the European Court of Justice. The legal implications are complicated and hinge upon how the agreement is implemented. It is for this reason that we have reserved our position.

We have been clear that we will not allow the institutions to be used in any way that would undermine the interests of the 27, in particular, the single market, and that we will insist that the EU institutions continue to work for all 27 nations of the European Union. Indeed, those institutions are established by the treaty, and that treaty is still protected. The intergovernmental agreement is absolutely clear that it cannot encroach on the competences of the EU and that measures cannot be taken which undermine the single market. As my right honourable friend the Prime Minister made clear to colleagues at the informal January European Council, we will be watching closely the implementation of this new intergovernmental treaty, and we are able to take action if our national interests are threatened.

We want to see a reformed and strengthened European Union better able to cope with the new international pattern of powers and influences. I agree with the comments that I read, made by the noble Lord, Lord Mandelson, that the EU model needs “dramatic reform”—I think those are his words—but we do not want to be part of a fiscal union. We do not want to be part of the eurozone, and we have made clear that the British people have a say before any further competence can be transferred to the European Union.

Having said that I agree with the noble Lord, Lord Mandelson, I slightly disagree with his suggestion that it is the European social model that should guide us, as I believe we should have confidence that we can develop potentially our own model, especially based on wider capital ownership, and wider ownership and distribution on a fair and balanced basis in our society, and that is what we should think in terms of.

Nevertheless, as I have said, it is in the UK’s interests that the eurozone sort out its problems. The UK’s attitude is supportive and constructive. We are involved in discussions on the implementation of this agreement and, as ever, in the machinery of building a prosperous and competitive Europe and a good single market. These remain our aims. The view that the only way to exert influence in the European Union is through surrendering more sovereignty and control to Brussels is, frankly, outdated.

The EU is not monolithic. It contains flexible arrangements such as the single currency and the Schengen agreement, and it is right that the European Union should have,

“the flexibility of a network, not the rigidity of a bloc”,

as my right honourable friend the Prime Minister said in his speech at the Guildhall last autumn. The UK is at the forefront of efforts in Brussels to develop our union according to this model, which we believe to be the right one.

Britain’s agenda in Europe is to promote growth, competitiveness and jobs. We have said repeatedly that the best way in which the European Union can drive growth and create jobs is to complete the single market, establish trade deals with the fastest growing parts of the world—which we are seeking to do on many fronts—and cut the regulatory burdens on business.

Last year the European Commission estimated that growth in the Union this year would be 0.6 per cent. The IMF now projects minus 0.1 per cent. Competitiveness remains Europe’s Achilles heel. More than half of EU member states are now less competitive than they were last year. It is essential that countries across Europe take bold action to recover their economic dynamism, get to grips with their debts, and secure growth and jobs for the future.

This is why the UK has been arguing for a pro-business agenda in Europe. We are pushing for the completion of the single market in services, where there are still 4,700 professions across Europe to which access is regulated by government, and in the digital area, where there are over a dozen separate copyright regimes. Together, these measures could add more than 6 per cent to European Union gross domestic product within 10 years.

We are also committed to reducing regulatory burdens, especially for small and medium-sized enterprises and microenterprises, and pushing forward a patent package to support innovation. This has been discussed in Europe for over 10 years and decisive progress is now at last being made.

We are also actively pushing for decisive action to get trade moving. We want 2012 to see significant movement on EU free trade agreements with major partners such as Japan—which has been going for many years—India, Canada and the United States. Completing all the deals currently on the table could add an estimated €90 billion to Europe’s GDP. An agreement between the EU and the US could have a bigger impact than all of these put together.

For countries outside the European Union, the UK remains the gateway to the largest single market in the world. Of the 1,200 Indian firms operating in the EU, over half have their headquarters in the UK. Britain is a world-class destination for international business, and the most attractive foreign direct investment destination in Europe, and remains so. Being outside the euro does not affect that.

My right honourable friend the Foreign Secretary has emphasised that we need to develop our commercial, economic and political presence in fast-growing, emerging markets. We certainly do. At the same time, Europe is our neighbourhood and our biggest market. It is full of innovation and potential for the future. More than 40 per cent of our exports go to EU eurozone member states—more of course to Europe as a whole. Trade with the EU allows us to specialise in what we produce best and to run trade surpluses with other countries, such as the US and Australia. Our aim is to use this position to expand our exports to fast-growing markets in addition to our existing exports—not as an alternative or instead of them but, I repeat, in addition.

The Commonwealth is one such area. It is one of the great networks of the future. It provides a gateway to many of the great, new markets. It includes some of the world’s fastest-growing economies, with members showing democratic values and similar legal and accounting systems. These provide solid foundations for doing expanding business and a platform for trade, investment, development and, in turn, prosperity. Trade within the Commonwealth totals more than—

[Lord Ryder of Wensum]

I am very grateful to my noble friend for giving way. In light of all the wonderful objectives that my noble friend is setting out in his speech about British exports and how Britain is poised to gain even greater advantages in world markets, how does he explain the fact that the British Government barely opposed the clinical trials directive that is having considerable cost on our most successful manufacturing industry, the pharmaceutical industry, which brings in about £3 billion a year surplus on our balance of payments? Yet here we are in Britain with our pharmaceutical industries losing ground in terms of clinical trials to China and India. Ultimately, that will incredibly damage the British economy.

