European Commission Annual Policy Strategy - Westminster Hall Debate

Speech by Jo Swinson delivered to Westminster Hall on Thu 2nd Jul 2009

Jo Swinson (East Dunbartonshire, Liberal Democrat): I am very pleased to serve under your chairmanship once again, Mr. Illsley, with a small but select group of MPs.

The document that we are discussing is, like many-perhaps most-European strategy documents, more of a statement of priorities than a fully worked out strategy. Some mention has been made of its length. I welcome the fact that, at just 11 pages, it is admirably brief. Considering the size of some documents that we receive from Brussels, it is a step in the right direction. I am a great believer in the idea that documents, whether from the EU or this place, are often far too long, and that brevity and clarity of purpose are not valued enough. It is right that we should have the opportunity to debate the priorities, although it is also important to know the mechanism by which the UK position is communicated back, which presumably happens through the Council of Ministers. The mechanism for such responses is not always clear.

I welcomed your earlier ruling, Mr. Illsley, that the debate should not turn into one solely about ratification of the Lisbon treaty, because I have sat through various Europe debates that have felt a bit like groundhog day. I imagined that it would come up-quite rightly, as it is mentioned in the document and is obviously an important, unresolved issue for Europe. Whether it is resolved one way or the other will probably depend on the outcome of the second Irish referendum, which is due this autumn, as the other countries that have not yet ratified it have indicated that they are waiting on the second decision of the Irish people. The Irish may well say no. That would be a shame, but ultimately, although the Lisbon treaty is a good treaty, it is not earth-shattering. In such circumstances, we would have to use the structures as they are currently formed and try to make them work better.

Graham Stuart (Beverley & Holderness, Conservative): I wonder what the hon. Lady's analysis is of the treaty. Does she think that it is fundamentally the same as the European constitution, as the author of the constitution seemed to suggest?

Jo Swinson (East Dunbartonshire, Liberal Democrat): There are certainly huge similarities between the two, but, in its very nature, the Lisbon treaty is not a constitution. It is an amending treaty. It does not delete and rip up all the previous treaties, which a constitution would have done, so it is different from that point of view. Also, some concessions were negotiated by the UK Government. As such, the treaty does not represent a step change, which would require a referendum.

However, I do think that it is time for the people of Britain to have their say on Europe. People discuss it, but the last time we had a referendum on Europe was decades ago. It was before I was even born, let alone able to vote in it. Most people in the country have not had that opportunity, and I would welcome such a debate. A better question to ask, given what people are actually discussing when they talk about Britain's future in Europe, is whether we should be in Europe.

Graham Stuart (Beverley & Holderness, Conservative): It was mentioned in passing that the Labour party suffered its worst ever electoral result in the European elections. It was surprising, given the collapse of the ruling party's vote, that, as an Opposition party, the Liberal Democrats saw their vote fall. Does the hon. Lady fear that that was because the British people felt betrayed? A promise was made in the Liberal Democrat manifesto to support a referendum on the European constitution. The Lisbon treaty is practically the same, but the Liberal Democrats have failed to honour their promise and have come up with this political fix of a debate on whether we should be in or out, for which no one is asking.

Jo Swinson (East Dunbartonshire, Liberal Democrat): The hon. Gentleman will know, of course, that the Liberal Democrats actually gained an MEP-one that we previously would have lost-in the east midlands in the European elections. Obviously, we are pleased about that. Our vote did go down by about 1 per cent., but all the main parties saw their vote go down.

Graham Stuart (Beverley & Holderness, Conservative): Just a little fact for the record: the Conservative party saw its share of the vote increase.

Jo Swinson (East Dunbartonshire, Liberal Democrat): The hon. Gentleman is obviously pleased to make that correction for the record. However, European elections are based on a proportional system.

Chris Bryant (Parliamentary Under-Secretary, Foreign & Commonwealth Office; Rhondda, Labour): I do not want to let the Conservatives get away with that comment without referring to the fact that in the previous elections-not the last ones but the ones before, when Mr. Hague was leader of their party-they got 36 per cent. of the vote but then went on to a crashing defeat at the next general election.

