I beg to move,

That this House
has considered the matter of European affairs.

Having spent eight years analysing its innards and obsessing about its own rule book, Europe now needs to focus all its energies on the needs and concerns of its citizens. Next week's Council meetings will do precisely that, with key discussions on jobs and growth, on climate change, on European co-operation to tackle crime, on the enlargement of the Union and on external relations, especially with Iran.

On the economy, I know some Members, particularly Conservative Members, would like to pretend otherwise, but no country in Europe has escaped the effects of the global economic downturn. Three things, I believe, have become apparent through this extraordinary period. First, every country in Europe has faced the same set of problems because no economy is a hermetically sealed unit. Italy's debt is now 115 per cent. of gross domestic product, while Greece's is 113.4 per cent. and Belgium's is 97.4 per cent. Unemployment across the EU is currently at 9.4 per cent.-its highest level since the recession began. In Latvia and Spain, it is at its highest, at 20.9 and 19.3 per cent. respectively.

May I take this opportunity to congratulate my hon. Friend on becoming Minister for Europe, a subject about which he is passionate and knowledgeable? May I also take up the issue of the economic situation in Europe? Given that next year is the 10th anniversary of the Lisbon agenda, will my hon. Friend recommit the Government to achieving the goals that were set in Lisbon in 2000-certain and precise benchmarks for European countries to follow, rather than a vague "We hope everything is going to be all right"?

I am grateful to my right hon. Friend. I cannot remember whether he was number six or number seven-or, perhaps, number five or number eight-but I know that some Ministers for Europe have not remained in post for long, and I intend to remain for a long time.

My right hon. Friend has raised an important point about the Lisbon agenda. He is right to suggest that we must work hard in the coming months, especially as we move into the Spanish presidency. I know that the Spanish intend to take up the task with keen endeavour. We need to move towards a compact on jobs and growth, which is one of the subjects I am about to discuss.

May I make a point about jobs and growth? Michel Barnier has been appointed as the single market Commissioner, and yesterday a new regulatory body was set up in Europe to regulate the financial services industry, which is critical to this country's success. Is the Minister as worried as we are, along with those in the City of London, about the possibility that both developments will damage our financial services industry and reduce the number of jobs in this country?

No. I respect the financial services industry in the City as much, and take as much pride in it, as the hon. Gentleman does. It is a vital part of the British economy. However, I would also argue-as the Chancellor of the Exchequer did in The Times, yesterday or the day before-that the City of London is as important to the economy of the whole of Europe as it is to the United Kingdom. That is why I think that any internal market Commissioner would want to protect and enhance its reputation and strength.

I warmly welcome the appointment of Mr Barnier. I know that he is to visit the United Kingdom before Christmas, and will have conversations with the Chancellor of the Exchequer. He has proved himself to be a very effective Commissioner in the past. I think the hon. Gentleman is making a mistake when he presumes that individual Commissioners will be representatives of their Governments. It is made very clear in the treaty, which I am sure he has read on several occasions-

I have.

I had no doubt that the hon. Gentleman had read it. May I ask him to wait a moment and calm down? The treaty makes it absolutely clear that Commissioners are there not to represent their countries but to act as a body of Commissioners, and I am sure that the Commission will produce legislation that will be helpful to the City of London.

I welcomed the unanimous agreement that was reached on a set of measures yesterday. I shall say more about that regulation shortly.

Given the point that the Minister made earlier, he might wish to consider the way in which the Spanish Commissioners have always behaved in relation to fisheries reform, which, in my experience, is often quite nationalistic. Will the Minister congratulate the new Conservative group in the European Parliament on securing the chairmanship of the Committee on Internal Market and Consumer Protection for Malcolm Harbour, a British Conservative Member of the European Parliament representing the west midlands, which will have an influence in that important sphere?

I thought the hon. Gentleman would go on to congratulate the Conservative group on completely isolating themselves in Europe, on not managing to secure a single vice-president of the Parliament, on not managing to secure a single Commissioner, and on being pretty much reviled by most Members of the European Parliament. I do not know whether he has visited the European Parliament recently.

As it happens, I have a great deal of respect for Mr. Harbour. I knew him when I was working in Brussels, and I look forward to working with him. I merely say to the hon. Gentleman that by absconding from the main group in the European Parliament the Conservatives have done themselves absolutely no favours, and have marginalised the British interest in Europe.

I am pleased to tell the Minister that I was a Member of the European Parliament for five years, and that I was deputy leader of the British MEPs and a deputy co-ordinator of the European People's party. I should be interested to learn whether the Minister's take on it is any different from mine.

I am very happy to welcome our new group. It is not isolated; it is at the very heart of the decision-making process, as Mr. Harbour's appointment has demonstrated.

With all that knowledge, the hon. Gentleman should know better. He is aware that the European Conservatives and Reformists, the group that he handpicked, along with his leader and Dastardly and Muttley- [Laughter.] Mr. Francois clearly recognises himself.

As Mr. Goodwill knows perfectly well, in the Committee on Economic and Monetary Affairs a couple of weeks ago, when the portfolios were being handed out on all the key issues relating to financial services and the internal market, not a single Conservative MEP was given a single portfolio. Two of the key portfolios were given to Labour Members. If the hon. Gentleman does not mind, I shall move on now.

rose-

Lady Penelope!

Thank you, Parker.

If it does not matter that Commissioner Barnier is French, then it also clearly was not a British triumph that the new High Representative is British.

I think it is a triumph that the new High Representative is Cathy Ashton, because I know her to be a very effective operator. I know that she will build coalitions of opinion. Yesterday even Conservative MEPs were congratulating her on her appearance in the European Parliament, and I am certain that she will do a very effective job.

May I take the debate back to fundamentals? Tuesday marked the coming into force of the Lisbon treaty. Will not people in the country listening to the debate-if anyone is-feel totally cheated by the fact that they have been left with no say, according to both the Government and the Opposition? Do they not want a say on our relationship with Europe, and is that not what the debate should be about?

To be honest, no, I do not think it should be about that. The reason is very simple. As I said at the outset, Europe has spent too much time over the last eight years rowing about the rules and about the treaty. I think most citizens in Europe want to see the European Union engage with the issues that really concern them, such as tackling crime, jobs and growth. They want to ensure that Europe is more effective on the global stage, so that we can deal with complicated issues such as Iran and Russia in a united way that is more in the interests of the British people.

Would it not be to the advantage of the British nation and, indeed, the House, where the European issue essentially poisons British politics, finally to resolve the issue of whether we are to be in or out of the European Union, and to take the opportunity to hold a referendum on the subject on the day of the general election?

All that we have seen so far is that every time a Conservative Member stands up, he comes out with a new- [Interruption.]

Order. I must tell Mr. Harper that he has developed quite a bad habit of chuntering from a sedentary position, for all the world as though the debate consisted of a private conversation between him and the Minister. I am glad that there is good humour, but we must now settle down a little.

If the hon. Gentleman wants a private conversation later, Mr. Speaker, I am sure we can arrange a date.

I think that what hon. Members were trying to say to me was that Mr. Pelling is no longer a Conservative Member of Parliament. I apologise to him. Former and present Conservatives alike, however, seem to develop a new policy each time they rise to their feet.

I was trying to say something about the economic matters that will be before the European Council next week. First, it is interesting to note that all European countries have adopted broadly similar measures. All member states have adopted significant stimulus packages, even those which, according to some-including the hon. Member for Rayleigh last year-were initially sceptical. For example, on 20 February 2009 the second German stimulus package, worth €50 billion, was adopted. Together with the first German stimulus of €32 billion, it represented an investment of 3 per cent. of GDP over two years, stimulating an additional 1 per cent. of growth. Germany invested €80 billion for recapitalisation of its banks, and France invested €40 billion. Those measures are very similar to the measures we adopted here.

Secondly, concerted action in the G20 and the European Union has been vital. The EU's response to the crisis has demonstrated exceptional unity of purpose in its efforts to restore jobs and growth. To date, its combined fiscal stimulus has exceeded €400 billion. I am certain that without that combined effort we would have faced a worldwide slump or depression akin to what our forebears went through in the 1930s.

The Minister talks about that stimulus as if it was a European stimulus. Was it not, in fact, an aggregation of stimuli by nation state Governments, and is that not a very significant distinction?

My hon. Friend is absolutely right that the sum I mentioned is the aggregate of all the different stimuli in each of the different countries. None the less, countries came together and engaged in lengthy debate in Council meetings and moved forward with very similar policies, and because of that we were then able to achieve a greater effect through that aggregate stimulus.

The Minister is making the case that Europe as a whole has benefited, but is not a key reason why we in this country have done relatively well recently the fact that we have had the pound, which has been allowed to devalue against the euro, thereby making our industry more competitive than other European industries? Also, is it still the Government's policy to join the euro when the conditions are right?

The Government's policy on the euro has not changed at all, as the hon. Gentleman knows. He says that over the past year there have been benefits to our having the pound, but there have been problems as well. I have met a lot of expatriates living in Spain, Greece and elsewhere. They face significant problems, because their savings in pounds have depreciated considerably; many Members have written about this on their constituents' behalf. The hon. Gentleman is right in other respects, however. For the British tourist industry, the problems of the recession have been softened because many French, German and Spanish people, for instance, have been able to come here as they have found it an affordable holiday option.

When the Minister reads what he said in response to the question from my hon. Friend Kelvin Hopkins, he will find that his comments were another instance of what keeps happening time and again: an example of co-ordinated co-operation between member states is interpreted as an excuse for further integration. The two things are very different, and the fact that we had a concerted financial stimulus is not an excuse to then have Europe-wide financial regulation and everything that flows from that. I shall come back to this point if I am called to speak later. We must not always have this confusion, which is caused by hailing co-operation between nation states as a success in respect of European Union integration.

My hon. Friend is absolutely right. There are areas where we need to have co-operation between member states on an intergovernmental basis-for instance, the fiscal stimulus has been helpful and we have loosened the bonds of the growth pact-but there are also areas where we have to co-operate on a more co-ordinated and enforced basis. I shall come to the issue of regulation shortly, and I suspect my hon. Friend and I will disagree on it.

Thirdly, we have learned during this international crisis that properly calibrated national regulation of financial markets is a vital protection against economic crisis, but national regulation alone cannot be sufficient. That is why the Prime Minister argued forcefully and successfully earlier this year at the G20 for enhanced global co-ordination, including through improved capital standards, increased oversight of systemically important financial institutions and the agreement of international compensation standards. It is vital that this be done on an international basis; otherwise, there is a danger that some countries will compete in the bargain basement of regulation, which does no favours to any economy in the world.

That is also why we wholeheartedly support the agreement reached at the meeting of European Finance Ministers yesterday on the setting up of three new European financial regulators. The new European systemic risk board will provide a much-needed Europe-wide early warning system on financial risk. These proposals pose no threat to our fiscal autonomy. Let me add that we believe that these bodies will work in the City's interests, not against them. The UK is proud of its robust financial services industry, and Europe derives significant benefits from it. London is the only city that can compete with New York as a financial centre, and I know that Europe knows that its success is integral to European economic prosperity.

There are some people who refuse to acknowledge that the regulation of financial markets, on a national or international basis, is important. Indeed, Mr. Redwood announced only a couple of years ago that

"we see no need to continue to regulate the provision of mortgage finance".

He added:

"In Financial Services we should allow people to buy and sell products that are not regulated".

I believe that would be an act of gross folly.

The shadow Chancellor, Mr. Osborne, added for good measure that this is

"how we liberate our economy to compete with the likes of India and China. Cut Government regulation".

It is clear that the Conservatives have learned absolutely nothing about financial regulation.

My hon. Friend talked about three regulatory bodies, but I believe they are in fact three supervisory bodies, which is a rather different thing. It would be quite worrying if we had three regulatory bodies, whereas supervisory bodies will provide the oversight that is required across Europe.

My hon. Friend is absolutely right and he makes his point very well, as ever.

We are determined that the EU should meet the economic challenges we all face head-on and swiftly. Otherwise, parts of Europe could face a lost decade of low growth and high unemployment, providing a drag on economic prospects for us all. That is why the Prime Minister wrote to heads of member states in October setting out a new vision for economic co-operation in Europe. He pointed out that the start of a new Commission term gave European leaders the opportunity to establish a new set of explicit and urgent economic priorities, which he called a

"European compact for jobs and growth".

We want next week's December European Council to agree to the need for such a compact-one where European countries co-ordinate their actions to tackle the key concerns of Europe's citizens, while at the same time taking steps to reform the effectiveness of our institutions. We believe such a compact must have six components. It should focus on creating jobs and equipping our work force with the skills they will need in the future. It needs to support those sectors of the economy that will deliver the growth of the future, particularly low-carbon, resource-efficient sectors. It should seek to remove the remaining barriers in the single market and provide companies with streamlined access to markets. It should strive for faster progress towards open global markets by pushing for the completion of the Doha round in 2010, while at the same time stepping up bilateral trade negotiations. A European compact for jobs and growth must also strengthen the banking system so that European financial markets and institutions can play a full role in supporting sustainable economic growth.

The Government believe such a compact will give European countries a progressive and ambitious framework in which to generate the economic prosperity of tomorrow. It will be a framework that builds on the actions of the G20 and provides greater coherence to the EU's economic policy, both internally and in a global context.

Does the Minister not acknowledge, however, the following somewhat contradictory position we find ourselves in in Europe? Countries on the European mainland have offered job subsidies during the recession, whereas our Government have studiously stood against that. It is all well and good having these grandiose statements about a compact or a contract, but British jobs have been sucked on to the mainland of Europe because countries there have protected their manufacturing industry, whereas we have let ours go.

I am not at all sure that my hon. Friend's characterisation of the labour markets across Europe is correct. It is true that sometimes it is more difficult to sack somebody in other parts of Europe, but it is also more difficult to employ somebody-to take somebody on-in other parts of Europe. Our flexible labour market has been an important part of ensuring the strength of the UK economy. It is also interesting that, whereas many people were predicting at the start of this year that we would have 3 million unemployed by the beginning of December, we have not reached that figure. That is because we have both taken concerted action in the UK and worked with countries that are our important trading partners across Europe to try to make sure jobs are protected.

