Justice and Security Bill [Lords]

William Cash Excerpts

Tuesday 18th December 2012 Commons Chamber

[Mr Clarke]

I keep giving way one last time, so, with apologies to my hon. Friend, let me turn to what I think is the subject matter of the serious debate that has been taking place since we consulted on the Green Paper.

It was our intention from the start to consult on the Green Paper. As what we are doing goes to the fundamentals of our legal system and our rule of law, we actively sought the widest possible support for what we are doing. Even before the Bill was introduced and before it went through the Lords, we narrowed its scope to make quite sure that CMPs could be made available only when disclosure of the material would be damaging to the interests of national security. Green Paper language that slightly implied that the police, Customs and Excise and all sorts of other people might start invoking them has gone completely away. We removed the Secretary of State’s power to extend the scope of the Bill by order, and excluded inquests after a campaign led by the Daily Mail got widespread support in this House. As I have already said, we never even contemplated that our proposals should cover criminal cases.

We also conceded—this is the key point, which I think we are still debating with most of the critics—very early on, after publishing the Green Paper, that the decision whether to allow a closed material procedure or not should be a matter for the judge and never for the Minister. That is an important principle and it is what most of the arguments, even about the JCHR’s amendments, are all about. We have all, I hope, now agreed that it is a judge’s decision whether or not to hold closed procedures. The question is how far we need to keep amending the Bill to clarify this and how we avoid unnecessary consequences if we overdo it. I shall return to that.

That is what most of the debate was about in the House of Lords and it is the point of the JCHR’s report. When it came to a Division in the House of Lords on the principle of closed material procedures, the Government had an enormous majority. The Labour party did not oppose the principles of CMP, even though it was a Back-Bench Labour amendment which the other place voted down. I trust that the Front-Bench Labour team and the right hon. Member for Tooting continue to be of that opinion. Unless his undoubted radical left-wing instincts have got the better of him, I do not think that is the position of any party in this House.

The concern of the House of Lords and of the JCHR was that the judge should have a real and substantive discretion about whether a CMP is necessary in any case. Many Members of the upper House made their support for CMPs contingent on changes being made to increase judicial discretion and ensure that it was clear on the face of the Bill that CMPs would be used only for a very small category of exceptional cases.

I begin by making it clear on behalf of the Government that I agree that the judge should have discretion. I agree that we should be talking about a small number of cases where any other process is impossible and it is necessary for it to be handled in this way. A strong and compelling case was made by those who argued that we ought to trust our judges to decide the right way to try the issues in any particular case. I agree. The debate—I suspect it will be the same debate today as it was in the House of Lords—starts from the fact that the Government’s case is that the Bill as it stood already accepted that principle. As we were defeated, we will consider what more we can do by way of reassurance. People are deeply suspicious of anything in this area and they are convinced that, despite what we put in the Bill, the judge will somehow be inhibited by what the Government propose to do.

Our judges are among the finest in the world. They are staunch defenders of the rule of law, and they have shown time and again that they can be trusted not to endanger the national security of this country. I know that they can be—

[Mr William Cash (Stone) (Con)]

Will my right hon. and learned Friend give way?

[Mr Clarke]

If it is on a British process, not a Strasbourg one.

[Mr Cash]

It is on the Law Lords themselves in the past and now the Supreme Court. Does my right hon. and learned Friend accept that there are divisions of opinion even at the highest level about the extent to which such decisions should ultimately be made by the most senior judges or Parliament, and that there are very senior judges who take the view that Parliament, not the judges, should decide these questions?

[Mr Clarke]

There are other occasions on which we shall no doubt debate parliamentary override of the courts of law. I realise that that is a matter dear to my hon. Friend’s heart. In the Duma it would be carried nem. con. The Russian Government would be utterly delighted to hear the principle of parliamentary override brought into our legal system in this country. I think the House of Commons should be hesitant. There may be senior judges who think that that should apply. The process that we are applying is different. The Government’s case is based on trusting the judges to use the discretion sensibly. That is what I think we should do, but of course I address seriously the views that were put forward.

I want to make it clear, to go back to what the right hon. and learned Member for North East Fife (Sir Menzies Campbell) asked me earlier, that the Government will not seek to overturn the most important amendment—the most important, in my opinion—made by the House of Lords that the court “may” rather than “must” order a closed material procedure upon an application. I do not see how we could give a wider discretion than that.

We will also accept that any party, not just the Government, should be able to ask for a closed material procedure. I think it highly unlikely that any plaintiff will be in any situation to start arguing that he wants to protect national security, but if people want that, they can have it. More importantly, the court of its own volition should be able to order a closed material procedure.

A further series of amendments were made which we still need to look at more closely. We have time to look at them closely and the others will be addressed by the Under-Secretary of State for the Home Department, my hon. Friend the Member for Old Bexley and Sidcup in Committee. We are not against the principle, but we are not sure that the amendments add anything. I shall give the reasons in a moment.