Jo Swinson (East Dunbartonshire, Liberal Democrat): The electoral statistics are all very interesting, but two points about European elections should be borne in mind. First, the voters know that they are voting under a proportional system, not first past the post, in which there is less chance of smaller parties getting elected. In fact, smaller parties such as the Greens, the UK Independence party and, sadly, the British National party, won seats. People understand the system, as we found out in Scotland, where there are now four different voting systems. People are savvy; they understand which system they are using and whether they should support the main parties. Secondly, it is clear that all the main parties suffered because of the current scandals at Westminster. Anyone who was out knocking on doors during the European election campaign will be aware of that.

Much as I am sure that a post-mortem of the European elections would be interesting to political anoraks like us, I shall return to the issues at stake. The Lisbon treaty will change the structures in Europe for the better. Of course, by the time the annual policy strategy is in place, if it goes ahead-there may be some changes, given that it is in draft form and would need to be reviewed by the incoming Commission-the treaty will also be in place, if it is ratified.

It is important that we turn away from the institutional navel-gazing that the EU has been obsessed with in past years, whether on the constitution or even on amending treaties to deal with the number of commissioners, qualified majority voting or co-decision. Frankly, such discussions turn people off Europe.

At a time when turnout for European elections is very low-that is a great concern-there is a case to be made for the good things that Europe manages to do. Roaming charges were mentioned. This summer, that will have an impact on the everyday lives of our constituents. It is important that the case for Europe is made, that discussion is held about policy issues, and that Europe gets away from institutional nonsense and simply thinking about its own structures the whole time, and gets on with delivering for the people of this country.

Robert Goodwill (Shadow Minister, Transport; Scarborough & Whitby, Conservative): I know that the hon. Lady is a big enthusiast of the Lisbon treaty, but will she tell me about one action that the European Union or any of its member states have been prevented from taking in response to the global financial crisis because we have not yet ratified it?

Jo Swinson (East Dunbartonshire, Liberal Democrat): The hon. Gentleman slightly misrepresents my position. I think that the Lisbon treaty is a good treaty. It is good for Britain and good for the EU, in that it actually gives Britain a bigger say within the EU. I would like to think that that would mean that Europe would take better decisions, but it might be too charitable to the Government to assume that more say for the UK would always mean that.

However, I have never said that every aspect of the treaty is earth-shattering. Clearly, the EU has been able to take some action. However, in the case of competition legislation, the EU does not manage to enforce its own rules well enough, even under the current systems. The rules are interpreted differently by different countries in Europe, and that is a problem and a challenge with which Europe must deal.

I hope to focus my contribution on three parts of the strategy: economic and social recovery, climate change and a sustainable Europe, and Europe as a world partner. Clearly, as has been said, EU co-operation is needed to bring an end to the recession and to mitigate its effects on our constituents, who are currently concerned about whether they will lose their job, about indebtedness, and about the general economic outlook for the country. I welcome on page 3 of the document the intention for enhanced co-operation on

"projects to make for more investment in energy efficiency, low-carbon and renewable energy technologies, infrastructure projects and measures to combat climate change."

That is a key point. We need to tie together the strands of climate change and economic recovery, because a green route out of the recession is crucial. President Obama in the United States is certainly pursuing one. We will need to rebuild our economy, but our new economy will have to look a bit different from the one we have had. We need to rely less on fossil fuels and ensure that we cut our carbon, but, rather than seeing those things as dreadful costs to business, and a threat, we should see them as an opportunity for Britain to lead the way in new technologies and export them to other countries.

For example, Denmark has a huge lead in the use of wind turbines. One wonders why, given the renewable resources at the UK's disposal. I come from a part of the country that enjoys many weather events, including wind, and it is near the coast for marine energy. Why have we not managed to take more of a lead, and to reap the economic benefits of doing so? That is vital for tackling climate change, which I believe is the biggest threat that the global community faces, and for creating jobs. On the ground, in our constituencies, those are the things that people are concerned about.