One part of the compact to which the Minister refers is the European defence-technological industrial base. Will he accept that our country has more defence exports and capability than other European nations and that we are therefore especially at risk of job losses if this goes wrong? Will he further accept that, on procurement, we should deal far more with those countries with which we operate militarily, which means overwhelmingly the United States, and not the nation states of the European Union? Will he therefore take a sceptical view of this element of the compact, which serves to do down job prospects in this country and our defence needs?

No. I defer to nobody on the Conservative Benches on the protection we give and the efforts we make to ensure the long-term sustainability of our defence industry. Indeed, many of my constituents in south Wales work in a variety of firms engaged in different elements of the defence industry, and we seek to protect those important jobs. I do not accept the hon. Gentleman's suggestion that we do business only with our American colleagues. Of course, they are very important allies to us, but my experience-having seen British troops fighting alongside Dutch personnel, Italians, Spaniards, Danish personnel, the French, the Germans and those from many other countries-is that our alliances in Europe are significant and important to us.

I turn now to climate change. I said earlier that no economy can pretend that it is a hermetically sealed unit. The same is of course true of our environment and our climate, which is why we believe the ongoing discussions in Copenhagen are so important. Europe has a leading role to play in limiting the damaging effects of dangerous climate change and in leading global action as the world moves to a low-emission, low-carbon economy. The October European Council made important progress on climate finance, agreeing that developing countries are likely to require financial support amounting to about €100 billion per year by 2020 if they are successfully to mitigate, and adapt to, the effects of climate change. It also agreed that between €22 billion and €50 billion of this overall package should come from public finance.

The agreement on climate finance demonstrates the EU's continued leadership as a global actor, but we must keep working together to reach a coherent EU position on the key remaining issues. That includes the demonstration of EU readiness to move to a 30 per cent. emissions reduction target if other developed countries offer comparable commitments at Copenhagen. The December European Council, which meets towards the halfway point of the Copenhagen summit, offers the opportunity for European leaders to react positively should commitments from other developed countries warrant such a reaction. It remains vital that the EU continue to show leadership in achieving an ambitious global deal in Copenhagen. There is political momentum towards such a deal, but it needs continued nurturing and encouragement. Any political agreement must be supported with a clear timetable for delivering a full legal treaty as soon as possible. Slow progress is simply not enough if we are to avoid seeing the shadow of climate change darken all other issues on our agenda.

I had thought that I would have unanimous cross-party support on this issue, but I note that a former shadow Home Secretary has joined the ranks of the Tory deniers, saying that he thinks the science is only 80 per cent. proven. I must say that if I thought there was an 80 per cent. chance of being knocked down when I crossed the road, I would not cross the road. Similarly, the Tory grouping in the European Parliament has broken free: only last week, 18 members of the group, including two Tory MEPs and, most significantly, the hand-picked leader of the group, Michal Kaminski, voted against Tory policy to agree an 80 per cent. cut in emissions by 2050. I see some hang-dog faces on the other side of the House.

The Council will also be invited to adopt a new five-year strategy document, entitled the "Stockholm programme", setting out our high-level priorities in the field of justice and home affairs. Collaboration on justice and home affairs has already delivered major benefits for the citizens of this country. Since the European arrest warrant came into force in 2004, it has allowed the UK to extradite more than 1,000 fugitives to other member states and brought more than 350 wanted criminals to the UK to face justice, including Hussain Osman, one of those involved in the attempted attacks in London on 21 July 2005. I simply cannot understand why the Conservative party refuses to support the European arrest warrant.

How can this country continue to allow into Britain illegal immigrants who make their way into the EU, across the EU and then across the channel? What is the Minister doing with our European colleagues to stop these people on mainland Europe?

I am glad that the hon. Gentleman acknowledges that we have to work closely with our European allies to address this issue of immigration. However, I must point out that it is his party that wants complete segregation, with us acting wholly independently-the Conservatives want us hardly even to speak to our European allies-on these issues. I suggest to him, in the gentlest of ways, that if he were to revise his policy he might have a more effective way of dealing with migration issues.

I know that the Minister is trying to be gentle with Mr. Hollobone, but he does have a point. I went to visit the "jungle" camp in Calais before the French decided to break it up, and a lot of people there had travelled right across Europe to seek to get admission to the UK. I know that our Immigration Minister has worked with the French Immigration Minister, but only through closer co-operation with our European partners will we be able to get them to fulfil their responsibility on immigration, so that people do not go thousands of miles, sometimes paying people traffickers huge sums, just to get right to the end of the continent.

My right hon. Friend is absolutely right to say that co-operation is the key to this. We need to ensure that the whole of the European Union is working in concert. That is why we believe it is right to adopt not an ideological position on these elements, but an entirely pragmatic one, whereby we will opt in to justice and home affairs issues where it is in British interests to do so, and where that is not in our interests, we will leave the issue to one side. My argument against the Conservatives, which I believe my right hon. Friend shares, is that they sometimes adopt too ideological a position on these elements.

The Minister told the House a few minutes ago that the European arrest warrant has helped British crimefighters to extradite more than 350 criminals from European member state countries back to the UK. He needs to tell the House a little more about the sorts of people who are subject to the European arrest warrant, and can thus be brought to justice, because they are not minor criminals; they are extremely serious criminals-murderers, rapists, paedophiles and sex offenders. Those are the sorts of serious criminals that the European arrest warrant enables this country to bring to justice, and the warrant has enabled this country to close down the costa del crime in Spain, so why on earth do the Conservatives want to pull out of that arrangement?

The hon. Gentleman makes a fine point effectively. I have often tried to understand the Conservative position on this issue and failed; it seems to be another instance of dogma triumphing over practical solutions to the problems that we face.

It is important for Britain to co-operate far more closely with our neighbours in the European Union. Boiler room fraud, which prevails in Spain, basically involves fraudulently obtaining money from British investors to invest in shares that either are worthless or do not exist. Does the Minister know why the British police and the Spanish police cannot co-operate more closely on such matters to close down those fraudulent groups and bring them to justice?

I wholeheartedly agree with what the hon. Gentleman is saying, and I am glad that he shares the Government's policy on Europe and on how we should proceed on these issues. He is right to say that when British businesses and British citizens do business abroad they should have the same access to justice and a fair deal as citizens of the other member states in Europe. That is the whole point of the internal market, and it is why we strive to maintain it, whereas, sadly, his party wants to dismantle elements of it.

Given the interventions from the Conservative Benches, I should point out that the Conservatives in the European Parliament-and often the Conservatives in this place-have opposed measures such as Europol, the European arrest warrant and Eurojust, and other aspects of co-operation to tackle these serious criminals and the sorts of issues that Conservative Members have raised in their interventions. How can they raise those issues and then vote against all the measures that enable that co-operation to take place?

Well, as I say, sometimes the Conservative party's policy on Europe is unfathom-unspeakable.

Unpronounceable.

It is unpronounceable, unspeakable and unfathomable-but let me move on.

The Government believe that the Stockholm programme is an opportunity to build on successes in Europe, which is why we have been heavily engaged in the negotiations on the text from the very start. On child protection, the programme proposes the establishment of a network to tackle child abduction and arrangements to prevent people who are disqualified from working with children in one state from doing so in another. I am sure that all hon. Members would want to support that. On organised crime, the programme calls for an EU strategy, and the intention is to use the UK's organised crime strategy as the blueprint. In short, we believe this is a programme that the Prime Minister will be happy to adopt next week, because it will clearly further British interests in this field. It shows what we can achieve when we are at the heart of the EU, shaping the agenda according to our interests and values.

On enlargement, I think that most hon. Members will agree that Turkish membership of the EU is of strategic importance to the UK. The prospect of membership will help Turkey strengthen and modernise its democracy and economy, adding to the security and prosperity of the whole region. It offers us the opportunity to secure energy corridors and increase trade links with what we believe will be one of the world's top 10 economies.

On the subject of Turkey, it has been suggested that one of the reasons why the Germans and the French were so keen to see President Van Rompuy appointed was that he was deeply hostile to the entry of Turkey into the European Union and made a speech on those lines not so long ago. That, I understand, has upset the Turks. Would my hon. Friend care to comment on it?

The new President of the European Council has made it absolutely clear that he is not there to determine the policy of the Council but to enable it to function. We are strong supporters of Turkey, and he has indicated that he has no intention of using his position to block Turkish accession. I personally think that it would be bizarre if, after so many years of offering the prospect of membership of the European Union to Turkey if it changes many of its institutions to make them more democratic-if it abolishes the death penalty and so on-we were suddenly to slam the door in its face this December. I am very confident that that will not happen.

I thank the Minister for giving way, and I share his support for Turkey's accession. Does that not bring into sharp focus the issue of Cyprus? The Minister will know how important the next four months are for Cyprus in terms of reaching a settlement and becoming a reunited European member state, based on the UN framework. The Prime Minister is meeting Mr. Talat tomorrow, but what discussions are taking place with the Turkish Government, given their key influence in terms of solving the Cyprus problem?

The hon. Gentleman is absolutely right. I was asked questions about this issue on Tuesday, and I know that he has taken a long-term interest in it. I have had discussions with my counterpart, the Foreign Secretary has visited Ankara and the Prime Minister has spoken to Mr. Erdogan, and we have underlined at every stage our long-term commitment to Turkey's membership of the European Union, and also the need for Turkey to abide by the commitments that it made when it voluntarily signed the Ankara protocol. We believe that they were not tied to any other issue, and that they need to be adhered to to open the ports. That will be an important step in moving towards a resolution of the situation in Cyprus.

I have also met Mr. Christofias, as have several other Members of the House. I think that the hon. Member for Rayleigh, too, has visited Cyprus. We all think that this is a key moment in the history of Cyprus. Two leaders have staked their careers on achieving an outcome. I know that some people get depressed and some of the media get a bit angry because they think that the talks are happening in private and in secret, but sometimes talks of this nature, which are very sensitive, grow-a bit like mushrooms-best in the dark.

Does the Minister share my disquiet at the fact that some prominent members from Germany of the Group of the European People's Party have been critical of Turkey's accession? That is yet another good reason, I suspect, why the Conservatives are better off out of the EPP.

The hon. Gentleman will probably have to look at the views of every member of the European Conservatives and Reformists Group on Turkish accession. We know that there are difficulties with Turkey's accession. It will have to go through many different chapters before it can accede to the EU. We believe that, for strategic reasons, having a secular Muslim country in the EU would be good for our strategic interests and for diversifying energy routes and ensuring our energy security. Most significantly, I know that there are those who are frightened of Turkey because of migration issues, but I suspect that Turkey will be the Asian tiger on our doorstep. If we do not have Turkey in the EU-not facing west, but facing east-that will be a big mistake for us all.

Will my hon. Friend not accept that there has been a slight cooling of enthusiasm for enlargement in relation to Croatia, too? Fairly stringent conditions will be set out for Croatia to join, to ensure that it adheres to normal European standards. Has that not been influenced by the rush to embrace Bulgaria, where a degree of corruption and crime has caused worry in the EU?

My hon. Friend is right to imply that it is inappropriate to set an arbitrary timetable that then has to be met, come what may. It is important to have a process that is adhered to, so that each of the chapters is gone through on the path towards accession. That is far more sensible. I think that there is a song in "Guys and Dolls", which says something along the lines of, "Marry the man today, and change him later". We cannot do that in the EU. We have to ensure that the changes are made first, so that people come forward before the moment of accession with an economy, a legal system and all the chapters of the acquis completed properly. Countries need to do that before they accede.

Will the Minister give way?

I am reluctant to give way much more, but my right hon. Friend is very charming.

I am most grateful; the Minister has been generous to all Members in giving way today. Is not the point about new countries coming in that they need to be properly mentored? One of the issues with the big enlargement, which brought in Poland and the other eastern European countries, was that there were close relationships, such as that between Britain and Poland. One way over the system is to ensure that there is appropriate mentoring of new applicants by other countries.

My right hon. Friend makes a very good point. In some areas of some of the countries that we are talking about, there is a simple lack of capacity. In some instances, Britain has been able to provide some of that support through our technical expertise. The Westminster Foundation for Democracy has often been helpful and a range of different civic organisations across Europe have been able to play a significant role in bringing countries towards compliance. Does my hon. Friend Kelvin Hopkins wish to intervene, or is he fatigued?

indicated dissent.

Good, he is fatigued.

Croatia has continued to make progress in her accession negotiations. We look forward to welcoming Croatia into the EU once she has met the conditions necessary for membership. We also welcome and support the Commission's assessment that Macedonia is technically ready to open negotiations. We expect to be able to open negotiations with Iceland, too, soon.

Under the external relations agenda item, the December European Council will discuss the situation in Iran. It is becoming increasingly evident that Iran has no intention of meaningful engagement with the outside world on its nuclear programme at present. Iran has failed to follow through on much of what it agreed to at the meeting with the E3 plus 3 in Geneva in October. It has been censured by the board of governors of the International Atomic Energy Agency, and only last week Iran said that it was planning to expand its enrichment programme further. As a result, the time has come to consider what further measures may be needed to persuade Iran to enter into meaningful negotiations on that issue, the result of which must be Iranian compliance with the requirements both of the IAEA and of the five UN Security Council resolutions on this subject. The Council will also consider the human rights situation in Iran, including the crackdown, convictions and detentions following the disputed elections, and the continuing high rate of executions.

The Minister is making a very important point. Is he saying that the British Government will push the EU to push for sanctions at the UN?

We have to have a further round of talks next week. That is obviously one of the things that we have to consider. The situation in Iran seemingly gets worse day by day and week by week, and Iran has to comply with UN Security Council resolutions. We are clear about that. As a Back Bencher, I frequently brought up some of the human rights issues in Iran, too. They are sometimes forgotten in the wider debate, but none the less they are very significant. The UK will be pushing for the Council to send a strong message that Iran must take swift action to comply with its legal obligations both on its nuclear programme and on human rights.