European Council

William Cash Excerpts

Monday 17th December 2012 Commons Chamber

[The Prime Minister]

Well, the jokes were better. The right hon. Gentleman has obviously spent a bit of time running through his old Police albums. Given his policy on Europe, I would recommend, “So Lonely”, and given his general approach to policy, he is going to have to get used to “I can’t stand losing”. [Interruption.] That was the best I could do given the notice. He should give me more warning next time—[Interruption.] Don’t stand so close to me—very good. The bed’s too big without you—[Laughter.] Let’s take this down.

On Syria, it is right to look at amending the arms embargo. We will be keeping the arms embargo on the regime. There are arguments on both sides, but we should have the debate and European Foreign Ministers will do so. My concern is that if the UK with others is not helping the opposition, and helping to shape and work with it, it is much more difficult to get the transition we all want to a peaceful, democratic Syria that respects the rights of minorities—including, as I have said, Christians—and human rights.

On banking union, the right hon. Gentleman rightly makes the point that the protections are set out when more than four members are outside the banking union. The new double majority voting is a big breakthrough. The idea that non-eurozone members should have a separate vote on proposals that could be damaging to us is a major breakthrough, and a lot of people said it would not be possible. If the number of countries outside the banking union falls below four, the issue returns to the European Council, where, of course, we decide things by consensus and would be able to put a stop to further progress.

The right hon. Gentleman makes his points on growth, but ignores completely that almost every country around the table has immense fiscal challenges and huge budget deficits. That is why we focus so much on the things that could help growth in Europe, such as the single market, free trade deals with other parts of the world, deregulation and getting costs down, and a good budget deal.

The right hon. Gentleman asked a series of questions on European positions. I do not think it is right to hold an immediate in/out referendum because neither of the two options is right. That is exactly what the Foreign Secretary has said.

On British business, the Conservative party and the Government are working to deliver all the things business has asked for. I note that, when the Opposition business spokesman was asked to name one single business that supported Labour, the best he could come up with was Waheed Alli, whom Labour ennobled about a decade ago.

On European policy, I will not take lectures from a party that signed up to the bail-out, gave away our veto and gave up the social chapter—on each occasion, it got absolutely nothing in return. That is the truth of the Labour policy, whereas the Conservative party and the Government have delivered. Three months ago, before the three European Councils, we were told, “You’ll have no allies on the European budget, you have no chance of amendments to the banking union, and you’ll be completely isolated on treaty change.” All three warnings given by the Leader of the Opposition and others have turned out not to be true.

[Mr William Cash (Stone) (Con)]

My right hon. Friend says that the EU changes must be done in the right way. At Prime Minister’s questions last Wednesday, he stated in reply to me that

“it is the national parliaments that provide the real democratic legitimacy within the European Union.”—[Official Report, 12 December 2012; Vol. 555, c. 291.]

However, how is it that, in the European conclusions he signed on Friday, and despite a unanimous European Scrutiny Committee report calling on him to stand firm, the national Parliaments and the European Parliament are stated as being commensurate in respect of EU competences?

[The Prime Minister]

I should again make the point I made to my hon. Friend on Wednesday. Change in Europe cannot go ahead unless it has the support of national Parliaments. Clearly, the European Parliament has a role set out in the treaties—whatever one thinks about that, one cannot ignore it. When it comes to changes in the eurozone, Angela Merkel going back to her Parliament matters; when it comes to the European budget, my coming back to this Parliament matters. That was my point. In Europe, the Parliaments that matter are the national ones—this is the Parliament that matters to me.

European Council

William Cash Excerpts

Monday 26th November 2012 Commons Chamber

[The Prime Minister]

First, let me answer on the right hon. Gentleman’s specific points about figures. He asked about the scale of the cut that was envisaged for the common agricultural policy. In terms of tier 1 of the CAP, the proposal, to be fair to pillar one—to be fair to the Council and to the Commission—was to cut it from €336 billion to about €270 billion. So a cut was proposed for the CAP, but we made the point that even with that, we could go ahead and reach a good budget settlement. We said that without doing even more on the CAP we could reach a deal by looking at administrative savings and Commission savings, and also by looking at some of the programmes that are, quite rightly, being expanded, but expanded far too much. For example, Europe spent €8 billion on the Connecting Europe proposal in the last financial period, and it was proposed that that was increased to some €36 billion, so we could make significant cuts in that proposal and still land a sensible deal.

The right hon. Gentleman referred to the memorandum that we put in front of this House, which referred to the 2011 situation and the 2011 budget. What I have said is that, yes, we want a cut, but we should settle, at worst, for a real-terms freeze—and of course that freeze would be across the period 2013 to 2020.