Graham Stuart (Beverley & Holderness, Conservative): Will the hon. Lady give way?

Jo Swinson (East Dunbartonshire, Liberal Democrat): I will. We are not exactly short of time.

Graham Stuart (Beverley & Holderness, Conservative): I am extremely grateful. The hon. Lady is right to highlight the importance of tackling climate change. She has not mentioned the lamentable failure of this Government to produce much in the way of renewable energy, which is why I think that only Malta and Luxembourg have a lower percentage of renewable energy than we do.

How does the hon. Lady think that we can tackle the failure to invest in renewable energy and change our energy sources, yet work with people without having what I have in my constituency? The whole of Holderness is up in arms as wind farms are imposed from above despite the opposition of local people, councillors, parishes and businesses-of everybody locally. It feels as if there is no voice for local democracy. How does she think we can best balance those two priorities?

Jo Swinson (East Dunbartonshire, Liberal Democrat): The hon. Gentleman raises an important point. In my constituency, there are currently many controversies, not about wind turbines, but about planning on a variety of issues. It is about a lack of democracy. It is frustrating when a whole community is united in a particular objective, and their rights and views seem to be trampled over. There is a balance to be had, because there is sometimes a "not in my backyard" attitude-although I am not accusing the hon. Gentleman's constituents of that-which could mean that we never have any renewable technologies anywhere.

We need more incentives for communities in the form of benefits that will accrue. The community can see a real benefit when the money and funds for renewable energy projects are put in place. There is, perhaps, even a profit-sharing basis for that. In Shetland, for example, fabulous projects have been put in place by the oil industry. Where there is a community benefit, that can help.

We should also recognise that onshore wind is not the only answer. Offshore wind, for example, is perhaps less likely to attract criticism, and many marine renewables are on the sea bed and do not seem to have the same impact on a landscape. Those things need to be developed, because as an island with huge potential-whether in respect of the Severn barrage proposals, in the Pentland firth or elsewhere offshore-we need to ensure that we are using the resources.

Technology transfer poses a challenge. Page 4 of the document says that

"both the copyright and the trademark systems should be modernised to make them responsive to the needs of business and consumers".

That is the sort of statement with which everybody agrees, but there is a real challenge in getting the correct balance. For example, we do not want patents on low-carbon technologies to become a barrier to transferring them to developing countries, where that technology is needed because their economies are growing. If we are effectively saying to those countries, "You can't develop on the same trajectory of carbon emissions that we did", it is only fair that we give them assistance to enable them to develop low-carbon economies. Equally, with that kind of technology transfer there can be a barrier to investment in new technologies. It is important that such vital measures are not prevented by technology transfer. It is difficult to get it right. The £60 billion fund to assist with technology transfer globally to developing countries, which was proposed by the Prime Minister in his recent speech, could help. A lot of environmental groups have suggested that that does not go far enough, but at least it is a step in the right direction.

Mr. Ellwood mentioned carbon capture and storage. I agree that the Government have not made nearly enough progress on that vital issue, but I disagree with what he said about the feasibility of CCS. As a member of the Environmental Audit Committee, I can say that we have looked into CCS and come to the conclusion that, although there is currently no commercially viable project on the scale that would be necessary, each element of the technology has been tried and tested. It is about having the right incentives in place. If business gets a clear signal that new coal-fired power stations will not be allowed if it does not include CCS, the investment will come. The Government should have been bolder in that regard.

We can argue about whether we can achieve Britain's cuts in carbon emissions without CCS. Some would argue that nuclear could help to fill that gap, although I am not a fan of it. However, in respect of other countries, members of the EAC met Government officials in China and heard about the number of coal-fired power stations that they are building and will continue to build. It is clear that there is no way that we, as a planet, will achieve our objectives if we do not have CCS technology. It is important that that technology can be retrofitted to existing power stations, rather than just having technology that is pre rather than post.