I said earlier that Europe needs to focus far more clearly on the concerns of her citizens. That is, of course, precisely why I believe that it would be wrong to contemplate another round of treaty making in Brussels. Sadly, the Conservative leader does not agree. Two years ago he issued his clarion call, boldly announcing his "cast-iron guarantee" that he would put whatever treaty came out of the negotiations to a referendum, and putting his own signature to his article in The Sun. Well, we now know that he signs his cheques in invisible ink.

Will the Minister give way?

Will the Minister give way?

Will the Minister give way?

It's the three musketeers. I shall take the interventions in the order in which the hon. Gentlemen are sitting.

The Minister will know that I sat through the many days of debate in the House on the Lisbon treaty, so he will know that the Conservative party did what it said it would do. There was a vote in the House about having a referendum on the Lisbon treaty, and we all did what we said to our electorate in our manifestos that we would do- [ Interruption. ] I hear a sedentary comment from Mr. Drew, who I must add, to be fair, did vote in accordance with what he promised at the general election. However, most Labour Members did not do what they said to their electorate in 2005 that they would do, and instead voted against having a referendum. We did what we said we would; it is the Labour side that broke its promise.

I will take the next intervention.

My question is ditto.

And the third question?

My question is somewhat different. I see that the Minister has come to the end of his polemic. Will he say why he has not mentioned the European Defence Agency, European security and defence policy, or the EU external affairs set-up? Baroness Ashton is apparently heading the External Action Service, but she does not have a clue either, because she said in her speech a few days ago to the European Parliament that it would be a "huge challenge", a "one-stop shop" and a "unique selling point"-in other words, a whole load of waffle. She does not have the first idea what the organisation that she is meant to be heading is meant to be doing. This comes at a time when the EU is meant to be taking the lead in all sorts of theatres in which our troops are engaged. Perhaps the Minister would engage with those points, rather than making silly party political points.

The hon. Gentleman might take a look in the mirror in relation to that last comment-but let me deal first with Athos and Porthos.

Who are you?

Order. May I remind all right hon. and hon. Members that moderation in their use of language would be preferable in this debate?

I am not sure whether the hon. Members for Forest of Dean (Mr. Harper) and for Wellingborough (Mr. Bone) were among the people who originally intended not to vote for Mr. Cameron to be the leader of the Conservative party but changed their minds when a cast-iron guarantee was offered, or whether they were always in that camp. The truth of the matter, as everybody knows, is that the guarantee was made for political purposes within the Conservative party, and that now, two years later, the party has abandoned it: it is rusting on the scrap heap.

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I shall not give way to the hon. Gentleman again, if he does not mind. I have given way a considerable number of times, and I still have to reply to Dr. Murrison, let alone to the hon. Member for Wellingborough's ditto. The Conservative party cannot hide from the fact that its leader went out on a limb to make a categorical statement that will bear no fruit. I shall move on to some of the other issues that the hon. Member for Forest of Dean has raised in a moment.

The hon. Member for Westbury raised a few issues that will not be under discussion next week, which is why I have not referred to them in my contribution this afternoon. On the External Action Service, a draft paper has gone around that has been available to the European Scrutiny Committee and others, but it is not until the High Representative takes up her post that she will be able to put flesh on the bones of what the treaty provides for. I believe that the EAS will be an important tool for the effective advancement of the European Union, and therefore the British interest, around the world. The EU needs to be far more effective on many issues, such as relations with China, India and the growing economies of Mexico and Brazil. It also needs to be more effective at talking about human rights in countries that are normally of specific interest to France or to us, as well as at talking in the round on behalf of all member states. So I think that once the EAS is fully developed, it will be fully in the interests of the UK.

A little while ago, the Conservatives asked the Minister or his predecessor what the composition of the EU diplomatic corps-the EAS-would be. We wanted to know in particular which defence attachés would form part of it. Of course, we were particularly interested in British co-optees. Can the Minister enlighten us about that now that the Lisbon treaty has passed into law?

I am afraid that I cannot enlighten the hon. Gentleman on that at the moment. As I said earlier, a draft paper on the EAS has gone around, but it is very sketchy. Once the High Representative is fully in post, she will present a paper to the Council and there will then be two months for the European scrutiny Committees in the Commons and the Lords to examine it. We want to ensure that the EAS is put together rationally, that it does not seek to do things that should be done by member states, and that it reduces the inefficiencies in the current system, in which the Council has a desk officer for some countries, and several different directorates in the Commission also have desk officers for individual countries.

Will my hon. Friend the Minister help me with my arithmetic? If the High Representative does not take up her post until February, even though we have known that this has been coming for years, and if the European Scrutiny Committee will have two months to consider the proposals in terms of what precisely this will all mean, I have a strange feeling that in April, or even as early as the beginning of March, MPs might have something other than scrutiny on their minds. What provisions are there to allow the House to scrutinise the proposals if that time for scrutiny falls in the period of the general election?

My hon. Friend is wrong in one regard: the High Representative is already in post. She started on 1 December, and she and her staff will already be working on bringing forward a new text. We would like to see that as soon as possible so that the two Committees can examine it and come up with their suggestions.

I should have thought that hon. Members on both sides would have welcomed the fact that we have a Brit as the High Representative while this new service is being constructed. Britain is often late in the day on European issues, and so is unable to shape them at the early stage-but here we have a British Commissioner who can lead the creation of the EAS. That ought to give Britain and the Foreign and Commonwealth Office clout in deciding how it is shaped. That should be welcomed.

I wholeheartedly agree with the hon. Gentleman. Liberal and Labour policies on the EAS have been the same for several years; indeed, I would say that their and our argument has won the day in Europe on how the EAS should be set up so that Europe can play a more effective role on the global stage. None the less, it would be inappropriate to say that because we have a British High Representative, she will advance the British interest. [ Interruption. ] That is precisely what I said earlier.

That is not what the Prime Minister said.

It is interesting that virtually every member of the European Parliament whom I met last week and the week before wanted to have a British person performing this role. I think that was because they thought that the British argument on advancing the role of Europe on the global stage had won the day.

The reason for my sedentary intervention was that I had listened very carefully to a point that the Minister made at the beginning of his speech, when he said that Commissioners do not represent the countries of which they are nationals, but represent the Commission. That is not the impression that the Prime Minister has been giving, as my hon. Friend Alistair Burt has said. The Prime Minister has been going around saying that our getting a Briton to be the High Representative was in some way a triumph. If Baroness Ashton is to represent the Commission and the Council, how is that a triumph for Britain?

Much as I like the hon. Member for Forest of Dean, I do not think that he should sit there listening to Whips and articulating what they have just told him to say.

As I was saying earlier, we now know that the leader of the Conservative party signs his cheques in invisible ink. His promises are like dew that disappears the moment the sun comes out, and his cast-iron guarantee has been cast aside on the scrap heap. Of course, the Tory Front-Bench team knew that this was coming. That is why Dastardly and Muttley have been busy devising fiendishly clever wacky wheezes for the past couple of years. First off was the ruse to withdraw from the European People's Party; now the Tories find themselves shackled to a bunch of right-wing extremists with dodgy pasts. British business suffers because there is no British representation in the largest group in the European Parliament, and the Tories are completely marginalised in every debate in Europe. That is most cleverly symbolised by the fact that their offices are now in an annexe off the European Parliament.

The next ruse was to throw a scrap of red meat to the Euro-headbangers. The leader of the Conservative party says that he wants to repatriate powers to the UK, especially in the area of social policy- [ Interruption. ] I think that was a "Hear, hear!" over there. But he knows perfectly well that he would need 13 other countries to agree to holding an intergovernmental conference to consider amending the treaty again. If he managed that, he would need all 27 countries to agree a new deal, and if he managed that-which is almost impossible-he would need to persuade the European Parliament, because it has a new power under the Lisbon treaty to enforce a convention. Let us face it, Muttley has not got many friends in the European Parliament these days. No wonder David Frost, director general of the British Chambers of Commerce, has said:

"We do not believe that the Conservatives' new policy to opt out of European social and employment legislation is realistic, as it would require substantial UK concessions in return".

Now, the latest ruse is to introduce a new Bill that would assert Parliament's sovereignty over EU legislation. I fear that this too will be drafted in invisible ink. Parliament already is sovereign, as anybody who has studied the history of this place knows. It can repeal the European Communities Act 1972, if it wants to. It can leave the Union, but it should not.

I know that the hon. Member for Rayleigh knows all this, because he has admitted as much on television. All he could say in defence of the so-called sovereignty Bill was that it would

"send a signal both to the ECJ and the UK Supreme Court".

I can just see him busily fanning his smoke signals to Strasbourg now, but I suspect this is more of a smokescreen than a smoke signal. No wonder Roger Helmer MEP said

"what we have is essentially a cosmetic policy".

It is clear that December's European Council will see Europe's leaders getting on with business and tackling tough issues of importance to people across Europe. It will mark the end of the institutional introspection that has dominated the Union in the past few years, and the beginning of a new era for the EU-an era focused on taking action where co-operation between European states can deliver results, an era of renewed belief in the ability of member states acting collectively to create new opportunities for the people of Europe, and an era in which Europe has a central role in global decision making.

That is why Britain is right to position itself at the heart of European decision making. It is why we must retain and enhance our ability to influence in Europe, and why we should continue to push for Europe to strengthen its ability to influence globally. Active British engagement in Europe is good for Britain, good for Europe, and has a positive effect globally. That is why this Government are determined that the UK should be leading and shaping European policy, now and in the future.

I shall begin by dealing with a number of specific issues of European concern. First, Iran: one of the most important matters facing the nations of Europe today, and one that will rightly be discussed at the European Council, is the question of our relations with Iran.

We are deeply concerned about the Iranian nuclear programme. For more than a year Iran has refused to engage seriously with either the US or the International Atomic Energy Agency, despite the historic offer of engagement from President Obama. Given that the IAEA director recently said:

"We have effectively reached a dead end" on Iran, we are fast approaching a point where decisions about new sanctions will have to be made. Unless Iran changes course dramatically in the coming weeks, Conservatives believe that new UN and EU sanctions should be adopted in the new year as a matter of urgency. Those sanctions should include, at the very least, a total ban on arms sales to Iran, a tough new UN inspection regime, a ban on new investment in Iranian oil and gas, and action against the Iranian Islamic Revolutionary Guard Corps. The failure to deliver on such pledges is one reason why Iran feels that it can challenge the international community with impunity, since it sees little concrete demonstration of will to prevent it from going down that path. That must change, and we need concerted EU action in that area. The Minister also realised that this is a very important topic, and I hope that when he winds up he will be able to indicate a timetable that the Government envisage for new sanctions against Iran.

Secondly, Bosnia: the situation in Bosnia and Herzegovina remains of extreme concern to us. The country is not making progress. The international community seems not to have a proper strategy and the way forward remains most unclear.

On Monday, I discussed with the Minister a new stabilisation and association agreement between the EU and Montenegro. I highlighted the fact that although there is a long way to go-and progress to date is certainly imperfect-a way forward into the Euro-Atlantic world is possible to imagine. By contrast, in Bosnia and Herzegovina the road ahead is simply blocked by inaction, and in some cases by the deliberate blocking of urgent constitutional reform. It is hugely disappointing that the SAA that was agreed with Bosnia has led to few real reforms and that important conditions remain unfulfilled.

There is now a real danger that the progress made since the 1995 Dayton peace accords may be reversed. The international community-in particular, the US and EU member states-must remain vigilant. Plans to replace the office of the High Representative with an EU special representative and to downgrade EUFOR should not be implemented until Bosnia and Herzegovina can function on its own and a genuine process of constitutional reform and the allocation of state and defence property has taken place.

If agreement can be reached, Bosnia can move forward into a process that could eventually lead to EU membership. The potential gains for the Bosnian people are huge, matched only by the potential costs of failure. It is time for the Bosnian politicians to put the interests of their people above those of sectional interests and allow the state and people to progress.

Thirdly, Cyprus: we have just celebrated the 20th anniversary of the fall of the Berlin wall, one of the happiest moments in Europe's recent history, yet on the island of Cyprus there is still a divided European capital city. The Minister and I have both visited Cyprus this year, and we would both like to see a settlement achieved. The current set of talks is now over a year old, and some progress has undoubtedly been made. President Christofias and Mr. Talat are meeting regularly and have discussed a range of issues, including the most contentious. There remain reasons to be optimistic that a lasting settlement can be made, but there are some clouds on the horizon.

Public opinion on both sides shows signs of shifting away from support for reunification. Further, the April election in Cyprus's Turkish community might not produce a leader as committed to reunification as Mr. Talat. Further delay in reaching a settlement could risk missing the current opening in the clouds. We recommend that the Government use the European Council meeting as an opportunity to stress to the Cypriot Government our support for a settlement and the need for both sides to show leadership in order to reach a deal.

At the forthcoming EU summit, the Government should also continue to support the principle of Turkish membership of the EU. We should be prepared to remind our European partners how damaging it could be if Turkey ever came to believe that there was no prospect of accession to the EU. We should also be prepared to raise with Ankara the need to grasp this opportunity to achieve a lasting settlement in Cyprus, perhaps through its demonstrating some greater flexibility that could be to the ultimate benefit of both Turkish and Greek Cypriots alike.

Fourthly, the Copenhagen summit begins on Monday. It is of historic importance. It is an opportunity for the world to take bold action to deal with the real danger of climate change, and tackling climate change is rightly at the top of the EU's agenda. Any such successor deal agreed to at Copenhagen must be a rigorous one that binds the world in a common commitment to keep the rise in global temperatures to below 2° C. Any such deal must find an international mechanism to help people in the world's poorest countries protect themselves against future floods and famine, and stop the destruction of the rainforest-the green lungs of the planet. We hope that, with our European partners, we shall obtain such an outcome next week.

