§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Alan Howarth.]
§ 12.1 am
§ Mr. John Redwood (Wokingham)I am grateful for the opportunity to raise in the House the question of the relationships between these Houses of Parliament and the European Economic Community institutions.
I am also grateful that so many of my hon. Friends have thought it worth spending another half an hour in the House after a long day debating the many Bills that have come before us. It is a sign of how important these issues are to hon. Members that they are prepared to stay after midnight when such items traditionally come up for debate. I am also grateful to my right hon. Friend the Minister of State, Foreign and Commonwealth Office, who will be answering the debate.
These issues have gained great prominence in recent weeks as a result of a hard-fought European election campaign for the European Parliament and the acceleration in pace of the measures now coming before the various national Parliaments of the EC member states as the 1992 endeavour gathers momentum.
I am one of those who welcome the 1992 proposals. I have always wished to see the creation of a genuinely common market with freer trading between the member states and beyond the boundaries of the European Community into the wider world.
That process will create much greater prosperity and it is the free enterprise system worldwide which is now demonstrating just how much it can do by way of giving people freedoms, liberties, choices, a better standard of living and better moral and spiritual choices than the totalitarian systems that have been on offer in the post-war world.
The citizens of western countries can turn to their flexible friend, the Barclaycard, to assert their right to purchase a wide variety of goods and services of their choice, supplied in a competitive market place by their fellow citizens in their roles as employees, employers and entrepreneurs in a host of businesses; whereas in eastern Europe and the other totalitarian regimes, rather than turn to the Barclaycard, people can only clutch the ration book and queue at the local state shop to see what tawdry goods might be available for however many hours they might have to wait to get any goods at all. There will be little choice, little joy, and little opportunity to enjoy the benefits of enterprise, because enterprise is stifled where freedoms are stifled.
Much remains to be done to realise the vision of a genuinely open and free market in Europe. I am glad that the Government and my right hon. Friend the Minister who is to reply have been in the forefront of many moves to deregulate European markets and in carrying on the task of creating the conditions in which more trade, commerce and entrepreneurial activity can flourish.
The most recent report shows that we are only at the halfway stage. Out of the 279 measures that comprise the 1992 enterprise, half remain to be drawn up and to go through all the procedures necessary for agreement on them to be reached. There should be greater mutual recognition of the need to speed the process of gaining acceptability of them by all member states, rather than concentration on harmonisation for harmonisation's sake 281 and trying to construct the perfect Euro-product or service —when it would be reasonable to accept each other's products and services and the diversity of the market places that they imply, in order to improve trade and to achieve greater prosperity.
I believe that the European Community now recognises that need, and there is evidence that faster progress is being made with introducing the various measures through greater use of mutual acceptance rather than harmonised standards. There is also some understanding that in some areas it is not always possible to develop the perfect, single, Community-unified answer—as with patents and patent offices, for example—and that it may be necessary to proceed through better understanding of the differences that exist in member states.
Britain is in the forefront of liberalising capital movements, in insisting on deregulation of the telecommunications market, and in arguing strongly for the deregulation of air traffic in tackling the scandal of air fares in Europe being so much higher than those for travelling comparable distances in the United States of America. It has also campaigned for the benefits of deregulation to be enjoyed by the abolition of lorry quotas, and for changes in cabotage arrangements in shipping and in public purchasing—where a whole range of items should be open to competitive tendering and purchasing across frontiers.
We shall know that the Common Market has truly arrived when we see French civil servants travelling round in Nissans built in the United Kingdom, or the German public able to buy British insurance policies. In the same way our country will benefit from many of the goods produced in other member states.
It is a great task, and the Government should concentrate the Commission's mind on ensuring that 1992 is delivered before other, larger steps are attempted towards the creation of a more unified European state—the creation of a federal state.
Among the problems to be confronted is the legislative backlog. Although the Community has made progress with many of the directives necessary to complete the 1992 endeavour, many more remain unimplemented. Of the last 68 directives that have been through all the processes to become good European law from the point of view of the European institutions, only two have been carried into effect by national processes and Parliaments to become effective in the territories of the Community's member states. That only two out of 68 directives should have done so is a sign of the size of the task, and of how much needs to be done even to implement the work completed so far.
Britain is the best of all member states at implementing and enforcing directives, and others need to be persuaded —by negotiation and perhaps diplomacy—by member nations watching their behaviour that, if the Common Market is to mean anything, the directives must not only be approved and passed but enforced in every territory. Italy in particular has a long way to go before it reaches the standards achieved by this country.