We have suffered a financial crisis of confidence in the banking sector, with consumers throughout the country not being sure where to put their money and unsure what was going on as everything seemed to collapse. It is important that we consider the competition issues that have been raised by the nationalisation or recapitalisation of the banks and the merger of Lloyds and HBOS, which the Government have waived competition rules to allow. There is a great danger that we set ourselves up to repeat the mistakes from which we have already suffered. The enforcement of competition rules, which are mentioned on pages 3 and 4, is important in aiding recovery.

Lloyds now boasts on its website that it has more than 50 per cent. of the UK market share of social bank accounts and Goldman Sachs says that it controls 30 per cent. of the UK banking market overall. I do not see how that can be healthy in the long term. It will be necessary to break up the banks, particularly when they are re-privatised back into the private sector. Paraphrasing Mervyn King's recent statement, if banks are too big to fail, then they are too big. In such circumstances, the Government have to bail out the banks. The lack of competition is a problem, and it is not good for customers, either.

Graham Stuart (Beverley & Holderness, Conservative): The hon. Lady will have noticed, as I did, that the document specifically mentions "post" in relation to competition enforcement. What does she think the European Commission's view will be of the Government's retreat in the face of their funders, the unions, which provide 80 per cent. of the Labour party's income? Back-Benchers have perhaps been driven by those unions into refusing to allow the modernisation and partial privatisation of the Post Office, which was apparently, until last week, absolutely necessary.

Jo Swinson (East Dunbartonshire, Liberal Democrat): There are some questions about whether that decision is politically or commercially motivated. I leave it to the Minister to tell us what the European Commission will say and what the Government will say to it.

Climate change is a real success for Europe and we should not be afraid of praising the success so far. Mr. Stuart will know, because he also sat on the EAC and we produced more than one excellent report on the European Union emissions trading scheme, that although the ETS is not perfect, it has certainly improved in its different phases and is being used as a model by other schemes around the world, notably by the Australians, who have recently, thankfully, woken up to the threat of climate change and want to take action. We have a pioneering scheme and although it has its teething problems, people are learning from it and it will be a crucial part of how we, as a planet, tackle the problem. That pioneering attitude has enabled the EU to have a leadership role, which has been lacking from the United States. Even now it is more difficult for the US to lead on the issue, because of the different circumstances within that country, including the views of its population, for example, which relies on cheap petrol.

The EU has an opportunity. The regulations on lower-carbon vehicles have helped EU cars to be far ahead of their counterparts in the US. The Tata Nano is being launched in India and the company hopes to launch a similar model in Europe, but before doing so it has to make its carbon emissions much better for it to access the European market. Those regulations will encourage manufacturers from elsewhere in the world to improve their carbon standards.

Landfill tax has led to a huge increase in doorstep recycling around the UK. The Government may be tempted to take the credit for improved recycling facilities, but it is important to recognise that the EU deserves some of the credit, because the directive on landfill has played an important role. Too often Governments can take the credit for good things that the EU does and lay the blame on Europe for less popular things, but that does nothing to push the cause for working together with our European counterparts. I shall touch briefly on the common agricultural policy, because its reform is important for sustainability. The strategy notes that 2010 will be the first year of full implementation of the CAP's health check. That is a good and welcome step forward, because subsidies coupled with what farmers produced led to food mountains, wine lakes, and excesses that were not helpful to the environment, nor ultimately to trade with the rest of the world, and caused huge problems for developing countries. That protectionism must be challenged and is being challenged, although not far enough yet. It is good to see progress on reform, but it is important that pressure is maintained to ensure that it continues.

Cuts in aid will free up money. The DEFRA summary says that around €479 million will be freed up throughout Europe from aid cuts, and that can be used to invest in renewable energy, climate change measures, biodiversity and so on. What is the corresponding figure for the UK, and how do the Government intend to use those funds?

Robert Goodwill (Shadow Minister, Transport; Scarborough & Whitby, Conservative): Does the hon. Lady agree that there can be no justification whatever for spending more than €1 billion a year to subsidise tobacco production in the European Union, much of which is of such low quality that it is exported to the third world?