Reference was made to a vote on climate change in the European Parliament last week. For the record, I should like to add that 13 members of the Liberal Democrats' Alliance of Liberals and Democrats for Europe group abstained on the motion, while five members of the socialist group-including a number of Polish MEPs with whom the Labour party is allied-voted against. I think that it is important to hear about the voting records of all sides in this particular debate.

Does my hon. Friend agree that if Members of the European Parliament wish to contribute to preventing climate change, the best thing for them to do is to stop the awful circus of travelling between Strasbourg and Brussels once a month? They should settle down in Brussels and stop that ludicrous waste of money and energy.

I agree with my hon. Friend. There is a tremendous environmental cost in moving from Brussels to Strasbourg. Outside most MEPs' offices at the European Parliament in Brussels, as my hon. Friend Mr. Goodwill will recall, are what are called Strasbourg boxes. Once a month, MEPs put everything in the boxes, travel down to Strasbourg, unpack, carry on there, and then repack them and come back. If MEPs of all parties are really committed to fighting climate change, they could send a powerful signal and save a tremendous amount of carbon by not travelling from Brussels to Strasbourg every time. My hon. Friend makes a good point.

Far be it from me to defend the European Parliament, but that is one of the few matters on which the Brits suggested that we move to qualified majority voting. However, certain other Governments thought that the seats where the European Parliament meets ought to remain decided by unanimity; it is not entirely MEPs' fault.

I realise that the fact that we have two seats is established within the treaty base and would require unanimity to change. The hon. Lady follows such matters closely, and she is right. However, I reiterate that that does not mean that we should not change it.

The major development since the House last debated European affairs is the entry into force of the Lisbon treaty. It is worth recording the original terms set for the project by the Laeken declaration of December 2001. That document stated that

"the European institutions must be brought closer to its citizens" and that the peoples of Europe

"feel that deals are all too often cut out of their sight".

The declaration called for more democratic legitimacy in EU institutions. It is now clear that in those original terms, at least as far as this country is concerned, the treaty project has been a lamentable failure.

The treaty's entry into force is a matter of regret to Conservatives and should be to the Government as well, if they were in any way consistent. It is a matter of public record that this Government sought to make 275 amendments to the original EU constitution's text, to which it is almost universally agreed that the Lisbon treaty is substantially equivalent. Of those, 27 were accepted. A treaty is now in place, but the Government objected profoundly to many of its provisions in the first place.

One hears the phrase about bringing Europe closer to its citizens across the whole European Union, yet on the occasions when it is brought closer to its citizens-through referendums in France and Holland, in Sweden on the euro before that, and perhaps in Britain in future-the citizens of Europe tend to take a negative, rather than a positive, view.

We should not forget the first Irish referendum either, if the hon. Gentleman is compiling a list.

Or indeed the Spanish referendum.

Would that be the same Spain that is not a member of the G20?

One immediate change brought about by the Lisbon treaty is the establishment of the new presidency of the European Council and the enhanced High Representative. We in this party are pleased that our view that the President of the European Council should be a chairman and not a chief was widely shared in many European capitals. As the Prime Minister was forced to admit, the role of President of the Council has now been redefined.

It would also be churlish not to express our gratitude to the Foreign Secretary for his decision to champion Tony Blair in his campaign for the presidency. It was strongly our view that the former Prime Minister was exactly the wrong man for the job. Not only would his appointment dramatise the treaty's lack of democratic legitimacy, but to make so ambitious and limelight-hungry a politician the office's formative first occupant-he is even more so than the current Minister for Europe-would have shaped the post as an unconstructive centralising institution.

In the EU, the front-runner seldom gets the job. By doing everything that he could to make Tony Blair the front-runner, the Foreign Secretary did a great deal to undermine his case. Characterising him as the man who could stop the traffic in Washington and Moscow helpfully crystallised everything that many countries did not want the President to be and implicitly put down the other candidates. The Prime Minister's people skills are obviously rubbing off on the Foreign Secretary.

We congratulate Baroness Ashton on her appointment. It is interesting that she was the Government's third or even fourth choice for the job-I will return to that in a minute-but we appreciate the appointment of someone able to work across the political divide. Some have criticised her for a lack of experience in foreign policy, but we know that she possesses a keen intelligence, and we are prepared to work with her in the British national interest.

As my right hon. Friend Mr. Hague warned the Government before the summit, however, they should have sought for Britain not the position of President of the Council or High Representative, but a major economic portfolio in the European Commission. Recent events have borne out the wisdom of that warning, as Lord Mandelson belatedly grasped. The whole saga of the appointments to the European Commission and other positions demonstrates this Government's lack of influence in the EU, lack of strategy and disunity.

The Government received no support for Tony Blair's candidacy from their socialist allies. They were talked into seeking the High Representative position. It is reported that the Prime Minister agreed not because he thought that Britain's interests would thus be best served but because he thought that it might secure better headlines. According to one key figure, there were two groups in the Government: those who made the real-world argument that the UK's interests would be best served by securing a strong economic portfolio to protect the City, and the media managers. It is, sadly, no surprise that this Prime Minister preferred to listen to the media managers. Once again, his preference for short-term personal political calculation has trumped the national interest.

Many will also find it extraordinary that the Prime Minister of this country was reduced to accepting his third choice of High Representative before he could find someone acceptable to the Party of European Socialists. They will find it even more extraordinary that the First Secretary of State, it is said, conducted his own campaign for the job and that even with his skills he was unsuccessful. As No. 10 was trying to push one set of candidates for the job, it appears that the First Secretary was trying to press another, namely himself. When the Minister winds up, will he tell the House whether the Foreign Office supported Lord Mandelson in his efforts to bow out of this Government for a new berth in Brussels?

I fear that the hon. Gentleman is coming across as a smaller and less tanned Simon Cowell from "The X Factor" rather than as a shadow Minister debating the facts of the case. He is discussing personalities and not what has come out of the process. Does he not welcome the fact that the Council has clearly decided to downgrade the presidency to mere chairmanship of a committee, he expressed fears during the debate on Lisbon that a super-powerful President would speak for Europe and take away the power of the Prime Ministers of the European national Parliaments? He cannot have it both ways.

I will reply to the Chairman of the European Scrutiny Committee, who always takes a close interest in these debates and is, as usual, in his place, where we expect him to be. There are questions for the Government to answer. They ask whether we have influence in Europe relative to them. They put tremendous effort into advocating that Tony Blair be President of the Council. The Prime Minister backed him publicly for weeks. We said publicly and plainly that we did not believe that he was the best candidate for the job, setting out our reasons clearly. At the end of the day, it was apparent that many European Union countries agreed with us and not with the Government, or indeed the Prime Minister, so we are reluctant to take any lectures from Labour Members about influence in Europe.

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I will give way to my hon. Friend, and then once more to the Chairman of the Select Committee, out of respect for him.

In relation to the question that my hon. Friend just answered, has he considered what happened at the moment when former Prime Minister Tony Blair resigned in mid-June 2007? The Foreign Secretary was left out of the loop in discussions as we moved towards signing the Lisbon treaty. The matter was taken over entirely by the Prime Minister. Furthermore, the so-called mandate, to which the current Prime Minister clearly objected originally, suddenly went through. The net result was that the Prime Minister at the time, Tony Blair, got himself into a position in which the Lisbon treaty would be signed in return for the current Prime Minister's agreement that he would allow the treaty to pass without a referendum, therefore effectively betraying the British people.

Labour's denial of a referendum betrayed the British people-that is clear-but it is not unknown for this Government's Foreign Secretary and the Foreign Office to be isolated. Another example is the bizarre position that when No. 10 first tried to press for Tony Blair, the Foreign Office agreed, even though the Minister for Europe, notoriously, put together a letter signed by Labour MPs a couple of years ago to try to get Blair to stand down as Prime Minister and leader of the Labour party.

The FCO was then out of the loop: No. 10 was pressing for Baroness Ashton to become the High Representative, and over in the First Secretary's apartments the phones were buzzing because he was pressing the case for himself. The Foreign Office was isolated not only in Europe, but in Whitehall. Increasingly, the Foreign Secretary feels nervous because, it is reported, the First Secretary of State would like his job. I wonder whether the Minister would like to comment on that when he winds up the debate later today.

I promised to give way to the Chairman of the European Scrutiny Committee.

I respect the hon. Gentleman, his diligence and the fact that he normally deals with matters of substance, so I am still troubled by his wish to dance around on the issue of personality. It may play better in the press, but it is not what this issue is about. Will he at least concede the fact that the European Council of Prime Ministers decided to downgrade the position of President of the Council to that of chairman of a committee, and not to give the position the power feared by those of us who did not wish to have a President of Europe who spoke on behalf of Europe and took over from the Prime Ministers in national Parliaments?

I have been called Dastardly about three times in this debate.

Muttley.

It was Muttley. Anyway, Michael Connarty can hardly accuse me of reducing the debate to personalities. The Minister has been reducing it to cartoon characters, and he seems to call that parliamentary debate.

My hon. Friend made the case about the way in which the Foreign Office has been isolated in Whitehall. That was an issue of policy and substance. It is very interesting to note that in an interview published on labourlist.org, the former Minister for Europe, Caroline Flint, made it clear that when she was in that position, with the right to attend Cabinet when Europe was discussed, she spent

"eight months without being invited to discuss Europe at full cabinet meetings and never being invited at all to political cabinet meetings."

It seems to me that having a Europe Minister who is never invited to discuss Europe at Cabinet does not say much for the seriousness of any Foreign Office influence within this Government.

My hon. Friend makes a very good point, and it will be interesting to see whether the Minister wants to say anything about that when he winds up the debate later this afternoon. I suspect probably not. As I warm to that theme, I note that there has been a very high turnover of Europe Ministers in the Labour party. I have been doing this job for about two and a half years, which makes me a comparative veteran. I have shadowed four different Europe Ministers in that time, and I think that Labour is on to its 12th Europe Minister since 1997.

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Here comes another one. If we wanted to hold a reunion of all the Labour Europe Ministers, we would have to book quite a large room. The Government lecture us on influence in Europe, but, if they are trying to make friends and influence people, why do they keep rotating that job so fast?

Will the hon. Gentleman give way?

I am sorely tempted-but no.

I was going to help you.

Okay, you've talked me into it. [Interruption.]

Order. Could we please have this debate conducted properly? Let us leave all the characters out-wherever they come from.

I am most grateful, Madam Deputy Speaker, and I shall leave out all the characters.

The hon. Gentleman is absolutely right: it is important that Ministers be in position for a time. I hope very much that the new Minister for Europe will be in position for a long time, because that is how relations with other countries are built up. I also agree that the Europe Minister's job ought to be a full Cabinet position.

I am grateful for those comments-particularly the last one. I was kind enough to let the right hon. Gentleman intervene, so if he were to drop a line to my right hon. Friend Mr. Cameron I would be indebted unto him for that.

Returning to the First Secretary of State and the business of appointments, I think that the First Secretary realised, after he did not get the High Representative's job, that a further blunder had been made. He wrote in the Financial Times-a week after my right hon. Friend the Member for Richmond, Yorks had written in that publication-that

"the distribution of the big economic portfolios in the next European Commission" is

"critically important...The men and women that José Manuel Barroso, Commission president, appoints to key dossiers such as competition, the internal market and trade will carry much weight in defining the direction of EU policy.

We know what followed. Against this Government's belated objections, Michel Barnier was appointed as the Internal Market Commissioner. Against this Government's further objections, his portfolio includes financial services. Both the Prime Minister and the President of France had a number of conversations with Mr. Barroso about that portfolio, and it is clear that the Commission President took a great deal more notice of his conversations with the French President than he did of those with our Prime Minister. The French President now says that

"the English are big losers in this affair" and that

"French ideas for regulation are triumphing in Europe".

It is clear that this Government have been comprehensively outmanoeuvred by the French, and that this country is now left playing catch-up.

That leads us on to the financial services industry and its relations with the EU. The financial services industry is a vital national economic interest, and to further it we need to learn the lessons from the crisis and improve the global co-ordination of supervision and regulation. However, as Mervyn King said,

"banks are global in life, but national in death".

Bank failures can have fiscal consequences-something that we are only too familiar with in the United Kingdom. That means not only that European co-operation is essential for the promotion of financial stability, but that we must safeguard taxpayers' interests when it comes to decisions that the new European authorities make. That must remain the clearest of red lines.

Yesterday's ECOFIN conclusions seemed to be clear:

"decisions taken by the ESAs"

-European Supervisory authorities-

"should not impinge in any way on the fiscal responsibilities of the member states."

The Chancellor claims now to have secured his red line, but that represents staggering complacency when we look beyond the press release and into the detail. The new supervisory bodies can make decisions that have a fiscal impact either in a crisis or as a consequence of binding mediation. However, to overturn such decisions, the UK will need to secure the support of a majority of member states under qualified majority voting. We have no veto over those decisions, and as one EU official put it:

"The real concession is that burden of proof will rest with Britain".

That makes it very clear that the real loser from yesterday is the Chancellor of the Exchequer and the British taxpayer.

Sadly, that complacency is indicative of the Government's broader approach. We have seen it before over the alternative investment fund managers directive and the appointment of the Internal Market Commissioner.

I want to correct a mistake that I think the hon. Gentleman has made-probably because he was going on an earlier draft, rather than on the conclusions yesterday. The situation to which he refers would not involve a qualified majority; it would involve a simple majority.

If that point is correct, I accept it. Nevertheless, the principle still exists whereby we do not have a veto, and the burden of proof still lies with Britain in that situation.

As I was saying, that complacency is indicative of how the Government under-performed on the AIFM directive and on the appointment of the Internal Market Commissioner. There is a pattern of the Government failing to get stuck in until it is too late. That is why we would appoint a senior Treasury Minister to spend as much time as needed in Brussels, and a Conservative Chancellor would actually attend ECOFIN meetings to restore our credibility and authority at the negotiating table. It is time that the UK took its responsibilities more seriously in that area.