The Commission and the European institutions are also selective in the way in which they look at the treaty provisions. The way in which some of the federal ambitions of the European institutions are being developed lies in picking on a particular clause in the treaty 282 and deciding that it provides cover for an extension of powers that was never knowingly or willingly granted by the member nations, through their original treaty obligations, or by the member states' Parliaments through their understanding of the workings of the original treaty and the Single European Act.
Yet there are other extremely important clauses in the treaty that seem to go unenforced. I am thinking particularly of articles 104 to 109—important articles relating to balance of payments disequilibria. The intention of the treaty is clear: member states should not run large balance of payments deficits or surpluses, especially not with one another, and action should be taken to tackle such imbalances.
Anyone considering the problem of European trade between member states would immediately spot one large structural problem: the German surplus. I have written to the Commission, and have been told that it is a difficult problem and one which the Commission would not like to tackle under the treaty articles, because it is too busy tackling others under other treaty articles. The existence of the exchange rate mechanism, with the particular parities chosen for the deutschmark, may be one of the causes of the persistent German surplus with almost all the other member states; the mechanism may be an actual violation of articles 104 to 109, which clearly state that balance of payments disequilibria must be dealt with promptly and recognise that monetary and currency measures may be required as part of a package to deal with the problem.
I welcome the Commission's attempt in recent years to enforce articles 92 and 93 on state aids. Important work can be done to ensure fair trade between member states, and that means that the subsidies paid to certain industries —espcially certain public enterprises—need to be rolled back, so that it is fair for an entrepreneurial business in Britain to compete with a nationalised enterprise in France in the knowledge that the latter will not be unduly favoured by massive subsidy or other protection. The Commission has taken welcome steps in that direction in some recent cases. I hope that the British Government will demand that those articles are strictly enforced, and that the unfair trading practices that remain are given greater prominence when the Commission does its work to see that competition is triumphant.
What concerns the House most is, of course, the problem of scrutiny, and our Parliament faces a severe difficulty in that regard. Matters often come before the House late, when positions have already been adopted by British Ministers attending the Council of Ministers, and common positions may have been adopted in Europe itself. The House is then in the invidious position of having to debate a matter on which a decision has effectively been made, and nothing can be done. I hope that, when reviewing scrutiny procedures, the Government will take seriously all the comments by right hon. and hon. Members on both sides of the House who would like such matters to be debated before common positions have been adopted.
I also feel that the Government should recognise that the matters now coming before us under the 1992 programme are of huge importance. For instance, the items in the second banking directive and the other directives relating to an open market in financial services may well entail the revision or replacement of great chunks of legislation passed by the House in comparatively recent 283 years. They are major items which deserve prime time debate, and I am sure that hon. Members in all parts of the House would agree with that.
It is important in reviewing scrutiny to remember from where the authority for many of these mesures comes. There has been discussion recently about exactly what was said—at the time of our entry into the European Community and at the time of the Single European Act —about where decision-making power did truly lie and about where sovereignty might rest. I have been examining what was said in the debates to see what the country and the House were told on those momentous occasions when big decisions were taken, both to enter and to modify the constitutional position under the Single European Act.
In 1971, in the debate on entry, the then Foreign Secretary said that great countries with the history of the European nations could not be "dragooned or coerced" into a pattern of political association which one or other of them did not like. He went on to make the case that there always had to be the protection of major national interests under the treaty agreements.
The present Lord Rippon of Hexham, who had put through the individual terms of entry, speaking about the legislation required to join the European Community, was even stronger in his tone. He said clearly that nothing in the measure "abridges the ultimate sovereignty" of Parliament, and he went on to say that there was no question of the measure setting up our entry into the EC making a thousand years of British law "subservient to the Code Napoleon." He reminded the House that it would always have a right of veto.
In 1986, the Minister who will reply tonight put to the House the arguments for the Single European Act, allowing majority decisions to be taken on those items essential to the 1992 programme. In that debate, she said it was only a limited extension of majority voting which would apply only to those issues required for the 1992 programme. She went on to say that it would not lead to a federal union. She reminded the House that the Luxembourg accord or compromise remained in place completely untouched and unaffected by those proposals going through as the Single European Act.
I was, therefore, grateful when my hon. Friend the Member for Stafford (Mr. Cash) introduced a Bill recently to reaffirm the importance of our commitment to the European Community and to remind the House of the scope and limits of competence set down under the treaties and the Single European Act. That Bill does much to remind us that the ultimate power to make proposals from Europe comes from this House, freely granted under treaty and by amendment under the Single European Act.