The right hon. Gentleman asked why we had not built any alliances. I am happy to tell him that the Dutch, the Swedes, the Danes, the Finns and the Germans all very much backed our position. I might ask him about his alliance, as he is in alliance with the socialists in the European Parliament, whose position was to favour a 5% increase in the ceilings, not a cut. They wanted to end all rebates and to introduce a financial transactions tax of up to €200 billion. If he does not believe that, he should listen to the leader of the European socialists and democrats, Mr Hannes Swoboda, who said:

“Regarding the additional cuts, it is unacceptable that the majority of member countries are letting themselves be blackmailed by David Cameron”.

That is the view of the socialists.

The right hon. Gentleman has made his approach in this Parliament, but if he had been at the Council he would have heard a lecture by the socialist head of the European Parliament, who told the whole Council that anything that was a cut to what was being proposed would be completely opposed by everyone in the socialist group in the European Parliament, including his MPs. If the right hon. Gentleman wants to get a good deal for Britain, he might start by talking some sense to his socialist friends.

[Mr William Cash (Stone) (Con)]

Given the fact that, over the past 20 months, we have had about as many economic summits, and they have gone nowhere, given that Mrs Merkel is now saying that she wants the European Commission to be the European government and given the statements that have been made by Mr Barroso about a federal union, does my right hon. Friend not think that the time has now come to establish a lead on the question of a fundamental change in our relationship with the European Union and to do what the British people want, and get on with it as soon as possible, before it is too late?

[The Prime Minister]

I agree with my hon. Friend about the number of European Councils. That is undeniable; there has been a huge quantity.

I agree with my hon. Friend that there is an opportunity for a change in Britain’s relationship with the European Union. That is why I have talked about a new settlement and fresh consent for that settlement. Where I think I disagree with him is that we need to show some patience while the eurozone sorts itself out, and as the eurozone integrates I think there will be opportunities for that. As for his comments about the Germans, I hope that he is a regular reader of Der Spiegel online, because after the Council it said:

“Danke Grossbritannien…you’ve given hope to many people suffering under the terror of EU bureaucracy”.

European Council

William Cash Excerpts

Monday 22nd October 2012 Commons Chamber

[The Prime Minister]

I am very grateful to the hon. Lady for her school report and I shall continue to try to improve on my use of “United Kingdom” rather than anything else. On the issue of what the European Commission and European Union spend, as we get into this budget debate we should still look at the 6% of the money spent on the EU’s central costs and the fact that, as I said at the weekend, some 16% of Commission officials are paid more than €100,000 a year. Okay, 6% is a small percentage of the total but it is still meaningful in getting a good budget deal.

[Mr William Cash (Stone) (Con)]

I commend my right hon. Friend and the Financial Secretary for so far complying with the European scrutiny rules on these banking proposals. Now my Committee has been able to recommend them for debate, and an early debate at that. However, given the reported advice of the Council’s legal adviser and the inherent impact of the proposals on our national interest, will he veto the proposals, not least because the proposed voting changes would expose the City of London to qualified majority voting, which would be very damaging to it?

[The Prime Minister]

The European Union is going about this change to banking union through a treaty base that requires unanimity, so Britain has a full part in the discussions; but I do not want us to veto proposals for a banking union for the eurozone because I think the eurozone needs a banking union. We should be putting our negotiating heft, as it were, towards ensuring that those of us remaining outside the banking union have proper safeguards. Let me make one last point: I am sure that my hon. Friend knows that a lot of financial services regulation in the European Union is already done by qualified majority voting.

Prime Minister’s Adviser on Ministers’ Interests

William Cash Excerpts

Tuesday 17th July 2012 Commons Chamber

[Mr Jenkin]

I think the guidelines are the ministerial code, and it should be for the adviser to determine his own process, but it is perfectly reasonable for the Government and the Prime Minister to insist that the adviser has a quick process to establish prima facie cases and decide whether they are worthy of further investigation rather than go into the full process straight away. I can understand the Prime Minister being reluctant to refer cases to Sir Philip Mawer, who had established a very long, tortuous and indisputably fair process, but not one that could be quick under the pressure of political events as required.

[Mr William Cash (Stone) (Con)]

Has my hon. Friend given any thought to his own Committee’s involvement in pre-appointment scrutiny in the light of the comments and thoughts of the Liaison Committee on such questions?

[Mr Jenkin]

We held a hearing with the new adviser on Minister’s interests, but we were anxious—at least, I was anxious—to make it clear that it was not a pre-appointment hearing. Personally, I have absolutely no doubt of Sir Alex Allan’s bona fides and integrity. Unfortunately, we expressed the view that the manner of his appointment undermined the idea that he is actually an independent adviser, although he is certainly an adviser. He has a day job, too, in that he advises Ministers on their respective private interests and potential conflicts of interests, and ensures that there is a register of Ministers’ interests. That is his main job, and I have no doubt that he does it extremely efficiently. As I say, however, the manner of his appointment does not lead the public to believe that he is truly independent.

Oral Answers to Questions

William Cash Excerpts

Tuesday 10th July 2012 Commons Chamber

[Mr Harper]

I do not know whether that is what the commission will recommend. It gave us some welcome interim advice on reform of the European Court of Human Rights, which was helpful in the negotiations that secured the agreement of all 47 members of the Council of Europe to some improvements, which were welcomed on both sides of the House. I will wait to see what the commission recommends at the end of the year.