We need a better approach in Europe, and that includes sorting out the mess that we have been left with by Labour over the Lisbon treaty. My right hon. Friend the Leader of the Opposition has set out our proposals to sort out what we can of that situation. Our domestic proposals include a referendum lock on any future treaty that transfers competences from Britain to the EU; a primary legislation requirement for the use of any passerelle or bridging clause; and a sovereignty Bill to enshrine in law where ultimate legislative authority lies-the Kompetenz-Kompetenz issue, as German lawyers call it. Those proposals will greatly strengthen the EU's democratic accountability in this country and ensure that a treaty never again hands areas of power from Britain to the EU without popular consent.

We have also set out proposals for three British guarantees to fix the most damaging points of the Lisbon treaty and other outstanding issues where the EU's remit is unnecessary and problematic. Those proposals include a proper opt-out from the charter of fundamental rights, a restoration of the European Court of Justice's limited jurisdiction over criminal justice, and the return of Britain's opt-out from social and employment legislation in those areas that have proved most damaging to our economy and public services.

Will the hon. Gentleman give way?

In a moment.

Keith Vaz, in his memorable time as Minister for Europe, famously said that the charter would have no more legal weight than T he Beano. The former Prime Minister Tony Blair told this House in 2007 that it was

"absolutely clear that we have an opt-out from both the charter and judicial and home affairs".-[ Hansard, 25 June 2007; Vol. 462, c. 37.]

The Government were subsequently forced to admit that they had obtained not an opt-out but a clarification, and that admission was made in exchanges with the European Scrutiny Committee, as I recall. So we ought to expect the Government's support on this point, which is about establishing in reality what the Government wrongly claimed to have obtained in the first place. On that point, I give way to the Minister.

I wanted to intervene on a previous issue. I was going to correct the hon. Gentleman again on the passerelle point; as he knows perfectly well, that is already provided for in UK legislation. May I ask him a very simple question? Does he believe that any of the requirements for which he is arguing would need treaties to be changed?

The passerelles require unanimity, but as we argued when we debated the Lisbon treaty, passerelles should be enacted only on the basis of primary legislation in this Parliament. The Government did not accept that; as I recall, they left things so that passerelles could be enacted through what would effectively be a statutory instrument, after a debate of only 90 minutes.

That is a vote.

It is, but it is not primary legislation; that is the difference-allow me to correct the Minister on that point. Allow me also to correct him on the charter of fundamental rights, which I was just discussing. The Czechs asked for an opt-out from the charter of fundamental rights. They were told that the Council gave them a political decision to achieve that and they were then told that that could be attached to a future accession treaty as a protocol, which would give the opt-out full legal weight in international law. There is already a precedent for that methodology, and we would seek to follow it; if it can be offered to the Czechs, it can be offered to us.

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I give way one more time to the Chairman of the European Scrutiny Committee.

Unfortunately, there are no other Select Committee Chairmen here, but if there were, they could confirm that the Prime Minister gave a categorical assurance to the Liaison Committee that passerelles would be enacted only following a decision on the Floor of the House. In fact, only on the basis of a positive resolution in this House and the House of Lords would passerelles be enacted, and would a veto be given away in favour of qualified majority voting. Our Government have given a guarantee that they would not vote on a passerelle until such a positive resolution was carried in both Houses.

I have not been in the House for as long as the hon. Gentleman, but I know the difference between what he is describing and an Act of Parliament. We would require a full Act of Parliament before any passerelle was enacted; that is a significant difference. The issue could be debated at length in this House and the other place, and it would go through a Committee stage. Thus, giving up a passerelle, which we are not minded to do in any event, would be subject to full parliamentary scrutiny rather than being rammed through the House with minimal debate on a three-line Whip.

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I give way to my hon. Friend.

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I have given way quite a few times. I give way to my hon. Friend, who I believe may know a little about the issue.

The sovereignty Act that we are proposing also deals with the passerelle question. I do not want to put my hon. Friend directly on the spot, because this is a matter for the leader of our party as well as for the party as a whole, but does he not tend to agree with me-I urge him to agree with me very much-that such a sovereignty Bill would have to be totally comprehensive to ensure that we reaffirmed the sovereignty of this Parliament? We would need to guarantee that, as with other supremacy of Parliament amendments put forward by me-amendments that have already been endorsed by our leadership-any future changes that we may wish to make in relation to European legislation would be carried through.

The point of a sovereignty Bill is to guarantee the ultimate sovereignty of Parliament. My hon. Friend and I have discussed the matter before and I suspect that we will do so again. Nevertheless, the Minister has said that he does not think that there is a real issue. I offer him the judgment of the German constitutional court, not a court in this country. When the Germans looked at the issue while ratifying the Lisbon treaty, their judicial system raised serious flags about the growing influence of the European Court of Justice. The Minister may not agree with that court, but he cannot pretend that that judgment did not take place. There are issues that need to be addressed.

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I shall make a bit of progress now; I have given way many times.

We ought also to expect Labour support for limiting the remit of the European Court of Justice over criminal justice. Three years ago, John Reid, then Home Secretary, said that the Government's view was that the EU's competence on that issue should not be extended. We plan to reinstate that position, which the Government have so weakly abandoned.

This is likely to be the last European affairs debate before the general election. It takes place against a certain background: the European Union's standing in this country has never been lower, and I regret that fact. The explanation is simple. Under this Government, the European Union has become something that is often perceived to be done to the British people, not by them. More decisions to which the British people have never assented are now being taken at European level.

If, as I hope, the British people entrust my party with the government of the country at the next election, our task will be to put that right, to show that powers can be returned from the EU to a member state, to put Britain's role in the EU on a more positive footing and to give British leadership on the great issues that European countries face together-energy security, climate change, global poverty and global competitiveness. It will be our task to give the British people a European policy in which they can believe. We will seek a positive mandate for those changes at the general election. If that mandate is granted, we will seek to achieve them in government thereafter.

I am grateful to be called to speak in this debate. Unfortunately, when the financial regulations were being debated I was leading the European Scrutiny Committee on a pre-presidency visit to Madrid; I would like to have spoken during those debates. The Chair of the Treasury Committee was also elsewhere with his Committee, and he might have made a vital contribution.

The House wishes to pass a motion stating that it has considered the matter of European affairs. I hope it will agree that such consideration would not be complete if we did not give consideration to the process of parliamentary scrutiny. I shall come to that issue, in my capacity not only as Chair of the European Scrutiny Committee but as one who has an interest in the effect of the Lisbon treaty. I described that treaty as a tipping point, and I stand by that. It has changed the geography and processes of not only what will happen in Brussels but, I hope, what will happen in this House and elsewhere.

First, I should like to raise a few matters of substance to underscore the fact that we need changes to the structures to assist effective scrutiny. I turn to what I think are agreed to be the three new supervisory or watchdog committees on insurance, banking and the securities market in Europe. Those who, like me, have followed the process for many years will see that they are just beefed-up Lamfalussy committees. There was already the Lamfalussy supervision process, which proved inadequate, just as the supervision and regulation in this country was inadequate for dealing with the inventiveness and gambling of the banking, insurance and derivatives markets that brought this and many other countries to the serious position they are in, with massive public debt and taxpayers owning many of the banks.

For some reason, we have been unable to prevent banks from doing certain things; I noticed that Royal Bank of Scotland has put aside £940 million for bonuses, yet it has just been revealed that it might be exposed to the tune of £2 billion to the Dubai debacle; I think that the total is £5 billion among British banks, even with the latest scrutiny process.

The agreement on a European systemic risk board has not been mentioned. That would be a gathering of all the EU's 27 central bankers to try to do something consistently across Europe. I do not wish to score points about the weakness of Government or the failures of the regulatory authorities at our own level, but we should welcome that board. Together with the Americans, with the gambling nature of their banking, insurance and derivatives markets, we almost brought down the world's economies to the same degree as happened during the great depression.

I know that Opposition Members would not say this, but, as was mentioned in debates before the Council last November, without our Prime Minister leading Europe and giving a clear lead to the President of the United States, we would have ended up in a massive depression. It appears to me that allowing some other people a say and oversight in respect of the behaviour of our banking, insurance and derivatives markets is not very much to give up from London.

The European Scrutiny Committee will retain-and, I hope, use more and more-the right to call for an opinion from a Select Committee that specialises in another area of policy. We called for an opinion from the Treasury Committee, and that led to its inquiry and, I hope, fed some common sense into the debate on Tuesday.

I want to mention some matters that may seem minor but that are important to our constituents. If most of them read this debate up until this point, they would wonder whether Front Benchers live in the same world as they do. It was point scoring and personalising-more like "The X Factor" than a serious debate about what affects people's lives. For example, in 2005 the European Commission ruled that it was illegal for European citizens not to be paid the same wages and for people in the shipping industry in my area of Scotland not to be given the minimum wage. That is an important matter that was debated yesterday in relation to an amendment to the Equality Bill. However, it is still possible to use non-EU citizens, and such people are being paid £1.27 to sail boats between the islands and the mainland of Scotland. The Commission could ban that for people in the EU so that it would not happen to people who came from the A8 accession countries to work in the offshore industries. My constituents would welcome that. The TUC and the Scottish TUC are campaigning strongly to have such a provision extended to everyone through the Race Relations Act 1976. [ Interruption. ] I have just been told that there is a 15-minute time limit on speeches. That is not necessarily welcome, but useful to know.

Another apparently minor matter is the use of the European globalisation fund, which I have raised with the Scotland Secretary. That has become a fund into which people from different countries are dipping to mitigate the effects of recession, not necessarily the effects of the globalisation process. In the European Scrutiny Committee, we have insisted that such instances be reported to the House, in what we call an "A" brief, whenever they occur, because they are matters of interest. Some have been very serious. For example, in the automotive industry, when Saab lost more than 4,000 jobs Sweden asked for a contribution from the fund. Ireland got a substantial sum of money when Dell decided to pull out one of its factories. It was remarkable to find that the Netherlands got about £1 million following 570 redundancies in a construction company. Given the massive loss of employment in this country, if that is what the money is available for, we should be asking for it. Every time these funds are paid out, there is a net contribution from the UK. We should be similarly asking for funds, but for some reason the Government are not doing so. I have particularly made the point that we are losing to Ireland 500 jobs at Bausch and Lomb, which makes contact lenses. We hear that Ireland is getting money, while we are losing jobs. There is something wrong with that, and we should look at it seriously.

Let me turn to matters in the Committee's remit that we have been raising with the Government. First, I want to talk about enlargement. Most recently, that has centred on learning the lessons of the accession of Bulgaria and Romania, both of which, in the estimation not only of our Committee but of the Commission, still have an enormous amount of work to do in creating an independent judiciary and a system of governance that can and will tackle corruption and organised crime. We said at the time that those countries were allowed in too early, and they have been backsliding since. We have recently expressed to the Government a firm view about Croatia, which is next in line unless it is over-leaped by Iceland, which is looking for a rescue package for its financial crash. We say that Croatia must demonstrate actual conditionality. In other words, before accession, it must have a strong track record of effective implementation of the necessary machinery and success in tackling the ills that continue to blight it-that is, a fully functioning legal system and a track record of tackling corruption at the highest level.

I am grateful to my hon. Friend for bringing a sober approach to the debate without references to "Guys and Dolls", "Wacky Races", or any other such films-wonderful though they are, of course. Has his Committee considered the possibility of a formal twinning arrangement between existing member states and applicant countries or those that are new entrants to the EU? One of the problems is that once they join, we leave them very much on their own, but they need that kind of support. We welcomed Romania and Bulgaria entering, although I take his point about the timetable- but when such countries join they need additional help.

That is a very sound request and I hope the Government have listened to it. I am not sure that that facility does not already exist. I would hope that our diplomatic and foreign services are helping countries as they approach membership of the EU, and then afterwards when they are in it. From the parliamentary point of view, we have warmly welcomed the fact that our Clerks often go to countries that wish to enter, particularly to look at how they scrutinise and deal with European business. Having returned yesterday from Madrid, I have to say that we are the envy of most other countries, where scrutiny does not exist in the way it does here.

I will give a few pieces of evidence from the material I am drafting for our annual report. In our Committee, we have dealt with more than 920 documents coming from the EU. We have written reports, 456 of which have been published online and also given to this Parliament. We have referred 72 of those documents for debate in our European Committees, and we have called for, and had, debates on the Floor of the House on four occasions in the past year. Apart from those that claim to be mandating Parliaments-those of Sweden, Finland and Denmark-I do not think any other Parliament can show a better track record on Government scrutiny.

Does the hon. Gentleman agree that it might be more effective if Parliament got involved at an earlier stage, because in many cases the legislation is almost done and dusted before it comes to this place?

My hon. Friend-I regard him as a friend-has a very balanced view about these matters and many others that we share an interest in. I think we have a potential for earlier intervention that may be denied us if some of our Committee's requests are not listened to by the Government.

We are concerned about what is happening post-Lisbon; I am sure that Opposition Front Benchers will say, "We told you so." The main problem is that the Lisbon treaty creates a whole new concept of non-legislative Acts. Those need to be properly scrutinised. They will be decisions of the Council rather than legislative Acts. Unfortunately, Lisbon does not refer to their having to be scrutinised in any of the processes. We are requesting the policy papers that lead to the common foreign and security policy, which has been a concern of many Members, and the European security and defence policy, which will now not be legislative Acts. We are asking for a change in our Standing Orders specifically to say that legislative Acts and non-legislative Acts will be referred to our Committee for the scrutiny process.

Another aspect that we are concerned about is the new European External Action Service, which will become an acronym of some kind and we will not remember what it means two months from now. Again, that was required on the basis of a Council decision, and it needs to be properly scrutinised. There are major uncertainties about the External Action Service. Will it be a Commission entity, or will it sit somewhere indeterminate between Council references and Commission references? We have to get that cleared up. What will its external delegations do? Presumably they will promulgate the new common security and defence policy, but under which supervision method, at European level and at national Parliament level?

