The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi) (Con)
My Lords, I thank and congratulate my noble friend Lord Dykes on securing this debate on an issue of such significance to the United Kingdom. It has been a great starter for the main meal of a debate which I sincerely look forward to tomorrow. I am sure that many of the issues that have been raised today will be raised again tomorrow.
This Government are clear that membership of the EU is in the UK’s interest. We are also clear that the EU urgently needs to reform. As the Prime Minister and Deputy Prime Minister set out in speeches last year, the EU needs to become more competitive, more flexible and more democratically accountable, with powers flowing both ways and fairness between eurozone and non-eurozone members. I am delighted to hear the noble Lord, Lord Liddle, say that he agrees with almost 80% of the Prime Minister’s speech from last January. He also agrees with the need for reform, and it would be interesting to hear specifically the areas that he does not agree with. I certainly look forward to hearing from the Benches opposite in relation to how they feel the British people could also have their say in relation to these matters.
It is the Government’s priority to engage with all member states and the European Union institutions to make these reforms, which we feel are essential, a reality. Some have suggested that the UK is seeking special treatment in Europe. I want to be very clear on this. The reforms that we seek are for the benefit of all member states, and we are working with them to achieve this. My noble friend Lord Howell of Guildford said exactly that.
It is not as the noble Lord, Lord Giddens, described. I am pleased to say that we are already making significant progress, and I do not accept what my noble friend Lord Dykes said in his analysis. Let me give him a few examples of what I think our approach is already doing in terms of making a difference. We worked closely with countries such as Sweden to achieve a double majority voting rule, which provides a safeguard for non-eurozone members in banking union decisions and makes sure that our voice is heard.
We worked with other member states, including Denmark, Germany, Sweden and the Netherlands, to abolish the policy of—
Lord Davies of Stamford
Will the noble Baroness tell the House the reasons which make it not in the national interest to be part of the banking union?
Baroness Warsi
To be part of the banking union we would have to be part of the euro, and I am certainly not going to spend this debate debating the benefits of membership of the euro.
Lord Davies of Stamford
The noble Baroness is, with respect, wrong about that. A number of countries are joining the banking union who are not members of the euro, though they may join the euro of course. The banking union involves a common supervisory, common bank resolution and a common retail deposit insurance system which can be applied to countries which are not currently in the euro.
Baroness Warsi
I will look into this matter again. My understanding was that the banking union flows from the single currency and not from the single market, and therefore I will look at this question again and write to the noble Lord once I have considered it.
I was talking about work that we had done with the Danes, the Germans, the Swedes and the Dutch to abolish the policy of “discarding” caught fish as part of a wholesale reform of the common fisheries policy. We have secured the first ever exemption of micro-businesses from new EU proposals from 1 January of last year. We have worked with a coalition of countries to secure the first ever cut to the EU’s budget. We could have done none of this alone. Our engagement with other member states has been, and will continue to be, key. We will continue to work closely with our partners to further the good work on international trade agreements and cutting red tape to make Europe more competitive. We will work with others to ensure that the rights of eurozone-“outs” are protected as the eurozone puts in place the necessary governance arrangements to secure its long-term stability and safeguard the position of the single market.
We will continue to seek greater democratic accountability within the EU, particularly through strengthening the role of national Parliaments, and ensuring that the principles of subsidiarity and proportionality are respected. We will continue to position ourselves at the heart of the debate on the interests that matter most to the United Kingdom.
I think that the reading of the Government’s position on the part of the noble Lord, Lord Davies of Stamford, is simply wrong. We have been clear that membership of the EU is in the UK’s interest. On many occasions, the noble Lord has heard me detail at this Dispatch Box what I feel those interests are.
My noble friend Lord Howell also spoke about the respect for more subsidiarity and national Parliaments needing a red card. I fully agree with that. The Foreign Secretary has, indeed, called for a red card for national Parliaments, and others, such as the Dutch Foreign Minister, have made it clear that they, too, agree. We support the principle set out by the Dutch—namely:
“Europe where necessary, national where possible”.
My noble friend Lord Howell is absolutely right to say that follow-up is now needed. The noble Lord, Lord Davies, also said that we should focus on substance, not rhetoric. I wholeheartedly agree with that. Progress is being made. For example, the Prime Minister worked with Germany, the Netherlands, Sweden and Denmark to secure the cut in the EU budget. The PM and Commission President Barroso co-chaired the meeting of leaders from Germany, Italy, the Netherlands and others in the Business Taskforce, which presented a report on cutting red tape. These are but a few examples.
The noble Lord, Lord Kakkar, has raised the working time directive before. This Government are committed to limit the application of the working time directive in the United Kingdom. The noble Lord made some incredibly important points in relation to specific professions where this has had a disproportionate impact. The evidence suggests that a one-size-fits-all approach in the working time directive limits the time available for training and reduces operational flexibility in relation to particular professions and, of course, in relation to medicine and surgery. The Government will continue to prioritise this important issue which came up in the first set of balance of competences review reports. I do not have details of the clinical trials directive in my brief but I will certainly write to the noble Lord.
My noble friend Lord Dykes asked why the European Union Act 2011 excludes enlargement treaties from the referendum lock. The referendum condition is focused on treaties that expand EU competences or change the voting rules. Extending the geographical scope of the EU does not currently fall within the relevant section because it does not curtail the competence of existing member states such as the United Kingdom.
The noble Lord, Lord Giddens, asked me four questions. I will try to answer some of them. He spoke about the first set of reports from the balance of competences review. I dealt with some of this in an Oral Question earlier today. Although the first set of those reports mainly concern non-contentious areas, even where they lay out the benefits of EU membership they go on to say that further improvements could be made. Therefore, there is a real need for reform outlined in those reports. The noble Lord asked about the restrictions on EU migrants. I do not think I could put it better than my noble friend Lord Howell who commented on that point. I wholeheartedly endorse his comments. The noble Lord has asked me before about the PM campaigning for an exit. I can tell him that my right honourable friend the Prime Minister is campaigning for a referendum. We need to get back behind the idea of giving people the right to decide. We can then campaign in whatever camp we want to as to what we feel the outcome of that referendum should be, but we should at least give people the choice.
The noble Lord, Lord Liddle, suggested that treaty change would not happen or that there would not be the possibility of treaty change. A number of ideas have been considered in European capitals and in Brussels that we feel would require treaty change. Europe is changing because of the eurozone crisis, among other reasons, and we expect that process to include treaty change.
I conclude by thanking the noble Lord, Lord Dykes, again for giving us the opportunity to examine this interesting issue. We have covered some ground and I am sure we will cover more ground tomorrow. The noble Lord, Lord Dykes, in setting out the debate, asked specifically about the vision for reform. I will simply repeat what I said at the beginning about a Europe that is more competitive, more flexible and takes account of the diversity of its different EU member states and the differences between those which belong to the single currency and those which do not; a Europe that is more democratically accountable, so that the connection between citizens and the EU can be strengthened; a Europe where powers flow both ways; and a Europe that ensures fairness between those that are in the eurozone and those that are not.
Many European leaders welcomed the Prime Minister’s January speech and the debate that it has provoked. Many voices across Europe—in the Netherlands, Germany, Sweden, Italy, Austria, the Czech Republic and elsewhere—have spoken out in support of European reform. The Government will continue to prioritise this issue, working closely with our partners across Europe to deliver a Europe that works for all its member states and that works better.