[Mr William Cash (Stone) (Con)]

Will the Minister confirm that, far from nibbling away at this problem, which many of us fear is what the commission is doing, any Bill of Rights will be based on Westminster legislation, not on European Union legislation or the European convention on human rights?

[Mr Harper]

Again, I do not know what the commission will recommend. It contains distinguished and eminent lawyers on both sides of the argument. I think that it will come up with a very good report, and the Government will consider what it says. I remind my hon. Friend that this country signed up to the European convention on human rights only because this House decided that it should do so. We will listen to the commission’s conclusions and act on those that the Government support.

EU Council

William Cash Excerpts

Monday 2nd July 2012 Commons Chamber

[The Prime Minister]

There were brief discussions about Iran because the discussions about the single currency, the eurozone and the growth compact were so protracted. There is strong agreement in the European Union that the sanctions are right and necessary and I think that if we could get Iran to take a more sensible path on the issue of civil nuclear power, that would help unlock the problems of middle east peace rather than making them worse.

[Mr William Cash (Stone) (Con)]

I was heartened by my right hon. Friend’s interview on the referendum question, but given his negative answer to me on 23 May on that same question, will he take the advice of the London taxi driver to whom I have just spoken, who just said, “The British people are not stupid; they understand the position. Give them renegotiation, give them a referendum, get rid of the coalition agreement—then, he will be re-elected by a massive majority.”

[The Prime Minister]

I can see that it must have been a particularly satisfying and heart-warming taxi ride for my hon. Friend. As I have said, I do not think that an immediate in/out referendum is the answer, but ruling out a referendum is not the answer either. There are opportunities to build the sort of settlement we want in Europe and the Government believe that we should take advantage of them.

G8 and NATO Summits

William Cash Excerpts

Wednesday 23rd May 2012 Commons Chamber

[Mr William Cash (Stone) (Con)]

There is increasing pressure for political union between certain member states. Whether this is achieved by enhanced co-operation, by separate intergovernmental treaty or by other stealth measures, does my right hon. Friend accept that, irrespective of the European Union Act 2011, such a fundamental change in the relationship between such member states of the European Union and the United Kingdom would necessitate a referendum?

[The Prime Minister]

I do not agree with that position. I think the right position for the UK is to say that we should hold a referendum only if power were to pass from Westminster to Brussels or if we were to join some new treaty or political construction that involved the passing of that power. I agree with my hon. Friend, however, that the single currency clearly has within it the seeds of greater political union, so we have to work out—in this country, in our coalition and in the Conservative party—how to respond to that and how to get the best deal for Britain as the situation develops.

Public Procurement

William Cash Excerpts

Tuesday 6th March 2012 Commons Chamber

[Mr Harper]

I note the hon. Gentleman’s point but I think that you would restrain me, Madam Deputy Speaker, if I felt tempted to get into a debate about the merits or otherwise of the eurozone so I am going to resist that temptation.

[Mr William Cash (Stone) (Con)]

A big issue that has cropped up in the past year is that of Bombardier. The question that the hon. Member for St Helens North (Mr Watts) just asked is apposite because this is not simply a question of whether there are fair rules on procurement in terms of competition. Because a legal framework has been created, there is a special and fundamental requirement to comply with those rules because they are part of the legal process. The problem is not merely whether proper competition is being avoided but whether the law is being breached as well.

[Mr Harper]

I thank my hon. Friend for making that point. On the specific issue of procuring rolling stock, he will know that when this came up in the House last year the then Transport Secretary made it clear that the bids were being evaluated by criteria laid down by the previous Government. The problem was that we had to follow the criteria that were already laid down. The then Secretary of State also said that we would look at procurement in the growth review that was under way, and that we would look at what happens in other EU countries that are constrained by the same rules and at best procurement practices to make sure that, where appropriate, we include appropriate socio-economic criteria in the procurement decisions. That has to be done right at the beginning; we cannot set out the criteria and then change the rules part way through the process to favour domestic bidders. I have looked in detail at the particular case my hon. Friend mentions and it was made clear that the decisions that people are not happy with were taken under the previous Government and that we had to implement them. The alternative would have been to suspend the procurement process completely and go right back to the drawing board.

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[Mr Harper]

That is a very good point and I will leave it hanging. I have not seen any evidence that our civil servants are always trying to do our industry down. No doubt the right hon. Gentleman will respond by giving me evidence of that on another occasion.

[Mr Cash]

Before my hon. Friend sits down—

[Mr Harper]

I am not anywhere near sitting down, but I shall give way.

[Mr Cash]

After 28 years in this place one gets a sense for when a Minister wants to get to the end of his speech as quickly as possible, particularly when he is being assailed on all sides. May I just ask whether a full analysis has been made by the Government through the appropriate Department—not his Department, but the Department for Business, Innovation and Skills—of whether there has been a real investigation into the way public procurement operates in this country as compared with the rest of Europe?