There has always been a mystery about this. A previous Defence Secretary and Europe Minister has defended the right of the Government not to give our Committee access to these papers on the ground that what is happening in foreign policy and defence is far too sensitive for Parliament to know about, which is of course ridiculous. Perhaps I am paraphrasing what the former Minister said, but I am certainly quite clear about what he meant. [Interruption.] Add the two ministerial positions together to work out which former Minister it was-that person held both. I am not into personalities, I am much more into the substance of what is said.

Will the new European External Action Service missions be responsible for delivering EU aid, and how will that cut across the role of the Department for International Development and the interest of national Parliaments? All that must be brought to us for proper scrutiny before the Council's decision is reached, and I hope that the Government will take those matters on board in the forthcoming negotiations and discussions about what we should do to our Standing Orders.

There is also the problem of derogations from the eight-week period for parliamentary scrutiny. The Lisbon treaty extended that from six weeks, but it was then agreed that if there were exceptional circumstances, Parliaments would not be given those eight weeks. Those exceptional circumstances will not be available to us to debate, because the decision will be taken in the Council. It will decide, "This is an exceptional matter. We are not going to give the Parliaments the eight weeks we promised to scrutinise this process". That is very dangerous, and I should like an assurance from the Minister and the Government that they will not allow that to happen and will veto any proposal to take away this Parliament's power to have eight weeks to scrutinise anything coming from the Council.

I cannot give an absolute assurance on that, but I shall refer in my winding-up speech to some of the matters my hon. Friend is raising. May I suggest one way in which the European Scrutiny Committee can be very helpful? As he says, many member states do not carry out the parliamentary scrutiny that his Committee and Lord Roper's Committee do, which is one reason why they do not believe there is any necessity to adhere to the eight-week provision. Anything he could do to persuade other Parliaments to take up the scrutiny role that he has would help to ensure that that period is adhered to as faithfully as possible.

Indeed, and I end by paying tribute to the Minister, who has told us in evidence that he has tried to persuade the presidency of the Council and other member states that unanimity, and only unanimity, should be required for a decision to make an exception to the eight-week rule. He stands in good light on that matter. I pay tribute to him for standing up for the right of national Parliaments, and I hope there will be an opportunity for the Council to amend its new rules of procedure before long. That is what we are calling for, because they should require unanimous agreement and thereby safeguard the scrutiny process. Good scrutiny makes for good laws and increased Government credibility.

Several hon. Members:

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Order. Before I call the next hon. Member, I say to the House that Mr. Speaker has put a 15-minute limit on all Back-Bench speeches. Unfortunately, for some reason it is not on the annunciator, but it will be soon. That will apply from the next Back-Bench speech.

First, I apologise to the House for the fact that I will not be here for the winding-up speeches.

I hope that this will not be the last European affairs debate before the election, because it is important that we debate European issues as much as possible. I agree with Michael Connarty that we need to improve the scrutiny of European matters in the House, so I welcome these debates. I actually believe that we should have a special Question Time for European affairs, which can get lost in Foreign and Commonwealth Office questions. Nowadays European affairs do not relate simply to the FCO, so it is important that we have more frequent chances to question Ministers on them on the Floor of the House.

This is a significant moment for the European Union, with the Lisbon treaty coming into force. It enables the EU to put institutional wranglings behind it and deal with issues of substance. This month we will see that it is able to lead at the Copenhagen summit. The Minister touched on that in some detail, and I strongly agree with his remarks. The Lisbon treaty and the developments in the EU over a period of years have enabled it to show strong leadership, which we hope will enable at least a political agreement to be reached at Copenhagen. Leadership in the global economy is also important, and the EU can provide both by agreeing among the 27 member states and through some of those member states going to meetings such as the G20. It is now more able to show the leadership that the world needs.

This is also a significant time for European policy within British politics. One party, the Conservative party, will probably have the most anti-European general election manifesto of any party since the Labour party in 1983, when it wanted to pull out of the EU: it could not get more anti-European than that. It appears that there will be a debate at the coming election about the future of Britain in Europe, not least because of the position that the Conservative party has taken.

I wish to deal first with the European dimension and the issues of substance at the European Council in recent times.

The hon. Gentleman mentioned manifestos. I am sure that he will be aware that on Tuesday, a previous leader of his party, Sir Menzies Campbell announced on The Daily Politics that the Liberal Democrats had abandoned their policy of an in-out referendum on the EU. That was backed up, when chased by the BBC, by a party spokesman, who is quoted as saying that it was now a "completely different political landscape", and that as a "pro-European party" they wanted to concentrate on making the Lisbon treaty work. Can the hon. Gentleman confirm whether the Liberal Democrats have abandoned the in-out referendum?

I am grateful to the hon. Gentleman for that intervention, although he did not let me in when I wanted to intervene on him. I shall speak about that matter in some detail, but I will tell him in advance that the BBC website was inaccurate on two counts, and I am happy to allay his fears that our position has changed. I give him advance notice that I shall want to find out how he defines "cast-iron".

Will the hon. Gentleman give way?

No, the hon. Gentleman can come in later when I deal with that issue.

The Minister was right to talk about the matters for discussion in Europe being jobs and growth. We also need to discuss climate change, external relations and co-ordination on crime. The implementation of Lisbon, though, will inevitably dominate over the next few months, and we have seen some of the initial decisions on it. We strongly welcome the appointment of Baroness Cathy Ashton, who is well qualified for her post. I would say to the Government, though, that the Foreign Secretary was ill advised to talk about wanting to see a European President who could stop the traffic in Beijing, Moscow, Washington and so on. That is not what he told the House when he was trying to get the Lisbon legislation through, when the Government talked about the roles of European President and High Representative as being chairmanship roles. It was wrong of him to be so inconsistent when it came to the appointments to those posts. I have to say that he was completely unsuccessful with respect to the former Prime Minister-and like Mr. Francois, we are delighted that he was.

The European External Action Service is incredibly important, and as I said in an intervention, while I have no doubt that Cathy Ashton will ensure that she represents the whole EU, the fact that she comes from Britain, with our experience and expertise, is most welcome in the setting up of such as system.

I just want to congratulate the hon. Gentleman and his group on securing so many Commissioners. Despite there not being 10 liberal Governments in Europe, they managed to secure 10 liberal Commissioners.

I am grateful. That is in strong contrast to the group in the European Parliament that the Conservative party is in; I think that is the point that the Minister wanted me to make in response to his intervention.

I turn to economic issues, and particularly financial services, which have been of interest in the past few days. There has been concern in the press, which the hon. Member for Rayleigh rightly mentioned, about the French Commissioner Michel Barnier being appointed to the directorate-general of the internal market. Colleagues in the House and outside are right to raise concerns, but my only request is that they do not overdo them. First, the top civil servant in that directorate-general who will advise Michel Barnier is a Brit, Jonathan Faull, so there will be a British representative at the table when things are discussed.

As one Conservative Member rightly pointed out, the chairman of the internal market committee in the European Parliament is Malcolm Harbour. I concur with others who have said that he is a very good Member of the European Parliament and that he represents British interests extremely well, albeit from a Conservative position. I believe that co-decision making-no doubt the Tories opposed that when it was proposed, but it is in place-will enable the committee to have a real say and to prevent the introduction of measures that are against the City's interests. I would also point to a Liberal Democrat MEP, Sharon Bowles, who is chair of the economic and monetary affairs committee, which also deals with matters that affect the City. She is extremely strong. She is extremely well respected in the City and across Europe for standing up not only for British interests, but for a sensible single market in financial services.

The hon. Gentleman mentioned Mr. Faull, who indeed has experience. He has worked for the Commission for about 30 years-but does he know anything about the workings of the City of London or financial matters?

The House will not be surprised to know that I do not know the full CV of the civil servant Jonathan Faull, but the issue-at least, this seems to concern other Conservative Members-is surely whether the British interest will be heard. Clearly, Jonathan Faull is a British civil servant.

The other reason why I think people are getting a little bit overheated over Michel Barnier is that one person does not decide the laws in Europe. The Commission itself contains checks and balances; Commissioners have to agree before directives are put forward. The directives then have to go through the Council and the Parliament. With the co-decision process and with Brits chairing the two key parliamentary committees, I think we can be relatively reassured. If people are in any doubt about the power of the Parliament, I refer them to the draft directive on hedge funds-the alternative investment fund managers directive-which has understandably caused a lot of consternation.

The draft directive went to the European Parliament, and the economic and monetary affairs committee, which is chaired by a Liberal Democrat MEP, commissioned, and in recent weeks published, a damning report on it, saying that the impact assessment that the Commission put forward was unacceptable. My colleague Sharon Bowles is leading the fight to ensure that the directive is not passed in its current form. That is the way we do business in this House, and the way people in the European Parliament do business-giving proper scrutiny to draft legislation. I again implore people not simply to listen to some of the British press when they are screeching, but to look at the actual facts. There are checks and balances, and they are working.

I shall conclude my remarks on that issue by talking about Michel Barnier. I do not think it does the British interest any service if we dismiss someone who actually has quite a good track record, just because he is French; that really would be extremely narrow-minded. I think that we ought to be getting used to French politicians, particularly President Sarkozy, grandstanding, and we should look at the reality of what happens afterwards, which amounts to much less than the rhetoric that sometimes comes out of the Elysée palace. I am not saying that we should not be on our guard, but there are checks and balances in the system that prevent one person from railroading legislation that would undermine our interests.

Perhaps I could refer back to a point I raised earlier. To be fair, the hon. Gentleman has been very clear on the role of the nationality of the individuals involved, as was the Minister. However, the hon. Gentleman has now mentioned national leaders grandstanding. The Prime Minister said that Baroness Ashton's appointment as High Representative would give Britain a powerful voice within the Council and the Commission and ensure that Britain's voice was heard. Both the hon. Gentleman and the Minister have confirmed in this debate that the appointment will do no such thing, because Baroness Ashton represents not Britain, but the Commission and the Council; she speaks not for Britain, but for them. The hon. Gentleman and the Minister have been honest about that, but the Prime Minister has not.

I do not think I am here to defend statements by the Prime Minister, and I am certainly not going to do so. My slight retort to the hon. Gentleman is that although Commissioners, the High Representative and the president of the Council represent the European Union-that is their job as part of the community, and that esprit is supposed still to apply-and although they come from certain traditions and political cultures, those are helpful in the way they are likely to their jobs.

I should like briefly to touch on some external relations points, which both the Minister and the hon. Member for Rayleigh rightly mentioned, and on which I think that there is cross-party agreement-those concerning Bosnia, Iran and Cyprus. I strongly agree with the hon. Gentleman about Bosnia. The Liberal Democrats are increasingly concerned about what is happening in Bosnia, and although we understand the Government's approach, we are not quite convinced that it is strong enough. The constitutional attempts, through Butmir, are not bearing much fruit. I think that is partly because the office of the High Representative there is going to be dismantled. Politicians in Republika Srpska, particularly in Dodik, think that they are going to get away with championing new Serb nationalism, acting as a latter-day Milosevic. We have to send a very clear signal that the European Union will not allow that to happen. It is important that Members on both sides of the House get the EU to steel itself to objecting to that. We may need to look again at the idea of the abolition of the Office of the High Representative because of the lack of progress.

What the Minister said about Iran was interesting. It seems as if the British Government are now preparing to argue within the European Union that now is the time for sanctions. If that is the case, it is a serious new development. I am not suggesting that it might be the wrong step, given the announcement by President Ahmadinejad that Iran wants to build 10 new nuclear processing facilities-that is alarming-but some of the experts, including even people connected to the International Atomic Energy Agency, have suggested that Iran has no ability to build those facilities and that the announcement was totally rhetorical. Therefore, in dealing with Iran, we have to know the difference between reality and rhetoric. That is extremely important.

I hope there is still some room and some track left for taking the diplomatic engagement route. As I said during the Queen's Speech debate, the negotiations on where uranium needs to be enriched and processed for the test reactor in Tehran could still bear fruit. If, despite everything, we can still bring Iran to the negotiating table, it would be a better route. I accept that we are running out of road, but it may well be that one last attempt before sanctions are tried is the right approach.

I do not have much to add to what the Minister and the hon. Member for Rayleigh said about Cyprus. All parties wish Presidents Christofias and Talat all the best, and I strongly hope that the British Government and the EU are doing all they can to enable, in the rather narrow window of opportunity that may be left to us, a historic agreement to be reached.

As for the British dimension of European affairs and how it affects policy, I am afraid the Government increasingly have a rather mixed record. I accept that they have done some fantastic things. Unlike the Conservatives, the Liberal Democrats were pleased when they got rid of the British opt-out from the social chapter, and they have been successful in changing their relationships with other European Governments, but I do not think they have managed to change the terms of trade of the debate in this country. I do not level this comment at the Minister, but some of his colleagues have been unwilling to engage in the real debate and put the pro-European case. In two of his most recent speeches, the Foreign Secretary has begun to do that, but he made some silly remarks about stopping the traffic in connection with the President of the European Council. The poor handling of the appointment of the High Representative, about which the hon. Member for Rayleigh spent some time talking, did not do us much credit either. The Government have not exactly covered themselves in glory.

The Conservatives have asked about our position on the referendum, and I can tell the hon. Member for Rayleigh that the headline on the BBC website is not accurate. If he looks at the comments made by my right hon. and learned Friend Sir Menzies Campbell, they do not bear out that headline. The spokesman, whom the hon. Gentleman quoted out of context, made it clear that our position remains the same. I hope that that reassures him.

I do not know whether the hon. Gentleman needs help defining "cast-iron". Certainly, the dictionaries that I have consulted suggest that it is a guarantee that can be trusted completely, and is rigid, strong and unyielding. It is not subject to change or exception. I am afraid that the "cast-iron guarantee" given by the Conservative leader has ignored those definitions.

Will the hon. Gentleman give way?

Perhaps the hon. Gentleman wants to try to help his leader.

Is the hon. Gentleman saying that a Liberal Democrat Government would hold an in-out referendum, and that if the vote were to be no, they would take us out of the European Union? In that case, how can he accuse us of being the most anti-European party?