Jo Swinson (East Dunbartonshire, Liberal Democrat): The hon. Gentleman makes his point well, and it seems ridiculous to subsidise such a product, especially as we all know the harm that it causes. We should encourage alternatives, rather than the status quo.

Graham Stuart (Beverley & Holderness, Conservative): The hon. Lady sounds insufficiently angry about the impact of the common agricultural policy, not only its impact on consumers throughout Europe but, more importantly, that it has been a fundamental blockage to the Doha trade round, which has resulted in the inhibition of trade with the third world and developing countries. I suggest that it has led to the death of many people in developing countries, not just from the obscene subsidy on tobacco, but because of its blockage of access to our markets. She should be more righteously angry and opposed to the current failure to reform it.

Jo Swinson (East Dunbartonshire, Liberal Democrat): The hon. Gentleman asked to intervene, and then criticised me for taking his intervention. He anticipates my comments on Europe as a world partner. He rightly raised the huge problems that the CAP causes, but it is important to note that progress is under way, and that should be welcomed. The CAP is absolutely unacceptable and, sadly, the outlook is not optimistic for getting rid of the worst protectionism. The French are a stumbling block, although the Government have taken a positive line and tried to push it strongly in the EU, but obtaining agreement from other countries is not always easy.

A matter on which I have campaigned, as you will be aware, Mr. Illsley, because you also have a great interest in it, is excessive packaging. I note that the section on climate change and sustainable Europe does not mention packaging, which is a significant omission. The UK's legislation on reducing packaging waste is based on the snappily titled directive on packaging and packaging waste 94/62/EC. The Minister for Energy and Climate Change, Joan Ruddock, conceded in April 2008 that the directive's essential requirements do not work, and said that they must be reformed at EU level.

I have pursued the matter and have discovered that a review of the regulations was announced in September 2007. In December 2008, it had still not started, and the EU Article 21 Committee said that it expected that it would take between nine and 10 months, so it might finally be ready in the autumn, and I hope that it will recommend some strengthening of the essential requirements regulation. That is an example of the EU when it is not at its best. It announced a review, but it took more than two years for any results to be available. Sometimes, European business moves at snail's pace; a bit more proactivity and dynamism would be welcome. I am keen to see the result of the review, and may seek opportunities to raise it with the Minister or his colleagues in Environment, Food and Rural Affairs questions.

The Minister mentioned the Copenhagen negotiations in December, and I agree that they are vital in tackling climate change. It is essential that the EU takes a leading role, and it has tried to do so. Working through the EU and explicit diplomacy on climate change is one of the four objectives of the Foreign and Commonwealth Office, and it is welcome that that is written into the FCO's objectives and not hived off to the Department of Energy and Climate Change, or the Department for Environment, Food and Rural Affairs. World diplomacy is vital, because in many countries there is not the same acceptance or understanding of, or belief in the scientific evidence for climate change, and it is not such a priority because developing countries must deal with a whole host of other issues. We know that if climate change continues on the current trajectory in the long term, its perils will be felt most strongly in developing countries, so it is vital to do all we can as a world community to mitigate it.

Adaptation should not be forgotten. We have already had a temperature rise of 0.6°, and scientists predict that it will rise by at least 2° even if we manage to curb emissions rigorously now. That will not be 2° across the planet; it will be higher in some areas, and lower in others. Adaptation measures will be necessary, and we have seen the disruptive effect of just a few days of hot weather in the UK. We see similar disruption when there is flooding, and the effects in other countries will be so much worse.

Turning to Europe as a world partner and the point that was raised in an intervention, I was intrigued to read on page 7:

"The Commission will also pay particular attention to preventing and addressing unfair trade-distorting actions and protectionism in third countries."

That is hugely ironic, because, as was mentioned, the CAP continues to epitomise those unfair trade-distorting actions and protectionism which the Commission is now saying it is against. I hope that those words can be used to encourage our European partners to move further along the route of getting rid of protectionism, because that is vital.