[Mr Harper]

The short and honest answer is that I do not know. I will find out and make sure that I or my right hon. Friend the Minister for the Cabinet Office writes to my hon. Friend to let him know.

I was not close to sitting down because I was about to set out the three areas in which the Government have subsidiarity concerns about the proposed oversight body—concerns that are shared by the European Scrutiny Committee. First, the oversight body was not proposed in the Commission’s consultation green paper or otherwise consulted on, so neither member states nor anyone else had an opportunity to comment on the proposal. The Commission’s impact assessment does not provide a clear or detailed justification. The European Scrutiny Committee expressed similar concerns about the inadequacy of the Commission’s impact assessment when we debated the common European sales law.

Secondly, the proposal for a single, national oversight body in each member state does not recognise or respect the different legal systems within the UK. As Members are well aware, Scotland has a separate and distinct legal system. Under the devolution arrangements, the development and application of public procurement policy and the implementation of public procurement legislation are devolved matters in both Scotland and Northern Ireland. As I have mentioned, Scotland has chosen to implement the procurement directives separately. The requirement for a single national oversight body for a member state is inconsistent with those settlements, and the Commission has not demonstrated any objective necessity for a single body in each member state.

The third substantial concern is the proposal that the oversight body should be empowered to seize the jurisdiction currently resting with the courts to determine some disputes about compliance with the procurement rules. That would be a judicial function, whereas the other functions of the body would be administrative or regulatory. If they were all combined in one body, that would intrude unjustifiably in national legal and judicial structures. That would be inconsistent with the UK’s legal traditions in which a clear distinction is made between judicial and administrative functions. The remedies rules that I mentioned earlier leave it to member states to determine the legal structures that enforce the rules. There seems to be no clear justification for departing from those now. This might affect other member states as well.

As I have said, a number of other member state Governments will have issues with the national oversight body, whether on grounds of bureaucracy, cost, incompatibility with existing arrangements or subsidiarity. The Parliament of one country has already set out similar concerns to ours in a reasoned opinion. The debate has been very helpful and the European Scrutiny Committee’s motion is very welcome. I look forward to listening to other Members and having the opportunity to support the motion and have this House take a sensible decision today.

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[Jacob Rees-Mogg]

If I may divert from the set text from the European Scrutiny Committee, it is always worth remembering that subsidiarity started as a theological term in the Roman Catholic Church, of which I am a member. That is one of the most centralised bodies of any organisation anywhere in the world, with power vested in the Holy Father, so I have always been rather suspicious as to what the purpose of subsidiarity is.

[Mr William Cash (Stone) (Con)]

As a fellow Catholic, may I ask my hon. Friend whether he agrees that it is one thing to have the Jesuitical concept of subsidiarity, which has been brought into the rule-making of the European Union, as a theological question, and that it would be far better if the matter were regarded purely as one of theology and not exclusively one for political purposes?

[Jacob Rees-Mogg]

I am grateful to my hon. Friend for his helpful intervention. I do not think one should use the term “Jesuitical” too pejoratively, as the Jesuits are a fine body who, I believe, educated my hon. Friend—

[Mr Cash]

With great success.—

[Jacob Rees-Mogg]

With enormous success, which is acknowledged around the country and for which we are all grateful. However, I agree with the fundamental point that it is a political rather than a theological reality in this case.

By virtue of article 5 of protocol No. 2, any draft legislative Act should contain a “detailed statement” making it possible to appraise its compliance with the principles of subsidiarity and proportionality.

I turn now to the Committee’s view, as expressed in the draft reasoned opinion. The first conclusion we came to was that the Commission had failed to consult member states in the Green Paper, or otherwise, on the possibility of setting up a single national oversight body. This is in clear breach of article 2 of protocol No. 2, and I ask the Minister to say whether he agrees with this, and whether he intends to pursue it with the Commission.

Similarly, there is no evidence in the Commission’s explanatory memorandum or impact assessment of it carrying out the requirement under article 5 of protocol No. 2 to prepare a “detailed statement” containing

“some assessment . . . in the case of a directive of its implications for the rules to be put in place by Member States, including where necessary the regional legislation”.

As a consequence, the draft directive on public procurement and, by implication, the draft directive on procurement by public entities is said by the National Assembly for Wales to breach the devolution principle in both Wales and Scotland. I quote from the letter of 23 February from the National Assembly for Wales:

“The proposal also fails to have regard to the principle of devolution in imposing the duties on a single body.”

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[Kelvin Hopkins (Luton North) (Lab)]

It is always a great pleasure to listen to the hon. Member for North East Somerset (Jacob Rees-Mogg), whose speech was properly prepared and helpful to the debate. I am very pleased with the Government’s motion, and it is not often that I am unqualified in my support for the Government. Indeed, from time to time I am critical of my own side, although the robust speech by my hon. Friend the Member for Barnsley East (Michael Dugher) was also very welcome. We also heard some particularly helpful interventions from both sides of the House, and I concur with them all.

