Lord Davies of Stamford
Main Page: Lord Davies of Stamford (Labour - Life peer)European Union Bill
Lord Davies of Stamford Excerpts
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.
Lord Flight
My Lords, it seems perhaps surprising but state aid is yet another area where powers granted to the EU have exceeded themselves. Noble Lords will have been aware that, in the recent Budget, the Government quite rightly wished to provide additional support for small companies and to widen the EIS to do that because the equity funding gap is up to £10 million. This has been limited because the state aid rules, which were rightly intended to stop unfair massive state subsidy of uncompetitive industries, have been used to decree that you fall foul if there are any sort of tax incentives to companies with more than 50 employees or those raising more than £2 million per annum. This ridiculous intrusion into the economic life of this country has been put in under the guise of state aid, so the Government have rightly said “We are going to go back and renegotiate this”. However, instead of being able to put in the financial support when it is needed—when the economy is on its back as a result of the last Government’s failures—we have to wait another year to try to negotiate to widen these issues.
I have some sympathy with what the noble Lord has said in principle but, when it comes to experience, the last thing I want to see is any more state aid powers.
Lord Davies of Stamford
I had thought to myself, “Dear oh dear”; when the noble Lord and I were colleagues in the Conservative Party a generation ago, we would have both been arguing against state aids on the basis that they were always distortionary, and the European Union was a wonderful way of getting away from the completely self-destructive bidding war that all nations are inclined to get into, in terms of providing some sort of subsidy or other for their industries on whatever political or other grounds or the fashionable economic doctrines that might be in vogue at the time.
However, I repeat my main point that we do not need to get into a discussion on the theory of state aids or their substantive costs or risks, because the assumption has always been—and the way that the issue has always worked has been—that European Union member states have held robust discussions between them on these matters. We have never signed up to anything that we did not agree to. All that I and Members on this side of the House want to achieve is for us to continue to be able, when we think that it is in the national interest, to go along with some agreement for new, extended or slightly modified powers. That is all. There is no suggestion that in advance we would necessarily agree to anything of that kind—that would be utterly unrealistic—but we need to maintain flexibility. The noble Lord is a very considerable and successful businessman, and in the conduct of his own business he would not adopt the policy he is now suggesting for the nation. You must never exclude the need to be able to respond to new problems as they arise. That is all we are asking for.
Lord Flight
I am sure that all noble Lords would agree with the basic reason for opposing state aid, as the noble Lord and I did some time ago. My point is simply that the state aid rules have already ended up being interpreted in a fashion that is manifestly not economically sensible. They are damaging the economic interests of this country and, not surprisingly, I would very much like there to be a check on the ability of state aid rules to be yet further misapplied.
Lord Wallace of Saltaire
We are not necessarily on a very tight deadline, but it is customary to move towards a close. However, I was speaking. I thought that the noble Lord was trying to intervene and gave way to him as an intervention. We clearly misunderstood where we were.
I was saying that, speaking in another place, David Miliband also said in November 2009:
“The Lisbon Treaty provides the Union with a stable and lasting institutional framework. We expect no change in the foreseeable future, so that the Union will be able to fully concentrate on addressing the concrete challenges ahead”.—[Official Report, Commons, 23/11/09; col. 273.]
I agree with those pragmatic, practical sentences. We all recognise that there are differences of view within all parties about European matters. The noble Lord, Lord Davies of Stamford, has moved from one party with a very wide range of views on European integration to another, as he well knows. I shall not respond further to his slightly hobnail-booted references to relations within the current coalition.
Lord Davies of Stamford
The great joy for me is that, for the first time in many, many years, I find myself in agreement with those on my Front Bench. I assure noble Lords that that makes a great deal of difference.
Lord Wallace of Saltaire
I return to where we were on the amendment, as on some of the others that follow. Here we have a Government who are playing a positive and practical part within the EU within its existing, but considerably expanded, competences. I have looked at Articles 102 to 106 and Articles 114 and 116. I totally failed to find the relevance of Article 308, which, in my copy of the treaty, is about the European Investment Bank, but perhaps when we get to debate on Article 41, the noble Lord, Lord Pearson of Rannoch, will tell us what that is all about.