My first Adjournment debate in Westminster Hall was on trade with developing countries in the months after the Make Poverty History march and campaign. A huge number of my constituents were motivated to write to me about it, and I would have thought that all hon. Members would agree that urgent action is needed. Some of that is about money, but some is just about dropping barriers. There has been stagnation in the Doha round, and that beggars belief, because we are not talking just about money, companies, trade and so on; we are talking about people's lives and livelihoods, and whether they have the basics of life that we take for granted. It is vital that our words are made to have real meaning, and that they are not glossed over in statements and policy papers that do not have any teeth.

I welcome the statement on page 6 of the strategy document that accession negotiations with Croatia and Turkey will continue. That is important. Despite recent setbacks in the border dispute with Slovenia, Croatia is well on its way to membership, and I hope that the issues can be resolved.

Turkey's accession may be further off, but it would be a positive move to include Turkey in Europe. Some human rights issues are outstanding, but it is important to recognise the incentive that EU membership and the accession process can provide. Many countries have been and are keen to join the EU, and that carrot is a great motivator for them to improve their record on human rights and corruption. We perhaps were not firm enough with some eastern European countries about securing action on corruption and so on before they acceded to the EU. That means that some opportunities are lost, because the pre-accession period is the time when the EU's influence is probably greatest in encouraging reform. We do not want to repeat those mistakes, but we do want to continue with those proceedings.

I noted the very diplomatic wording on Kosovo:

"The Commission will also prepare measures to support Kosovo's political and socio-economic development and to help it progress, as part of the region, towards the EU."

In fact, there is a host of diplomatic difficulties stemming from the fact that some EU states have recognised Kosovo as an independent state and others still have not done so. Last year, I had the opportunity to visit Pristina and Mitrovica and meet various Kosovan and Serb politicians. It was clear to me that huge difficulties remained in that region, even though there is peace. EU membership is perhaps one way out of the problems. The different Balkan states being EU members and then having relationships under the larger EU umbrella is potentially hugely beneficial. Although there are diplomatic difficulties at the moment, I hope that that objective will be pursued.

The Commission wants bilateral relations to be deepened with Israel, Moldova, Morocco and Ukraine. That is certainly interesting, but there are areas of concern. Greater co-operation with the EU could be used as an incentive for Israel to fulfil its responsibilities to uphold human rights. I argue that we should not upgrade relations with Israel until it agrees to suspend settlement expansion and shows real commitment to the peace process. We have seen some moves in that direction, albeit small ones, recently. Obviously the situation is very sensitive, but although in terms of overall diplomacy and influence the US has a far greater role to play than the EU, the EU should use the tools that it has at its disposal to pursue that agenda. That is my representation to the Minister on Israel.

The issue of Morocco is not touched on often. There is a strong trading relationship between Morocco and the EU, but Morocco is not co-operating with UN negotiations on the future of Western Sahara. It has not agreed to a referendum on independence for the Western Sahrawis. The Amnesty International report in 2009 entitled "The State of the World's Human Rights" said on Morocco:

"The rights to freedom of expression, association and assembly continued to be restricted. Criticism of the monarchy or views contradicting the official position on other politically sensitive issues were penalized...Allegations of torture were not investigated, and victims of past human rights violations were not granted effective access to justice."

Slightly worryingly, it also said that

"the issue of impunity for torturers was not raised"

when the EU and Morocco agreed in October 2008 the road map to closer co-operation. I urge the Minister to use what influence he might have in his discussions with EU counterparts on further relations with Morocco to ensure that those issues are not left on the sidelines but are highlighted.

It is vital that Britain continues to engage in Europe, and this policy strategy lays out a set of priorities that are well thought out, although there are the issues that I have raised. I hope that whoever wins the next general election, the Government will continue to engage in Europe, so that we have a full role in reviewing the strategy, because it is important for many of the global challenges that we are working hand in hand with our EU partners.

My other plea is for us to focus on making things happen. The case for Europe is made best when Europe delivers for people, rather than when we get lost in institutional minutiae. Europe should focus on job creation, investing in a lower-carbon world, trade liberalisation and human rights, and prove just how relevant it is to the people of Europe.