I am happy to speak in favour of the motion and support the principle of subsidiarity in this instance. The proposal states:

“The subsidiarity principle applies in so far as the proposal does not fall under the exclusive competence of the EU.”

I am rather pleased that the national health service and various other public bodies do not fall under the exclusive competence of the EU. In fact, I rather like them being under the exclusive competence of the British Parliament, but that is my personal view. I think that we ought to decide democratically what we do with our public services and not be dictated to by anyone else.

We are putting forward a reasoned opinion, but I would go even further and call it a reasoned opposition. Indeed, I think that opt-outs or derogations would be preferable to subsidiarity, as I have argued from time to time. The Government have talked about the possibility of regaining some powers from Brussels, and I could suggest one or two to be returned—but that might go beyond the boundaries of the debate.

The draft directive is about contracting authorities or public bodies, but some of those are now more or less in the private sector, so I am not sure whether they really fall within the scope of the EU’s proposal. The idea of a national oversight body, presumably set up by the British Government, that would police British contractors or contracting organisations on behalf of the EU is bizarre. If the EU wants to set up a body to police things, it should do that itself. It should not expect us to do it. Even then, I would, of course, object.

We are talking about the EU trying to lever public services into the marketplace, and the EU marketplace rather than the British one. I am in favour of strong public sector organisations with public sector employees, paid for publicly and accountable to this Parliament, local authorities or other public bodies. I am against the privatisation of our public services in principle, but if there is to be any private involvement it should be British private involvement, and we should not see our public services sold off to foreign organisations over which we have little control, if any. The whole proposal is unacceptable.

The European Scrutiny Committee’s document refers to social services. It states:

“The evaluation on the impact and effectiveness of EU public procurement legislation has shown that social, health and education services have specific characteristics which make them inappropriate for the application of the regular procedures for the award of public service contracts.”

That is a long way of saying that it is inappropriate for the EU to intervene in our public services, and I strongly agree. I am a member of the European Scrutiny Committee. Sadly, on this rare occasion I was unable to attend the meeting at which the matter was discussed, as I was out of the country on parliamentary business—I obviously missed an interesting and serious debate—but I absolutely support the Committee’s decision.

There have been some general comments on public procurement, what other countries do and what we do, and it has been observed that some countries seem expert at somehow managing to secure contracts for their companies rather than foreign ones. Indeed, I remember some years ago Signor Agnelli, the proprietor of Fiat, being asked why there seemed to be Fiat cars everywhere in Italy, whereas other countries seemed to import cars. He denied the existence of any sort of protectionism or arm-twisting in Italy and said that it was simply because Italians preferred to drive Fiat cars. We all know that Italy is completely above suspicion in these matters, so I will go no further.

Members also talked about railways. I really think that we have made a terrible mistake in offering the Thameslink contract to Siemens. I have been travelling on Thameslink and its predecessors for 43 years, and if the contract proceeds as we expect, I shall be very unhappy about the fact that in future I will be travelling on Siemens trains rather than Bombardier trains made in Derby.

I am known to be sceptical about the EU arrangements. I want voluntary arrangements with our fellow European countries. I am an enthusiastic European in the genuine sense. I love Europe as a place, the countries, the people, the politics and the philosophies that have come out of this great subcontinent, but I am not in favour of an ever-growing EU that is increasing its control over our lives and economies and trying to dictate how we run our countries. That should be done by democratically elected Parliaments. I hope that in time other countries will feel as we do about that. With the current crisis in the eurozone, I suspect that other countries are already starting to think in those terms. The Greeks are very unhappy about what is happening, and who can blame them? Around 25% of their population are unemployed. Wisely, the UK has been somewhat more sceptical of the EU, and perhaps has been leading the way towards a more sensible future for the whole of Europe in the coming years.

[Mr Cash]

rose—

[Mr Harper]

rose—

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[Mr William Cash (Stone) (Con)]

I see that the Minister is anxious to get to his feet and am sorry to have to disappoint him, but it will not be for long.

As my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) dealt so well with the European Scrutiny Committee’s representations, I want to look at some of the context within which this all takes place and, in particular, draw attention to the explanatory memorandum provided by the Government. It states:

“Public procurement plays an important role in the overall economic performance of the European Union. In Europe, public purchasers spend around 18% of GDP on supplies, works and services. Given the volume of purchases, public procurement can be used as a powerful lever for achieving a Single Market fostering smart, sustainable and inclusive growth.”

There is one point to which I am bound to draw attention, and that is the figure of 18%, which is a monumental percentage of the European Union’s GDP. We therefore want to be absolutely certain that it is not subject to abuse.