We would of course argue for a yes vote, and we are certain that we would win that. One of the reasons why we have been attracted by this policy is that we actually want to expose the Conservatives, who try to have it both ways. They try to suggest that they are pro-European on some levels and that they want to be part of the European Union, but we all know that many Back Benchers and parliamentary candidates are extremely anti-European and want to pull us out. The Conservatives do not want to face up to that reality.

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I give way to Keith Vaz.

Why is the Conservative party afraid to have an all-singing, all-dancing referendum on whether we stay in the European Union or come out? If they want the public to be engaged in such a debate, that is surely the question that should be put before them.

Perhaps Mr. Harper will answer that question.

I was slightly amused by the hon. Gentleman talking about our being inconsistent and wanting to have things both ways. I remember that during the debates on the Lisbon treaty, we talked about the referendum and I asked him about the Liberal Democrats' 2005 manifesto pledge to support a referendum. He then invented, and explained to the House, the novel concept of constructive abstention, under which they voted one way in this House but could not persuade all their colleagues in the other place to do the same thing. They went back on their promise to have a referendum, which is why the Lisbon treaty has become law. Having a referendum now on the Lisbon treaty would be completely meaningless, because it cannot be unratified. That is the fault of this Government and the hon. Gentleman's party, not ours.

Well, there was no definition of "cast- iron" in that, nor did it answer the question asked by the right hon. Member for Leicester, East. The Conservatives know that they have a real problem here. They have reneged on their cast-iron guarantee and they know that their party is split down the middle-

Will the hon. Gentleman give way?

I may give way later, if the hon. Gentleman will be patient. He did not allow me to intervene on him, and I have already allowed him to intervene on me once. I will allow him to intervene a second time shortly-and that is more generous than he was to me.

The Conservatives' present policy has three elements. The first is to have referendums on future treaties, but they have not been clear as to which treaties. If the hon. Gentleman intervenes later, perhaps he will clarify that. Will that policy apply to accession treaties? If there are accession treaties for Croatia, Iceland or Turkey, will they require referendums? As far as we know they will, and it would be bizarre if the enlargement of the European Union and the accession of those countries were to be determined by a referendum. I hope that the hon. Gentleman will be able to answer that question when I allow him to intervene. We want know what the test for a referendum will be. Will it be any change in the European treaties, or just a significant constitutional change? What does the referendum pledge amount to? It is not clear at the moment.

The hon. Gentleman also talked about a sovereignty Bill. He needs to go back to his political textbooks and understand constitutional principles. A state either has parliamentary sovereignty as a constitutional principle or a written constitution. He talks about the German constitutional court as his model, but that court can operate in a meaningful way on European matters because Germany has a written constitution. The Bundestag and the Bundesrat do not have parliamentary sovereignty as we know it in this country. If the Conservative position is not only that they want a sovereignty Bill, but that they want a written constitution, that is a consistent policy, although it is also a major change in the Conservative approach to the constitution-and one that we would welcome. We have advocated the introduction of a written constitution for many years, so we could have a sovereignty Bill that had some meaning. The hon. Gentleman's Bill would be meaningless unless he also wanted a written constitution.

If a sovereignty Bill meant that the Government could strike down EU legislation, it would be profoundly dangerous because it would effectively mean that Britain was stepping out of the European Union.

The Minister makes a fair point. We would be subjugated to the rules of the European Union if the Conservatives were to try to push that policy in the direction that is suggested.

The third element of the new Conservative European policy is the repatriation of powers, and the Conservatives have talked about three such powers. The first relates to the charter of fundamental rights. As I understand it, the Lisbon treaty has a protocol on that and it was debated for many hours on the Floor of the House. After those debates, it was clear that the charter relates to EU institutions, not to the making of law in this House. It is therefore bizarre that the Conservatives want to repatriate the charter of fundamental rights to Britain, because it applies to the EU institutions. That is a weird policy.

The second power relates to employment, and we all know that the Conservatives wanted to opt out of the social chapter. The question is what chance they have of making that policy stick. The Minister eloquently explained how that would need several countries to have an intergovernmental conference and then unanimity to give Britain an opt-out. If the Conservatives are serious about pursuing that in government, they would not only undermine British interests, but be looking backwards, and they would be unable to influence future policy in the European Union. It would be highly damaging to British interests.

The third area in which the Conservatives wish to repatriate powers is in respect of the whole justice and home affairs agenda, including criminal law. We should take that seriously, because they might be able to do it. The Lisbon treaty subjects all aspects of justice and home affairs to an opt-in. Over the next five years, starting from 1 December this year, the clock will be ticking. After five years, everything in that sphere will become an EU-wide competence and the Government would have to decide whether they wanted to opt in or not. Any future Government would therefore have the power to exclude us from all justice and home affairs matters, but that is not just for five years. Over the next few years, as aspects of the European justice and home affairs legislation are amended-as it certainly will be before the five-year cut-off point-the Government will be able to decide on those specific aspects whether to opt in or not.

That might sound like a technical point, but let us think about what it means in practice. The European arrest warrant, about which we talked earlier, is likely to be amended in the next two years because there have been imperfections and it has not worked perfectly. I am sure that that will have to happen. The next Government will therefore have to take a decision when the amendments are proposed to opt in to, or out of, the EAW.

We have heard from Conservatives in the European Parliament and the House that they are fundamentally against the EAW. We have heard from the shadow Home Secretary that he is minded to be against it, and when the leader of the Conservative party was interviewed on the "Andrew Marr Show", he said that he was very much against it too. He told Andrew Marr:

"There are many things in the Lisbon treaty-giving more power over home affairs and justice-that we don't think is right."

Given that the Conservative policy is to repatriate powers on those areas- [Interruption.] The hon. Member for Rayleigh says that he did not say anything about the EAW, but it is slap bang in the middle of the justice and home affairs agenda. If he wants to tell the House what the Conservative position will be on the EAW and whether it will opt back in when given the chance, it would be very helpful. I am sure that Conservative Back Benchers and Conservatives in the European Parliament, who voted against the EAW and believe that it infringes our sovereignty, would be interested to hear about that position. I would welcome it too, because it would move the Conservative party towards a pro-European position and in a sensible direction for the conduct of justice and home affairs. However, I doubt that we will get an answer, because the hon. Gentleman and his party want to sit on the fence.

It is not just about the EAW; it is about Europol and Eurojust and all the other things that, as I said in an intervention, are bringing serious criminals to justice. We will be interested to hear whether the hon. Gentleman has an answer to that.

rose-

I am happy to take the hon. Gentleman's intervention, but I hope that he has some answers to those questions.

The hon. Gentleman knows that we have a number of concerns about how the EAW has operated in practice, as does, indeed, the Liberal Democrats' Home Affairs spokesman, Chris Huhne, who gave a speech recently in which he expressed a number of concerns. Will Mr. Davey explain why, if the Liberal Democrats are so in favour of the EAW, as seems to be evident from the line that he has taken this afternoon, they abstained in 2003 when the House voted on whether Britain should sign up?

The hon. Gentleman is talking about an Act of Parliament, part of which covered was the EAW. If he reads the proceedings of the House, he will see that my colleagues and I were very much in favour of the EAW, but we were against other parts of the legislation. We made that clear in the proceedings. We are very different from him and his party because he opposed the EAW. The Conservatives voted against it in the House and the European Parliament, and not because of one or two imperfections; they were against it in principle, just as Mr. Cameron is in principle against justice and home affairs being taken at the European level. They have a lot of explaining to do. Between now and polling day, we will push them to make themselves clear to the British people: will they give British people the protection of the EAW, Europol and Eurojust?

The hon. Gentleman talks about serious crime, but is he not aware that in cases such as the one a couple years ago in which some British people were arrested in Greece for spotting aeroplanes, British citizens might be extradited to countries with legal systems in which we have less confidence than we have in our own? The crimes might not be serious; they could be more spurious and difficult-to-understand cases.

The hon. Gentleman is right. I could give him three or four examples from different countries, such as the Töben case in Germany and several others in Poland-I believe that the Poles will have a particular constitutional issue to sort out when we consider reforming the EAW.

The Liberal Democrats have argued, in this House and the European Parliament, and against the Conservatives, for measures linked to the EAW at the European level to ensure that British people in court in other EU countries-not just because of the EAW, but perhaps having been arrested while on holiday, working or living in those countries-have better protections and the minimum guarantees of legal rights that do not exist in the EU at the moment. We want to push that case.

The Conservatives, however, have always opposed that approach. I am afraid that their position is completely inconsistent: they complain about the EAW because it does not guarantee those minimum legal rights, but when those rights are proposed, they oppose them. They are in a tricky position. Any future Government will have to answer such questions, not the spurious, theoretical questions about some mythical idea that a future British Government could renegotiate social employment legislation.

Finally, what worries me particularly about the Conservatives' position on Europe is their view on defence policy. I regret the fact that we did not have enough time to debate defence in full in our debates on the Lisbon treaty. Indeed, Conservative colleagues and I complained about that at the time. However, the Conservative defence spokesman, Dr. Fox, has attacked much of the co-operation on defence, particularly the European Defence Agency. My concern about his attacks is that they are factually incorrect. He talks about the European Defence Agency as having a

"supranational role for procurement inside the European Union."-[ Hansard, 23 November 2009; Vol. 501, c. 367.]

He clearly does not understand how the European Defence Agency works. Its whole remit and the framework within which it works are based on unanimity. Even the workings of the board of the European Defence Agency mean that day-to-day matters are decided on the basis of qualified majority voting. However, if a member state objects to them, they can be referred back, so that they are decided on a unanimous vote. That ought to be in the British interest. The idea that the European Defence Agency is a supranational body to which we have surrendered control is simply wrong.

What worries me in practice is that the Conservatives oppose some of the excellent work currently done, albeit on a small scale, by the European Defence Agency. For example, work is being done on something called the helicopter initiative. The Conservatives have rightly criticised the Government's record on helicopters in Afghanistan and other theatres. One of the advantages of the European Defence Agency's helicopter initiative is that it will ensure that some citizens of other member states are properly trained so that they can fly helicopters in theatres such as Afghanistan. The Conservatives' opposition to the European Defence Agency would stop that initiative taking place and thereby prevent us from securing a much needed supply of trained helicopter pilots into Afghanistan from other member states when, interestingly, at other times the Conservatives complain about other member states not pulling their weight. The European Defence Agency and our co-operation on defence are ways to ensure that other member states begin to play a proper role. I am afraid that the Conservative position is completely unfathomable.

Britain gets short-changed in Europe when it fights straw men such as the European Defence Agency, co-operation on crime and so on, which is not in the interests of the British people. I hope that between now and the election the Conservatives will think again, change their position on some of those key issues, and face up to the Eurosceptics in their party and the press. If they do not and if they then take power, as either a majority or a minority Government, with the same approach, that will be hugely damaging to British interests, whether in co-operation on crime, co-operation on the environment or co-operation on the economy. That is a matter of huge significance to this country's future. Let us hope that the Conservatives think again.

It is always a pleasure to follow Mr. Davey in a debate on European policy. I agree with almost everything that he said about the issues that confront the European Union.

It is important that we move on from the great debate about who got which job. Of course there was a lot of lobbying off camera, by political parties, Members of this House and others, but the issue has now been settled. It is important that we move on and give our new High Representative-our former British Commissioner and new vice-president of the Commission, Cathy Ashton-our full support. I believe that she will do a terrific job. It is important that we should have women in positions of genuine responsibility as public faces of the European Union. I wish her well, and I hope that the whole House does too. Indeed, I take the comments made by the Opposition spokesman, Mr. Francois, as being positive. He wants to work with her and ensure that she will be a success.

Will my right hon. Friend also confirm that Baroness Ashton is not there because she is a woman? She is there because she is an extremely competent Commissioner and politician and because she will do an excellent job on that basis.

I am happy to confirm that, although I think that all the Commissioners whom we have sent to the European Union, Conservative and Labour, have been excellent. We have done very well in the choice of people whom we have sent.

I also want to pay tribute to the Minister for Europe for the work that he has done. Reference has been made to the large number of Ministers for Europe that we have had-I was one of them-but I cannot think of anyone better prepared for the job than him. He has a passion for Europe, he has an intelligence and an understanding, and I think that he will do an absolutely terrific job. I also hope that he stays in the job for as long as I did, which was about two years.

I am also pleased that my next-door neighbour in Leicester, my hon. Friend Sir Peter Soulsby, has been promoted to become the Minister for Europe's Parliamentary Private Secretary. He has had a very distinguished career in Leicester. In fact, he probably knows more about Europe-I have to say this-than the Minister or me. Before either of us entered the House, my hon. Friend the Member for Leicester, South was a member of the Committee of the Regions. The Minister has thus chosen an able person to assist him as part of his team. I am sure that they will do very well in Europe.

I am with the hon. Member for Kingston and Surbiton on the issue of the referendum. I think it is important for us to be in a position in which the British people can once and for all deal with the myths put about by the Eurosceptics. I am quite certain that if a referendum comes-it is not, of course, Labour party policy-we will find that the leader of the Conservative party and the shadow Minister for Europe will be on the side of the angels and will support the hon. Member for Kingston and Surbiton and others in saying that Britain should remain in the European Union. That is why it is important to put it on the line and give people the opportunity to have those discussions.

The European Council meeting next week will be an important one and it is obviously going to consider the extremely important issue of climate change. I am not going to dwell, in the few minutes I have available, on that issue because I know other Members will cover it. I want to talk about one or two other issues that I hope will be raised, and I hope that the Minister will respond to explain current Government thinking when he concludes the debate.

When the Minister gave his opening speech, I raised with him the issue of the Lisbon agenda. The Lisbon agenda is a very important agreement among European colleagues. It is not, of course, the same as the Lisbon treaty, which is also important, and this predates that treaty. There must be something about Lisbon to make it the place where all the important decisions about Europe are taken. The importance of the Lisbon agenda is that it set down for the first time a set of economic benchmarks that it was hoped European countries would try to achieve.

