European Union Bill

Lord Waddington Excerpts

Tuesday 26th April 2011 Lords Chamber

[Lord Liddle]

This is a similar amendment, which is an attempt to insert in Clause 4(1)(j) an exception of where a conferral of powers would strengthen the ability of the European Commission to enforce European Union competition, state aid and single market rules. Why move this? This is a clear national interest. The Prime Minister has just produced a great glossy booklet about the single market, which he has sent around the chancelleries of Europe to convince his partners that Britain is fully engaged in the European Union. It is a central interest of the United Kingdom. We face a constant complaint that there is, in practice, a lack of a level playing field within the European Union. To enforce the single market, we are largely dependent on the ability and strength of the European Commission in enforcing its rules. I am not saying that immediate changes to those rules are required, but we should have the flexibility, again, to look in a positive light if proposals are made. Again, these are not fundamental issues that involve transfers of powers. These are issues where action could well be in the British national interest, giving us something we want: a deeper, more integrated single market that is good for British business.

We all know that there are areas of the single market where action is much needed. The services directive has been passed; how will it be enforced? The Commission says that it will act. What will be the result when it tries, and what conclusions will be drawn from that? We do not know at this stage. We should be open to seeing what might have to be done to make the services directive effective. Similarly, on the Commission’s competition powers, I should like to see a more proactive European Commission in enforcing competition. However, we do not know whether the existing procedures will prove adequate to the purpose. On state aid, again, there is a very difficult balance to be struck between too much interference in the minutiae of state aid—activities by member states that should not go anywhere near Brussels—and the need to create a level playing field for the future. All I am saying here is that there are issues that might, in future, require us to accept changes. We should be open to that, rather than ruling them out. That is why I beg to move this amendment.

[Lord Waddington]

Surely there is a point to be made with regard to this amendment, which could have been made with equal force about the previous amendment. It is not a mere drafting point. You may have a conferral of power that strengthens the ability of the European Commission to enforce European Union competitive state aid and single market rules, but also has other very serious consequences. This is just one of the examples where you have to be very careful to make sure that one power is not used for a different purpose. It is plain—and not just a question of bad draftsmanship—that if you were to do this, you would allow the conferral of a power that did a lot of mischief as well as the things that the noble Lord rightly wants to see done.

[Lord Davies of Stamford]

My Lords, I support my noble friend’s amendment but let me first deal with the point that the noble Lord, Lord Waddington, has made. It is clear that any powers can be abused, and it is clear that any suggestion that powers should be changed or extended in any way should be the subject of lively debate among member states in the Council of Ministers, as has always been the case. Only when we are satisfied that something is in our national interest should we consent to any proposal from the Commission or anybody else. That is how the European Union has always been conducted and, I trust, always will be conducted. I do not think the fact that a power can always be abused is a reason for not providing for the possibility that we might need to adopt it or to grant it to the European Union.

As my noble friend said in introducing the amendment, the inspiration for this amendment is similar to that which led to the previous one. I rise to speak particularly on this amendment because it deals with the single market. That is an area where I always thought that there existed an all-party consensus—this was true until very recently—that a positive, what you might call forward, policy on the single market was in the interests of this country. Indeed, I remember a time when the Tory party took enormous pride in having created the single market under Lord Cockfield and Jacques Delors who, with the strong support of Margaret Thatcher, brought through those 300 directives and created a single market. When I entered the House of Commons as a Conservative, as the House knows, we all felt—I felt this, as did most of my Conservative colleagues—a great sense of pride that this was a great Conservative achievement. Now we have a situation in which the Tory-dominated coalition Government are trying to bring an end to this forward policy. When I say “forward policy” what I mean is an acceptance in principle that the best way we are likely to be able to achieve our national purposes in the single market area is by according strong regulation-making and enforcement powers to an objective central authority—in this case the European Commission but also the European Court of Justice.

The noble Lord, Lord Kerr, reminded us a few moments ago that in the 1980s among the Conservative achievements in this area was to successfully override the opposition of other member states to, and then to implement, new enforcement powers for the European Court of Justice, including the very memorable historic move forward at that time of introducing the concept of fines on member states. It is extraordinary that in the course of 20 years—this has been part of the agony of my political life—the Conservative Party has done a complete somersault on this.

In referring to the Conservative Party, I can anticipate the remarks that the noble Lord, Lord Wallace, might make when he sums up, following what he said on the previous amendment. I recognise that the Lib Dems are very uncomfortable with this process. As I know him well, I recognise that the noble Lord, Lord Wallace, will have played the most positive part he could in trying to prevent complete extremists and head-bangers setting out the agenda that was to be adopted by the coalition Government. Indeed, the Lib Dems saw off the threat of repatriation of powers, which has been a very strong demand by a great majority in the Conservative Party for far too many years. Of course, that is splendid. I understand what the noble Lord, Lord Wallace, is really saying to us: namely, that they tried their best and could not do any better and therefore they ended up with a compromise, a kind of stalemate, between Conservative Eurosceptic extremism and Lib Dem pragmatism, if you like. That is where we are.