[Lord Howell of Guildford]

My noble friend puts forward one of the many challenges that we have to address. I will not go into the full details at this stage, but he is right; there are several areas where the challenges are very great for the whole of Europe, including this country, from the rising power of the great emerging markets. We have to face the fact that, as I began by saying, the world’s pattern of wealth and competitiveness has changed radically over the past five years. I am not sure that many people in the media or, dare I say, some of our great policy thinkers have always grasped this fact.

The changes that we are making provide solid foundations for doing business and a platform for trade, investment and development, which in turn will be the prosperity, or perhaps I should say in a more realistic tone the survival and maintenance, of our existing standards. Trade within the Commonwealth totals more than $3 trillion annually. Our European membership is very valuable in promoting trade interests and access to new markets such as these.

The UK continues to play a strong role in achieving collective European action on many foreign policy issues, when appropriate and effective, in order to advance our shared interests and values. We drove concerted action forward at the EU level in response to Libya. The EU was actively engaged since the early stages of the conflict and we secured a UN resolution and assembled a multinational coalition force faster than at any time in history. Today, we are playing a prominent role in the EU response to the continuing violence in Syria. Some 11 rounds of EU sanctions have already been agreed and we hope to agree further measures on 27 February at the Foreign Affairs Council.

We have been at the forefront of action on Iran where, along with France, we led the EU in agreeing an unprecedented package of sanctions. The UK continues to be a strong supporter of European Union enlargement, which helps to create stability, security and prosperity. Enlargement brings significant benefits for the United Kingdom. An enlarged market obviously expands the opportunities for trade and investment. We want European nations to succeed not just as an economic force but as an association of countries with the political will, when they wish to mobilise it, and the values and the voice to use their collective weight to make a difference in the world.

Looking ahead to the March European Council, the UK will focus on ensuring that EU initiatives and projects deliver growth and jobs as agreed at the January Council. The UK plays an important role in these and other issues of significance for the Union as a whole. We are driving forward the single market, we are improving competitiveness across Europe and we are leading decisive foreign policy action when collective action works. European eurozone members are often our closest allies on some of these issues. Britain is part of the European Union not by default but by choice. It does reflect our national interest to be part of a single market on our doorstep and we have no intention whatever of walking away.

We want Europe to be a success, and not just for parochial reasons. We are going through a fundamental rebalancing of global power, a point I have just made to my noble friend, as economic weight shifts from west to east and from north to south; some of us have been pointing this out for two decades. Political power is diffusing from the G7 to the G20 and beyond, and from global groupings of states to regional groupings such as the Arab League, the African Union, ASEAN and many others.

International Democracy Day

Debate between Lord Howell of Guildford and Lord Ryder of Wensum

Wednesday 14th September 2011 Lords Chamber

[Lord Howell of Guildford]

I am indeed aware of the IPU, which does excellent and valuable work. It reinforces the causes and activities not only of Governments but of all kinds of organisations, non-governmental and governmental, in promoting democratic values.

[Lord Ryder of Wensum]

My Lords, in view of the fact that every piece of legislation which comes to your Lordships' House has been automatically guillotined in the other place, can my noble friend and his right honourable friend the Foreign Secretary spend a little of democracy day trying to persuade their colleagues to stop this miserable practice in the interests of better Parliament and for the sake of true democracy, to which I gather from my noble friend’s reply the Foreign Secretary clearly adheres?

[Lord Howell of Guildford]

I am asked whether I can comment on that. I can’t and, in fact, I won’t, because these are matters not only for usual channels but for managers of business in both Houses. I add a general point: I think that it was Mr Churchill who said that democracy was the worst system except all others. It is certainly not perfect; it can be constantly improved. We try in both our Houses to do that, but how it should be done is not for me to advise.

European Council and North Africa

Debate between Lord Howell of Guildford and Lord Ryder of Wensum

Monday 7th February 2011 Lords Chamber

[Lord Howell of Guildford]

On the question of co-ordination with the United States, my honourable and right honourable friends, both in the Foreign and Commonwealth Office and, obviously, in the Government as a whole, are in constant contact at all levels with United States officials. It would be naive, however, to stand at the Dispatch Box and pretend that these huge upheavals and events do not present to policy-makers and experts, no doubt in Washington and other capitals, something of a dilemma.