There is a good degree of cross-party support on this question, and when intervening during the debate I mentioned that there are important reasons for ensuring that we are not cheated through any fancy practices by other member states. I voted for the Single European Act 1986 and wrote a letter to The Times about it, drawing attention to the difficulties that might arise if any mistakes were made in the Act’s operation. At the same time I tabled an amendment stating that nothing in the Act would derogate from the sovereignty of the United Kingdom Parliament.

As it happens, the then Speaker, Bernard—Jack—Weatherill, and I had a discussion, because I disagreed with the House officials on the selectability of my amendment. I was told in those days—I repeat, in those days—that the question of derogation from the sovereignty of the United Kingdom Parliament was regarded as reopening the whole issue of the European Communities Act 1972. In fact, it did no such thing, and I am glad to say that since then such amendments, including those on the sovereignty of the United Kingdom Parliament, have been accepted on several occasions.

That raises the question of the extent to which a single market, and the legal framework carried with it, is compliant with the general principles of competition, because we live in a global environment. We live in a world where there is a great deal of international competition, so constraining economic performance and public procurement within the single market raises one or two issues.

On the question of the manner in which the report has been put together, the explanatory memorandum states that

“the European Commission conducted in 2010/2011”—

only a short time ago—

“a comprehensive evaluation of the impact and effectiveness of EU procurement legislation drawing on an extensive body of evidence and new independent research.”

I raised that question from the UK point of view with the Minister, because it is one thing for 18% of the EU’s entire GDP to be looked at by the European Commission, in which some of us have not very much confidence, but it is another thing to ask whether the UK Government have looked at the implications for the UK, particularly in the light of recent examples, such as Bombardier.

The Minister replied, “Well, that was done under the previous Government,” but, although that is no doubt true, the question of whether it is a matter for political point-scoring does not necessarily lead us to the right conclusion. I am interested to know now what impact public procurement has on the UK vis-à-vis other member states of the European Union. That is why I asked the Minister if he would be good enough to take it up with the Business Department, and he has graciously agreed to do so.

It is clear that Germany has a monumental advantage, some of it created by its own success, when it comes to foreign direct investment in other member states—particularly in those with economic and political ties to Germany, as geographically, politically and economically such links give Berlin substantial leverage over those countries. That process is in part leading to a distortion of the EU’s overall objectives, hence the increasing concern that Germany is becoming not merely the predominant member of the European Union but the dominating element. I say that in no hostile sense—just that I think it is bad for Germany, for Europe and for the UK.

[Kelvin Hopkins]

It has been said that the European Union is one way of avoiding conflict between the nations of Europe, but, with the pressures inside the eurozone at the moment, tensions are being exacerbated by the European Union, not lessened.

[Mr Cash]

I do not need to go any further down that route, other than to say that public procurement amounting to 18% of the EU’s GDP represents a significant advantage to countries with the maximum degree of foreign direct investment, if they are able to induce the Governments and official bodies of those countries to procure for them the return that they no doubt feel is justified, given the contribution that countries such as Germany make to the European Union as a whole. All that requires a great deal of careful analysis.

I do not want to be unduly suspicious, but I fear that there is a considerable amount of hand-wringing over the extent to which Germany is expected to contribute to the European Union in relation, for example, to Greece and to Spain, when in fact, as Wolfgang Münchau said in the Financial Times a couple of days ago, the root problem is the imbalance that Germany is creating by its refusal to import. I cannot be sure about this, but BIS should ask itself the serious question whether there is not a similar problem in relation to public procurement.

If Germany, for example, makes massive contributions to other countries in Europe, no doubt it believes that if it in turn obtains contracts for the roads, railways and all the other things that make up the public procurement system, it will therefore, through the contracts that it has secured there, receive a repayment—with fantastic profits attached, no doubt—that returns the money to Berlin. That is no doubt what it wishes to achieve—and is achieving.

[Mr Watts]

The hon. Gentleman hits on a real problem. As far as I can see, the German authorities, whether they be the Government, civil servants or politicians, all tend to see manufacturing as the core of what they do. They make every effort to maximise the potential work that they can generate for their own manufacturing industries. That is not the case in the UK, and we are in an unfair position because of it, so do we, as well as the Germans, need to change?

[Mr Cash]

I am glad that the hon. Gentleman raises that issue, because it is very much the direction in which we should go. We need an analysis and we need to know whether the UK is stepping up to the plate. We know that we have incredibly good industries, but are we making the most of them? Are we being cheated? Are we—if it falls short of cheating—being taken for a ride? Are the rules being properly complied with, and should BIS not conduct a strategic analysis of the issue, irrespective of the fact that the Business Secretary, being a Liberal Democrat, has an apparent abhorrence of investigating what I should like him to look at in terms of the inadequacies and manipulations of the European Union?

I am not being hostile or over-suspicious, but when 18% of GDP is tied up in such public procurement, it is very important for us to be completely sure that we are having a calm and collected look at the extent to which it operates for or against us. The evidence on Bombardier suggested that things had gone badly wrong. I do not really care which side of the House is at fault; as far as I am concerned, this is an opportunity to get it right. I am glad to see that those on both Front Benches are nodding in agreement, because I know that their main concern is to serve the national interest, and that would be well achieved by making such an analysis.