I say to the noble Lord, Lord Wallace, that we all understand the dramas in his party and in the coalition but that is not a good basis for legislation. We should be trying to legislate as far as we possibly can on the basis of a dispassionate analysis of the country’s interests. I do not believe that the country’s interests have changed in the area of the single market at all since the 1980s when, as I say, the Conservative Party took the lead in creating what we now call the single market, and a fine achievement it was. Should we say that we have certain powers which should be used—that is correct and I quite agree with that—and that we should exclude the idea that any new powers may be needed? However, life is not like that. Life always presents you with new challenges, difficulties and unexpected problems that you cannot possibly anticipate.

I am not brilliant enough to anticipate what might happen but of course there could be financial scams and major problems requiring new legislation or regulation. Big threats could arise to competition in some areas which may show up the inadequacy of our present competition powers. Problems could arise in implementing the single market. It may be shown that the one reason why we have so far failed to implement the single market in the energy area is because our powers are inadequate and therefore it might be necessary to take more powers. I am not suggesting that we should take more powers and I am certainly not clever enough to anticipate in what hypothetical circumstances we might need them. I am simply saying that—I think that we are saying this on this side of the House generally—it would be very stupid to exclude ab initio the possibility that we might need to develop the portfolio of powers that we currently have to try to build up and nurture a successful single market and to assume that all the problems that we face exist now and have revealed themselves once and for all and that there will be no surprises in the future. That is not a realistic way of conducting the nation’s business; it is certainly not a way one would ever conduct a private business, of course not. One would know that what was needed, to use my noble friend’s term, was the flexibility to respond to the unexpected. That will never cease; as long as human history continues we shall always need to do that. And here we are depriving ourselves of that flexibility, let there be no doubt about it.

Of course the Eurosceptics on both sides of the Chamber will say that the Government will not have a referendum because it might be lost. Well, a referendum may be lost or gained but it is quite clear to me—I made this argument at Second Reading and I believe it firmly—that in most cases a Minister will be deterred from getting into the position where there might be even some legal doubt about whether an action or decision by him could trigger one. It would be the end of a Minister’s career to come back from Brussels to be told by his legal advisers a few days later that what he had agreed to would require a referendum. The Prime Minister would sack him on the spot. No Prime Minister wants a referendum suddenly landed on him.

Irrespective of what the British nation might feel or whether the great public expect to be asked by us to do all the homework, to read the documents, to come to a substantive decision on technical issues, the very fact that a referendum could be triggered under the regime the Government propose with this Bill will act as a total deterrent and a total freeze on any flexibility at all. So, from having led the way on the single market with an imaginative, forward-looking and enterprising approach, sadly after a generation we are now, substantially under the leadership of the party that more than any other in Europe should be given credit for the single market, producing a situation in which, by definition, we cannot be part of any change however sensible because, irrationally and substantively, a referendum is clearly a political impossibility. It is certainly an impossibility if it is on a technical matter which might be considered to be rather minor by the British electorate. As politicians in this House, we all know that is the truth.

That is what we are letting ourselves into if we pass this Bill, unless we do so with the kind of amendments which my noble friend has introduced to bring a little bit more reality and realism and a sense of the way the world is into its operation. I therefore wholeheartedly support my noble friend. I hope that, if this amendment is not pressed now, we shall get into serious business at Report stage and that we manage to change the Bill into a more sensible direction along the lines he has proposed.

--- Later in debate ---

[Baroness Falkner of Margravine]

Perhaps I may ask for the patience of the Committee for a moment so that I may respond on that very valuable clarification. If it were in the UK’s national interest to pursue the options of the changes proposed, would we not, in the event that there had to be a referendum, expect the British Government to fully support the referendum?

[Lord Waddington]

Surely we are entitled to ask the noble Lord for an explanation as to why the Opposition sought an arrangement whereby the last two amendments were debated separately. The noble Lord has used exactly the same arguments for both amendments and therefore he has wasted a great deal of time. I think that there should be some explanation as to why, when the original grouping put together Amendments 20ZA and 20ZB, we have ended up debating them separately and precisely the same arguments have been advanced by the noble Lord on both amendments.

[Lord Risby]

My Lords, essentially the amendments deal with the removal of a referendum provision in three areas which are in our vital national interest—something on which we all agree—namely, the single market, EU competition and state aid. Of course, these are areas where the EU should concentrate, particularly the single market, which is indeed in our national interest. However, this is all possible under the existing treaties and, if sensible actions are taken under the existing treaties, there can be no possible objection to this, and the Bill does not prevent this happening. That is the essential difference and I think that there is some misunderstanding. The Bill does not prevent EU action where the treaties allow it. It is only in areas where a judgment would impact on us seriously that a treaty change might be required, and in those circumstances we would come back to the issue of whether or not to have a referendum. In this House we all agree about the importance of the single market. If, for example, there was a proposal concerning the labour market that could have an impact on this country by undoing much of the trade union and employment law reform, that would have an enormous impact not only on this country but on the entire European Union. In those circumstances, it would be absolutely legitimate to consider the possibility of a referendum.

Finally, in a very interesting speech, the noble Lord, Lord Mandelson—and I am sorry that he is not here—made the point that so far as he could make out the coalition Government were being entirely pragmatic. All the discussions that I have had with others have indicated that our member state friends—officials and politicians—would agree with that. Quite frankly, it is in the context of trying to defuse the difficulty in this country towards the European Union that this proposal is made. In that context, it is important in very specific circumstances affecting our national interest, including the single market, that an option is available for a referendum, although it does not necessarily have to be used because it is covered under the existing treaties.