The pattern of the past produced a sort of stability, but it was the kind of stability that could be upset at every moment, as it was. The combustible materials were there; it was a question of when someone threw in a match. That is what happened in Cairo. That raises for the most balanced and clear-thinking people a dilemma as to whether the new pattern is going to improve on the old pattern or, indeed, where the new pattern will take us. We all know the adage about revolutions devouring their own children. They can turn into an opportunity to be seized for the good, as my right honourable friend the Foreign Secretary was rightly saying the other morning, or they can slide away in an unpredictable series of sequences, like the French Revolution, to which I referred earlier.

It is hard to answer the noble Lord, Lord Anderson, about how we and the Americans can be totally accurate in our predictions and the certainty of where to go. It is very difficult. We are monitoring and watching the situation very carefully, as are the Americans. We are reinforcing our concern in this nation and the American concern in their nation for liberty and freedom and the basic principles of civilised existence. We are hoping that these patterns will be reflected in whatever emerges in Egypt and, indeed, in other turbulent political scenes in the region. There is no guarantee or certainty, however, and this must be realistically and reasonably understood.

As for the pattern of power deployment inside Egypt and whether Omar Suleiman is now taking the reins, I do not think that I can comment beyond what we have all read in the newspapers. Mr Mubarak clearly wants to stay a few more months. He has appointed Omar Suleiman to take the lead in these negotiations. It is right that our leaders should contact him to understand as much as we can of how he sees the situation. This must be a dialogue that will, I hope, develop further in the future as we see what path these discussions take and what part the Muslim Brotherhood leadership and other political forces in Egypt play in them. This is really, for us, a matter to hope about rather than a matter in any way to interfere with. This is for Egypt to decide.

[Lord Ryder of Wensum]

My Lords, I refer to the energy section of the Statement. I hesitate to ask my noble friend this question in light of the fact that we have shared views on energy policy over many decades. The Prime Minister’s Statement sets out that 5 million extra jobs will be created over the next nine years, by 2020, by virtue of this new energy policy. On what basis and by what calculation does the Prime Minister reach this figure, bearing in mind that even the communiqué issued by the European Council did not state how many extra jobs would be created? Can my noble friend also explain to me on what basis the Prime Minister has worked out that there will be a reduction in the pressure on household bills by virtue of the policy that he has set out this afternoon, bearing in mind that the European Council did not discuss the financial dimensions of this policy? Indeed, the European Council last weekend was not permitted to discuss the financial dimensions of this policy. Perhaps I can help him. There is a document, which was not tabled at the Council but is being circulated within the Commission, that shows that the cost of this policy over the next years is €1 trillion. I ask my noble friend: who is to pay the €1 trillion for the energy policy that the Prime Minister has set out today claiming that 5 million extra jobs will be created and that household bills for energy will go down?

[Lord Howell of Guildford]

I am grateful to my noble friend for a series of near-impossible questions. These estimates are inevitably estimates. They are based on what one hopes is an unfolding sequence of policy, which leads first—and one must recognise this—to the incentives for fossil-fuel energies to be replaced by more efficient use of those same energies so that eventually higher bills become lower bills, and, secondly, to the replacement of fossil fuels in a number of areas by non-fossil alternatives and renewables. At this moment, my noble friend says, “Ah, but that means all renewables are far more expensive than fossils fuels”. At this moment, pound for pound and kilowatt hour for kilowatt hour, he may be right, but how is this going to evolve in future? The world is concerned about the high-carbon situation now and its effect on climate. The world is aiming for a low-carbon, greener world, and this Government are determined to move along that path to greener, cleaner energy and greater energy efficiency. That will lead in due course not to higher bills but to lower bills. I emphasise “in due course” because in the mean time, as he probably knows from receiving his monthly or quarterly energy bills, all our energy bills are looking a bit more expensive. We have to look through the present situation to a longer term where we can see new products and new patterns developing to support a low-carbon, secure, affordable energy pattern that would benefit not merely Europe and our own country but also the developing world, which, of course, has an enormous thirst for abundant but cheap and affordable energy.

BBC World Service

Debate between Lord Howell of Guildford and Lord Ryder of Wensum

Tuesday 13th July 2010 Lords Chamber

[Lord Howell of Guildford]

My Lords, it is possible that some of the BBC World Service activities can be categorised as overseas aid and could be supported by DfID. I know that matter is being looked at. The other problem for the BBC World Service is that, as the shortwave transmission systems tend to become outdated, it has to seek transfer on to FM systems with local co-operation of local stations around the world. I am afraid that all that costs money. The cuts in the past as the result of the fall in sterling were bitter and tough. The cuts under the 22 June restraints announced by the Chancellor are modest. For the future, I can only say that I totally share your Lordships’ view that this is an immensely valuable service. We will do our best to safeguard it but we are not ring-fenced.

[Lord Ryder of Wensum]

My Lords—

[Baroness Chalker of Wallasey]

My Lords, while understanding the need to make necessary cuts, as a former Development Minister I recommend that my noble friend has a serious talk with the Department for International Development. It is engaged in much valuable education work. That is also what the BBC World Service does. That should be a shared responsibility, not one falling solely upon the Foreign Office.