The document contains, as part of the study that the European Union conducted, issues relating to small and medium-sized enterprises. Bigger manufacturing industries tend to be able to look after themselves, but some SMEs need to be carefully monitored and given every possible advantage to enable them to get into the procurement market. The document also refers to the “strategic use” of procurement in Europe—strategic, I imagine, in the context of global trade.

There are deep concerns about the extent to which our water, electricity and many other main utilities are exposed to degrees of competition that are apparently not complied with in some other countries. I hope that that, too, will form part of the overall strategic analysis.

[Kelvin Hopkins]

Some of our utilities, such as electricity and water, are owned by foreign companies—even foreign state-owned companies—and there is a suggestion that they are exploiting the British market to subsidise their own markets.

[Mr Cash]

Yes. This is all part of what I would like someone to look into very carefully. We are far too used to hearing generalisations and soft words when we are in fact talking about very substantial sums of money—on a monumental scale—and the question of whether this is a fair and free market that benefits us. I take into account the remarks of my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) about the manner in which free trade operates, but for practical purposes, in terms of public procurement, I would want to be satisfied that it always works on a fair and reasonable basis and does not in any way upset the UK economy.

This is a very important debate, albeit not one that has attracted a vast amount of interest. I am afraid that these European debates, the contents of which are extremely important, do not necessarily attract the degree of attention that they deserve, because although they deal with people’s daily lives, with whether the UK economy will function effectively, and with many other areas within the rubrics of the European Union’s legislative framework, they do not have the word “domestic” stamped on them, and people think that when we talk about “Europe” we do not mean the UK. The truth is that the UK is affected very directly by everything that happens in the EU, and I want to be entirely satisfied that we get the full benefit of the trading system that the single market is supposed to provide.

[Kelvin Hopkins]

The work that the Chair of the European Scrutiny Committee does, in which some of us try to support him, does make a difference, and this House does hear about the realities of the European Union. I think that our Front Benchers, possibly our civil servants, and certainly the public outside appreciate that we are taking these things seriously. I pay particular tribute to the hon. Gentleman in that regard.

[Mr Cash]

That is extremely generous of the hon. Gentleman. I feel very strongly that we have a duty to look at these matters and to do what we can to help in debating them for the benefit of our constituents in the United Kingdom as a whole.

The explanatory memorandum contains a reference to the impact assessment and its executive summary, which gives us reason to believe that the impact on the European Union has been considered. However, the European Union is not an end in itself; it is an artificial framework that has been created for the purpose of an objective, which is, ultimately, political union. We know that. We also know, from what Chancellor Merkel has been saying recently, that that is very much tied up with her own agenda; I do not need to go down that route. We must consider the impact on the United Kingdom of the huge amount of money involved in public procurement, and the effect in relation to utilities, which may determine whether we get any energy and whether we have a proper water system, electricity system, and so forth. Enabling other countries’ companies to have control over those matters is a question not only of trading but of national security.

It is very important to have these things properly looked at. I am sure that the Minister and the duty Whips will pass on my messages to BIS, and that we will end up with a virtuous circle whereby we have a proper analysis to ensure that the United Kingdom gets what it deserves out of the European Union, and does not participate in it in ways that are, as our debate on subsidiarity amply demonstrated, unnecessary.

European Council

William Cash Excerpts

Monday 5th March 2012 Commons Chamber

[The Prime Minister]

I know that the right hon. Gentleman has considerable expertise in this area, and I thank him for welcoming the news. We have to understand that Serbia has already taken some quite important steps forward that were difficult for it to take. I was concerned that the European Union should demonstrate its openness to the steps that President Tadic had taken, because slamming the door in his face after he had taken them could have encouraged the extremists in Serbia rather than people who want to have a peaceful European future.

[Mr William Cash (Stone) (Con)]

In congratulating the Prime Minister on his veto—[Interruption.] It would have been an EU treaty had the Prime Minister not exercised the veto. In congratulating the Prime Minister on his veto and on his insistence on growth, does he recognise that we are at a crossroads, with two separate European treaties—one in line with the Lisbon treaty, and the other in breach of it? With the Chancellor of Germany now insisting on a further leap towards political union, will the Prime Minister take forward his current concerns about the legal position of the non-EU treaty to the European Court?

[The Prime Minister]

I am grateful for my hon. Friend’s support. He is absolutely right that that treaty places no obligations on us. It is worth making the point that it does not have the force of EU law: not for us, not for the EU institutions and not for the countries that sign it. As he knows, my view is that while we have reserved our legal position on the use of the institutions because there are real concerns, the path he outlines—of a legal challenge—is a less good one than using our leverage and influence to ensure that the agreement sticks to fiscal union rather than gets into the single market. That is the right approach and the one we are pursuing.