It reminds us that those powers are constrained and that it is important for the British Government not to allow those powers to be extended by abuse by the European Commission, when it was clear that the intention of the House was to allow majority voting to speed the 1992 process, which we welcome, but not to speed other matters, which I believe still require the unanimous approval of all the member states and where national interests should be protected if they are of more importance than the creation of a European solution to a given problem. There will be times when they will not be, and times when they will be, more important.
Can the Minister confirm that the Luxembourg accord is still there and could, in extremis, be used when our national interest warranted it? Does she agree that 284 majority voting applies only to those measures required to create the internal market and 1992? Does that mean that after 1993, if all those measures have gone through and been agreed, majority voting will no longer exist and will need some reaffirmation, by treaty or by Act of Parliament or both, to complete other objectives that were not envisaged at the time of the Single European Act? My reading of it suggests that there would need to be a renewal of powers if majority voting is to be used for purposes other than those itemised in the 279 measures required for 1992.
Does my right hon. Friend agree that at present it is important to complete 1992, that it would be a distraction to try to negotiate tax harmonisation or a social charter and that this country is not yet ready to amend the treaties to allow majority voting or new powers over taxation and over the movement of peoples and employee rights that would be required if the Commission wished to proceed by majority, rather than unanimity, on those sensitive matters of taxation and important items in the social charter?
Finally, does my right hon. Friend agree that it might be helpful to the British negotiating position over the social charter if, while making the point that this country does not believe that these matters are best handled at the European level and that they are better handled at national level, she used her ministerial position to present an alternative social charter to our European partners which contained illustrative ideas that might be useful in their countries, just as they have proved to be useful here?
In the hope that my right hon. Friend might find it helpful, I have given some thought to the type of items that could be included, but time will not permit me—hon. Members will be distraught to learn—to give a detailed exegesis of what they might be. However, they would include the work that this country has done on wider share ownership, on providing people with options over savings for retirement and the purchase of shares in the companies for which they work. It should certainly include the option that individuals ought to be able to buy their own home—whether it be a flat or a house in municipal or Government ownership in member country states—at a discount, since that has been one of our most successful social policies. I think that it would be very helpful if a similar right were to be granted to the citizens of other member states. It might also include health care rights similar to those that are provided by our National Health Service. It should certainly include trade union legislation similar to that which has been so successfully pioneered in this country.
As always in the House, the clock is against me, so I shall conclude my remarks.
§ Mr. William Cash (Stafford)I am grateful to my hon. Friend the Member for Wokingham (Mr. Redwood) and the Minister for allowing me to make four points.
First, I endorse what my hon. Friend the Member for Wokingham has said and I congratulate him on the way in which he dealt with the subject.
Secondly, since the passing of the Single European Act there is the opportunity, if we believe that it may be possible in future to amend the treaty, to consider adjusting the role of the Commission as against that of the Council of Ministers to ensure that we maintain a fully democratic Europe by putting due emphasis on the role of 285 national Parliaments and nationally elected representatives who are responsible for discharging their duty to their constituents in matters affecting both the domestic and the European sphere.
Thirdly, there are those who say that we who take the view that we should not move to a federal Europe are living in the late 1960s or late 1970s. I take the view that we are the people who are living in the late 20th century by matching up to the challenges of the global village that we now occupy. It is those who base their argument on the position as it has evolved since the 1950s who are guilty of an anachronism. We are the ones who are living in the world of today. I believe firmly that our view will prevail.
Lastly, I refer briefly to the European Court of Justice and to an interesting article by Mr. Mann in the journal of the Institute of International and Comparative Law in April of this year, which I encourage hon. Members to read. He makes it quite clear, as does Mr. T. C. Hartley, that where there are grey areas in the treaty of Rome there is a very strong tendency for the European Court of Justice to adopt the policy of political integration. As Mr. Mann put it, to paraphrase him, it simply does not listen. We must be extremely wary about that.
I do not have the time in which to develop those points, but I hope that the Minister will refer to them in her reply.
§ The Minister of State, Foreign and Commonwealth Office (Mrs. Lynda Chalker)I thank my hon. Friend the Member for Wokingham (Mr. Redwood) for bringing this important issue before the House. I also thank my hon. Friend the Member for Stafford (Mr. Cash) for his remarks.
The debate is both welcome and timely, coming so soon after the European elections and the Madrid summit. The relationship between this House and the Community institutions goes to the heart of our membership of the Community. We must ensure that the proper concerns of this House can be brought to bear on all EC-related measures in a way which is satisfactory to the House.
