European Union (Amendment) Bill

moved Amendment No. 10: 10: Clause 2, page 1, line 12, after ““excluding”” insert— ““(i) Article 1, paragraph 17, inserted Article 9C TEU, paragraph 4, and Article 2, paragraph 191 TFEU, replacement Article 205(a), paragraph 3; and (ii) ”” The noble Lord said: In the absence of my noble friend Lord Blackwell and at his request, I will do my best to speak to the amendment standing in his name. This concerns the new voting arrangements in the treaty, about which there has been a certain amount of black smoke. The Government has asserted that our voting influence will increase as result of the treaty. This is such a partial account as to be positively misleading. What the treaty actually does is to increase countries’ power to pass measures but to reduce their power to block them. This is a crucial distinction that has not been adequately recognised in debates, either inside or outside Parliament. Under the system agreed at Nice, EU laws presently have to pass three hurdles: 74 per cent of the weight of votes in the Council plus 62 per cent of the population and a majority of member states. Under the treaty there will be just two hurdles: 65 per cent of the population and 55 per cent of the member states. The highest hurdle has therefore been taken away, making it easier to pass legislation. This is what people must mean when they talk about streamlining decision making. These changes will make it harder to block legislation. Germany will be the only large member state whose power to do so would remain roughly the same. The London School of Economics has gone to the trouble of doing the arithmetic. I hope they have got it right. They quantify the UK’s loss of blocking power at 30 per cent. As with so much of the Lisbon treaty, the new voting system is taken directly from the Constitution with the difference that it will now not come into force until five years after the rest of the treaty comes into force, in other words not until November 2014. Europe would not be Europe without a thicket of almost impenetrable detail, but I will spare your Lordships the complex interim arrangements up to March 2017 and the various exceptions and deadlock-breaking compromises in the text. These are a sideshow to the main point that stopping unwanted laws will become more difficult. Originally, and we have heard this before too, the Government were against the new system. Peter Hain said: "““We see no need to revise the deal made at Nice””." But somewhere along the line our objection was dropped. Why should we be more concerned about blocking legislation than about passing it? The answer is straightforward. The Union is already producing too much regulation and it is too difficult to repeal it. A recent poll of 1,000 UK chief executives found that more than half of them thought that the benefits of the single market are now outweighed by the costs of EU regulation. That is an absolutely shocking result, but perhaps of little surprise to those of us who spend our days in business and away from Westminster and Whitehall. In fact, you could not walk into a small firm, charity or community centre without finding a similar level of resentment at the unending flow of EU rules, admittedly often gold-plated domestically. The latest edition of the Laws of England has doubled to 100 volumes, with most of the new laws, according to the editor, coming from Europe. According to the British Chambers of Commerce, EU regulation introduced since 1997 has cost British firms £40 billion, nearly three-quarters of the cost of all regulation introduced since that date. So making it even easier for Brussels to churn out laws seems extremely unwise. I shall give a couple of specific examples. The UK is currently blocking the removal of our exemptions from the working time directive. We are also resisting the temporary agency workers directive. Our ability to defend our position in the Council, particularly on the second directive, is fragile, and under the new system it would probably collapse altogether. In boom times we can just about live with all these impositions, but in difficult times we become more acutely aware of the drip-drip of business going elsewhere and of companies and wealth producers packing their bags for more competitive economic climates. The Financial Services Action Plan is costing the City £14 billion to implement. That was bad enough when the financial sector was flourishing a year or two ago, but today it is a heavy blow after Northern Rock and the liquidity crunch. As well as reducing our ability to stop legislation, the Lisbon treaty would also hinder our ability to amend it as it goes through the Council by using the weapon of our blocking power to improve draft laws and head off protectionism. Some of the more unacceptable proposals in the directives on financial instruments, prospectuses, consumer credit and transparency were only removed by the UK and other liberal member states through combining our potential blocking vote and threatening to use it. There are important regulations still in the pipeline, such as the Solvency II regulation on insurance, and it is almost inevitable that there will be a legislative response to the credit crisis. In both cases, the UK will be affected disproportionately, given the City’s pre-eminence in the financial sector. It is therefore all the more important to be able to stop ill-judged laws. Climate change regulation is another area of some concern. The emissions trading scheme and the biofuel targets are both deeply flawed. Some in the House today have called them a disaster. Now there is talk in France of jacking up EU farm tariffs on climate-related grounds. As the Financial Times pointed out yesterday, Monsieur Barnier’s proposals are very dangerous. The consequences of our being unable to block agricultural protectionism are very alarming for impoverished African farmers. The line is that without the treaty, the Union will grind to a halt. There is no evidence whatever to support this assertion. The EU of 27 member states has proved to be a more prolific legislative machine than the EU of 15. Members tonight have already referred to the Parisian Sciences Po institute, which found that the EU has been adopting new rules and regulations faster since enlargement. The voting system introduced by the Lisbon treaty is therefore unnecessary. Indeed, it is worse than unnecessary. It risks negating the liberalising reform agenda in Europe that this country has so long stood for. I beg to move.