Treaty of Lisbon (No. 2)

My hon. Friend makes a point that I shall tackle shortly. Clearly, in our opinion, it would not assist the quest. Here in the UK, despite liberalising some time ago, we still suffer from being Europe's last-resort gas bank. Continental suppliers buy gas from our market when they need it but they do not always sell it back to us when we need it. That partly accounts for why consumers felt the pinch in 2005 and 2006. Since 1 October, even though energy prices have risen by an average of 15 per cent., the interconnector pipe with Belgium has consistently exported more gas from us than it has imported. However, because of the total lack of transparency in our ability to scrutinise how, when and where gas flows around the region, UK suppliers have been hard pressed to respond. The Government have pointed to article 176A in the treaty and to the provisions on the functioning of the energy market and promoting the interconnection of energy networks as providing two important spurs to action. However, as the Government made clear in the original negotiations—and as we have repeated here—existing treaties already give the Commission the powers that it requires. For example, article 154 of the Maastricht treaty states that the European Community has the power"““to promote the interconnection and interoperability of national networks””" and, what is more, to do so"““within the framework of a system of open and competitive markets””." Article 155 of the same treaty enables the Community to legislate to ““ensure the interoperability”” of networks, and there is no individual member state veto to slow the pace of market reform. Equally, the Commission has powers on the liberalisation of services, as provided for by article 49 of the Maastricht treaty, which states that"““restrictions on freedom to provide services within the Community shall be prohibited in respect of nationals of Member States who are established in a State of the Community other than that of the person for whom the services are intended””." Energy is given specific precedence, as article 52 states that"““priority shall as a general rule be given to those services which directly affect production costs””." Finally, of course, the central foundation for action depends on the creation and maintenance of the internal market, under article 95 of Maastricht. The treaty of Lisbon makes no change of substance to that. Instead, the one new thing in the latest treaty is the explicit provision allowing the Union to pass laws on security of energy supply. We should be in no doubt about the seriousness of such proposals. We may not like the way the current European market operates and we may wish to use any and all opportunities to push for greater honesty in European markets; but the one thing that the Union does not need is greater institutional and centralised powers to create that. The existence of the provisions on energy, despite the Government's best attempts to erase them, casts a strange light on the debate that we had here last week on the Energy Bill. We said then that there was a somewhat dated feeling to the Government's renewables proposals, because we knew that the Commission would publish our targets for 2020 the very next day, as indeed it did. For renewables to achieve that 15 per cent. energy share in Britain's fuel mix, we felt that a more radical approach would be required from the Government. In a post-ratification world, the Energy Bill will not just look old-fashioned; it will be almost redundant. The treaty gives the EU a legal personality, empowering the Commission to contract on behalf of member states, which will enhance its power to conclude agreements on their behalf. However, our greatest concern is that the Government have not thought through the new energy articles' effects, given the long-standing EU legal principle of implied competence. As the House will know, those powers were first acknowledged in the case of Commission v. Council, also known as ERTA, in 1971, in which the European Court of Justice held that"““each time the Community…adopts provisions laying down common rules, the Member States no longer have the right, acting individually or even collectively, to undertake obligations with third countries which affect those rules””" In other words, the ruling gives the power significantly to override bilateral arrangements. According to the court,"““when such common rules come into being, the Community alone is in a position to assume and carry out contractual obligations towards third countries affecting the whole sphere of application of the Community legal system””." In support of its findings, the court also invoked member states' obligation of loyal co-operation under the then article 5 EC—now article 10 EC—which allowed it to conclude that"““to the extent to which Community rules are promulgated for the attainment of the objectives of the Treaty, the Member States cannot, outside the framework of the Community institutions, assume obligations which might affect those rules or alter their scope””." It might be deemed unfair to have national contracts. We might have the sight, for instance, of the Commissioner for Trade visiting countries in central Asia to broker gas deals, putting the Union at odds with the fine threads of bilateral relationships that have been painstakingly woven through years of commercial and political contact. Ministers have failed to explain whether that energy article and the body of legislation that would undoubtedly flow from it would prevent the UK from concluding energy agreements with third countries, as we have already done with Norway. The Secretary of State has argued as a passionate pro-European today and on other occasions, saying that we cannot hope to deal with the massive environmental challenges on our own, in isolation in Europe, and by ““sniping from the sidelines””, as he put it. Indeed, today he used the phrase ““10 years of isolation””, ““separateness”” or something like that—his exact words can be seen in the record. Just to be clear, there is nothing in what we have said that compromises our ability to work multilaterally to combat, for instance, climate change. Quite the contrary: Britain under the Conservatives will work constantly and closely with the Union to help ensure that we drive down our emissions across the region and to shore up our security of supply. We are happy that the Union's emissions trading scheme has created a framework for a carbon price. The framework is currently not as effective as it could be, but at least the architecture is in place. We still think that an effective underpinning of the EU emissions trading scheme by a carbon tax may be the best way of stabilising the price of carbon, or at least underpinning it, thereby maintaining investor confidence in both nuclear and renewable over the long term. However, the treaty could throw our ability to act independently into difficulty, if under the disguise of ““shared competence”” the Commission assumed powers over energy taxation, using it as a bridge for greater authority over fiscal matters. Before finishing, I should like to return to the deletion of that key phrase ““undistorted competition””, which my hon. Friend the Member for Hertsmere (Mr. Clappison) mentioned earlier.