I should like this evening to mention the recent changes in decision making in the EC institutions, to which both my hon. Friends have referred, and then to focus on the role of Parliament in this process, with respect to the scrutiny procedure—which is a matter of concern to many hon. Members—and to the role and competence of Community institutions.
The Government believe that the decision-making process in the Community is working satisfactorily. The good progress that is being made on the single market programme is ample testimony to that fact. This is an area of policy in which the United Kingdom has been in the lead. I thoroughly agree with my hon. Friend that it is an area of priority, and it must remain so.
The House is aware that more than half the measures in the Commission's White Paper of 1985 have already been agreed. The Spanish presidency which has just finished achieved the very creditable record of agreement on 68 measures. That is no small achievement.
The progress was made possible only by the political impetus given by the Single European Act. Majority voting was vital for that. In the Single European Act, we provided for qualified majority voting where we want it, 286 while retaining unanimity where we need it—on taxation, free movement of people and employment matters, for example.
My hon. Friend asked whether I believe that majority voting will be needed once the single market measures have been completed. It would be rather sweeping to say that it might never be needed, because some existing measures, in the light of greater trading outside the Community—say with European Free Trade Association partners—might have to be revised. We must therefore keep qualified majority voting on the statute book, but it must be limited to the areas that were defined in the Single European Act.
If we are to create a genuine common market—the treaty of Rome set us the target more than 30 years ago —we must continue the process of deregulation and liberalisation, as my hon. Friend said. He made that quite clear in his recent paper for the Centre for Policy Studies. It is essential that we take that route and do not take no for an answer. The single market programme is consistent with the deregulatory philosophy which the Government have so successfully put through in Britain—1992 is very much a British song, but it is now being sung throughout the Community and in many other places. That is a measure of the success of Britain's deregulatory and liberalising policies of the past 10 years.
With the extension of majority voting, the Single European Act introduced the co-operation procedure to allow the European Parliament to play a more active role in the decision-making process. I believe that the operation of the new arrangements has produced a smoother inter-institutional process than there was before the Single European Act. Of course, we are still learning from that process, and we must have more contact and more exchange of views between hon. Members and Members of the Strasbourg Parliament.
We must always remember that there has been no significant change in the institutional balance. The power of final decision remains firmly with the Council of Ministers. That is fundamental to the institutional structure of the Community, and it is of direct relevance to the role of the House because Ministers acting in the Council of Ministers are directly accountable to the House, and so it must ever remain.
As I said in the debates in 1986, the Luxembourg compromise remains unaltered. We have made it absolutely clear that, when there is a vital national interest, a nation must be able to avoid being out-voted. That protects the very basis on which we joined the European Community.
The main theme of the debate is the role of the House. I see the need for proper parliamentary scrutiny of decisions taken by the Government in the Council of Ministers and for all legislation to remain at the national level unless there is good reason to tackle the issue at Community level. The Government attach the greatest importance to scrutiny of proposed EC legislation at Westminster. One or two other Parliaments have recently modelled themselves on what we are trying to do here. Nobody has said that it is perfect. A number of parliamentary committees are investigating the matter, and the Lord President of the Council is going into it in great detail. The Scrutiny Committee considers some 800 documents a year, sifting out fewer than 100 for further consideration. I pay tribute to the Committee for its assiduous work. Overall, the system works well, but we are trying to improve it.
287 We want to avoid unnecessary legislation at EC level. My hon. Friend the Member for Wokingham has drawn attention to attempts to extend Community competence —a matter of concern to many hon. Members. I assure my hon. Friend that the Government are alive to the problem. We shall continue to examine all proposals for Community legislation to ensure that they are necessary to achieve the objectives of the treaty of Rome, as amended by the Single European Act, and that they are in the areas for which there is Community competence we must, however, keep that in perspective. On much Community legislation, the technical question of legal competence does not arise.
Our concern is not so much with competence as with the related but separate concept of subsidiarity. It means that action should be taken at Community level only when it cannot be undertaken as well, or better, at national, or even local, level. The House will be aware that this 288 doctrine is frequently propounded by none other than the President of the Commission. There is a clear reference to subsidiarity in the Delors report on European monetary union and, more important, it was endorsed by the Heads of Government at two separate points in the Madrid European Council conclusions, on monetary and social issues.
We sometimes find new policy proposals objectionable on subsidiarity grounds, not because they break new ground for Community competence in the legal sense. We can get this right by sound vigilance. That is the way that we intend to go. I have noted—
§ The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
§ Adjourned at twenty-nine minutes to One o'clock.