As those involved in European affairs will know, there are often meetings, summits and other things of that kind and there is often general good will about all the initiatives that are going to be followed, but the importance of the Lisbon agenda is that it set those benchmarks down-on employment, on growth and on how the economies of various EU countries should work together. I hope that we will not lose the opportunity to ascertain whether all the 27 countries have met those benchmarks set 10 years ago. If not, we must ensure that there is a corrective mechanism to enable them to meet them. I know that the current global economic crisis will have had an effect on the benchmarks that were set 10 years ago, because the crisis was not envisaged, but I still think it important for British Ministers to hold themselves, the Government and colleagues to account as to whether those benchmarks have been met.

I am glad that the Government remain committed to the accession of Turkey in the future-in the near future-and I am also pleased that the Opposition are fully supportive of it. I do not think that the hon. Member for Kingston and Surbiton mentioned Turkish accession- [Interruption.] Perhaps he did while I was out of the Chamber. I believe that-apart, obviously, from Mr. Cash-there is all-party unity among Members in the House at the moment in favour of Turkey joining the European Union. It is important that we do not merely say these things. We should use our weight to ensure that that happens, precisely as we did when we ensured that Poland and other east European countries entered when they did. Had it not been for the work of Tony Blair, the then Prime Minister and Robin Cook, the then Foreign Secretary, I do not believe that we would have seen the enlargement of the EU by that number of countries at that particular time. We should put our weight behind getting Turkey in as soon as possible. That also applies to Croatia.

It is important not to leave countries to fend for themselves when they enter the EU. Romania and Bulgaria have been mentioned. I think that Romania's accession has been a success, as has that of the other eastern European countries. I do not think we should condemn Bulgaria; I think that we should work with it to ensure that it overcomes its difficulties. Part of the problem is that when new countries enter the European Union, they are delighted and there is national euphoria, and then Brussels moves to the next set of priorities. Support is extremely important if we are to ensure that the EU succeeds and member states feel that they are welcome. We want member states to be part of a first-class Europe with no second-class countries, moving together in what I hope will be a united way.

My right hon. Friend talks of all the countries moving together. Is not the problem in the European Union that its member states are so diverse, economically and politically? If we want the kind of European Union that he is describing, perhaps we should adopt the Edward Heath model: a smaller group of western European nations with similar economies and cultures.

My hon. Friend is a frequent visitor to debates on these issues. I think he has participated in almost all the European affairs debates over the past 10 years or so; he has certainly participated in the more recent ones.

I do not favour a federal Europe, and nor do the Government. We must have a Europe of nation states. Where there is a method of co-operating beyond the strict rules, we should adopt it. One example is the justice and home affairs agenda. We can opt in or opt out when we wish to do so, and we can ensure that we work with European partners to deal with immigration issues.

I have mentioned my visit to the "jungle camp" in Calais with members of the Select Committee on Home Affairs. We went to the camp a week before the French moved in and broke it up; I do not know whether that had anything to do with the Committee's visit. We met a large number of young men between the ages of 15 and 40 who had travelled to Calais all the way from Afghanistan and Iraq. They had passed through Austria and Romania, some had been to Spain and some had gone through Germany, but they had all ended up at the tip of the continent, and all that they wanted to do was come to London and live in the United Kingdom. No matter what they were offered, that was what they wanted to do. They formed themselves into a "jungle camp" and refused all the offers from the French to allow them to seek asylum, because they wanted to cross the channel and come to the United Kingdom.

I kept saying to those young men, "But you have come all the way from Afghanistan and Iraq. Surely there is some other European country where you might like to stop in order to claim asylum." If there is an area in which we need better co-operation, it is the justice and home affairs agenda, and immigration in particular. Our European partners are simply not abiding by their responsibilities and obligations. When people pass through their countries, they should deal with the problem.

As usual, the right hon. Gentleman is making a powerful speech. I should like to know why he thinks those people travelled across Europe and wanted so desperately to get into the United Kingdom.

I could be flippant and say that they knew about the success of our country after 12 years of a Labour Government and wanted to join in that success, but I think that they see the United Kingdom as El Dorado. It is the place where they believe they can be safest. There would be a common language, as many of them spoke English, and none of them spoke French, German or Austrian German.

The point is that our colleagues need to ensure that they fulfil their responsibilities. When people enter a European Union country, whether it is Romania, Austria or Germany, that is where the problem should be dealt with. If there is one thing that we ought to be doing, it is sitting around a table at the Justice and Home Affairs Council when the Home Secretary is next there and ensuring that that happens. I know that the Minister for Borders and Immigration and his French counterpart have decided on a common strategy. The trouble, however, is that the French offered some of these people a return to Afghanistan, a charter plane was booked, but before they could board it, the French cancelled it. There has to be a common approach to immigration policy.

Better use needs to be made of Europol. It is headed by a Brit: Robert Wainwright, formerly a senior official in the Serious Organised Crime Agency. We do not do enough to support Europol. I know that there are problems with the European arrest warrant, but this is another EU institution through which we can work with our European colleagues and partners and we must make sure that it is strengthened and robust. Our country simply cannot deal with the threats we face from organised crime and international terrorism without the support of colleagues. Again, those engaged in these activities have to pass through many other countries in order to get to the United Kingdom. The support of colleagues and partners is vital, and it is also vital to the security of our country that we support institutions such as Europol.

Mr. Steen is not in the Chamber at present, but no Member has done more to combat human trafficking; he has been an assiduous campaigner on the issue. The Home Affairs Committee completed its report into human trafficking earlier this year, and we again found that although this is a cross-border issue on which we ought to have the support of European partners, we did not get that support. We would like there to be a Europe-wide organisation to deal with human trafficking.

I am not suggesting for one moment that we should spend any more taxpayers' money in creating yet another European institution, because I am the first to admit that not all of them work satisfactorily despite the huge budgets they receive. However, there must be networks that we can create that will permit us to work with partners to stop the scourge of human trafficking, which is currently the second biggest illegal activity, after the drugs trade. I hope that at the next Council meeting we will support the Swedish presidency to ensure that it continues to make tackling human trafficking a priority. One of the good features of the EU over the past few years is that themes have not only been taken up by individual presidencies, but they have been carried over to cover a number of presidencies. This started in Prague and went on to Stockholm, and I hope it will be continued in Madrid, so that there is longer than just six months to consider the themes that are fashioned and outlined by the countries that hold each presidency.

I know that Sri Lanka is not a huge issue for next week's European Council, but I also know that the EU is about to consider whether to extend GSP-plus-the generalised system of preferences-for Sri Lanka. There have been positive developments in Sri Lanka, in that a number of people have been let out of the camps that the Government have created. I and colleagues in the all-party group on Sri Lanka-including the hon. Member for Kingston and Surbiton, who has been at the forefront of UK support for the Tamil community-have met the Foreign Minister. We made it very clear to him that it is not enough for the Sri Lankan Government just to let people out for a short period-they must return to the camps after 15 days-but that they must demonstrate that they are committed to understanding and engaging with their own people about their true wishes. That means that they will have to sit down and talk to the leaders of the Tamil community in Sri Lanka. I urge the Government not to permit an extension of GSP-plus yet-that is our official position, and it was the position of Cathy Ashton when she was Trade Commissioner-because if we send a signal now that we are happy with what is going on, it will be read in the wrong way. We should continue this engagement with the Sri Lankan Government-we should continue a dialogue with them and welcome what they have done-but we should also make sure that they complete the process. A few days of respite for the Tamil people is not enough; the Sri Lankan Government must do more.

I wish the Minister for Europe well in his first European summit since taking on the post. I know that he will have a terrific time there, because this is the subject about which he knows the most. I hope very much that he will continue to do what he and all other Ministers have done, which is to put the interests of Britain first while dealing with colleagues and partners to make sure that we do the best for Europe and the best for Britain.

It is always a pleasure to follow Keith Vaz, who served for a time-perhaps it was too short a time-with distinction as Minister for Europe and is now serving with distinction as Chair of the Select Committee on Home Affairs. His kind comments about my hon. Friend Mr. Steen are welcome and on the record. The right hon. Gentleman's speaking about human trafficking in the way he did underlined yet again that when Europe and its nations need to come together to address a key problem, they fail. Human trafficking is just another example of where we need to be more pragmatic in our approach, in sharing the issues and in dealing with them in a unified way.

I share the disappointment of my Front-Bench team that the European Court of Auditors has refused to sign off the EU's budget for the 15th time in a row, owing to fraud and mismanagement in the budget. It is very unfortunate that the EU, with the enormous powers that it yields and a gargantuan budget to match, continually faces such serious allegations from its own auditors. I wish to take this opportunity to highlight some of the nonsense that has been recorded regarding projects funded by the EU in recent years.

My first example took place under the umbrella of the common agricultural policy, when €173,000 was given to the luxury golf resort called the Monte de Quinta Club in the Algarve in Portugal. According to the resort's website, guests can choose

"the comfort of a villa with garden and private pool, or be dazzled by deluxe suites."

It would be interesting to know whether that appropriation has been challenged and the money reclaimed. My second example is that of a Swedish farmer who received a subsidy, albeit small, of €200 through the EU's single farm payment scheme for land on which he grew cannabis; we are told that he had filled in all the required forms correctly. Last, but certainly not least, is the example of the €4 million subsidy given in 2002 to seven Italian orange farmers who failed to grow a single orange between them.

It is not just the EU's agricultural policy that is not fit for purpose; another key area of waste is the EU's structural and cohesion funds-its second largest spending area, representing almost a third of the budget. The European Court of Auditors concluded in its report on the 2008 budget that the structural and cohesion funds remain problematic and are

"the area most affected by errors".

Worryingly, the Court estimated that at least 11 per cent. of the total amount paid out in grants from those funds should not have been paid out in the first place.

The structural and cohesion funds are intended to narrow the economic disparities among member states, and key recipients included Ireland, Spain, Portugal and Greece after they joined the EU in the 1970s and 1980s. Following the eastern enlargement in 2004 and 2007, most of the recipients of the funds are now central and eastern European states. Despite the €45 billion poured into the funds from member states every year, the OECD has not found any conclusive evidence that the funds have had a positive impact on the economies of the states receiving them. In fact, an OECD report from September 2007 stated that

"regional disparities are not falling, or at best declining very slowly".

It calculated that at the current rate of convergence it would take 170 years just to halve the economic disparities between different regions in the EU. A major reason for the extraordinary levels of waste and mismanagement is the sheer size and complexity of the budget. As the EU's auditors pointed out in their recent report, in many situations the errors are a consequence of too complex rules and regulations.

There are several ways in which the budget can be improved. At the moment, EU rules state that allocated funds must be paid out within two years or the money will be cancelled. That, of course, encourages member states to spend the money as quickly as possible without due scrutiny or responsibility. Bringing the structural and cohesion funds under national control would, in our opinion, simplify the EU budget and inject national accountability, greater transparency and more involvement by national Parliaments. It would, we believe, reduce waste and mismanagement and establish a better link between performance and receipt of subsidies.

I have suggested on many occasions that the European budget ought to be distributed according to need, with the rich countries paying proportionately and the poorer countries drawing proportionately, according to their standards of living. Paying directly to Governments would be necessary as part of that. It seems to me that we have agreement on these matters.

I am most grateful for confirmation from the hon. Gentleman that we are moving in the right direction.

One of Tony Blair's conditions for giving up parts of Britain's rebate was that the Commission should conduct a wide-ranging review of EU spending. I am disappointed that the deadline for the review at the end of 2009 is unlikely to be met. However, a leaked draft paper on the budget review suggests that the Commission, once it has got its act together, will put forward several worthy proposals for reform. They will include some proposals that would not serve Britain's best interest, but I welcome the proposals significantly to reduce the amount of money spent on agriculture and to reform the structural and cohesion funds.

As far back as 2003, the then Prime Minister wrote in The Times that the structural and cohesion funds should be returned to the control of the member states. Will the Government push for that in the EU's next budget negotiations; or is the Prime Minister-and is the Minister-prepared to give up this pledge just as his predecessor gave up part of our rebate in return for nothing?

The UK is now the second biggest net contributor to the EU budget according to Treasury figures. We pay almost £10 billion a year into the EU's budget for 2007 to 2013 and get back about £5.2 billion. Crucially, the UK's net contribution will rise from £4.1 billion in 2009-10 to £6.4 billion in 2011-12. That is after the European Parliament voted in October to increase Britain's payments by £5 million a day, against the advice of the European Commission and the European Council.

Moreover, the UK is also the EU member that receives the least back from the budget per head. According to figures from Open Europe, we receive only €770 per head in EU funding, which is lower than any other member state. It is half as much as France, which receives €1,480, and a quarter as much as Ireland, which receives €3,090. Perversely, the richest country in the EU-Luxembourg-gets more than €22,000 per capita because it benefits from hosting several EU agencies.

To be added to that is the famous rebate that Margaret Thatcher wrestled from the European Union, which Tony Blair famously gave away so that he could get the top job, which he never has.

I am sure that my hon. Friend's logic is absolutely correct in that regard.

It would of course be interesting to know what efforts the Government propose to make in future to ensure that the UK gets a fair deal in the EU. Whichever way one looks at the budget situation, this country seems to be considered by its EU partners as some sort of milch cow. How is it that, after 12 years of being told repeatedly by this Labour Government that they and they alone of the UK political parties knew how to play the game in Europe-at the centre of Europe-we now have a deteriorating contribution situation with absolutely nothing to show for it?

The term "milch cow" is appropriate, because the distorting factor in all this is the common agricultural policy, and we do not have enough milch cows to claim enough. I have called for the abolition of the CAP and the repatriation of agricultural policy to member states, but does the hon. Gentleman agree that something fundamental has to be done to the CAP?

I absolutely agree. However, on a recent Foreign Affairs Committee visit to Paris, Committee members met a junior from the French agricultural ministry and were left in no doubt that the French would give up the CAP most unwillingly. To them, it is not just about the money going into agriculture and directly to their farmers; it is about a whole policy of maintaining populations in the countryside. We will have great problems addressing this issue, given the intransigence of politicians in France.

On the recent appointment of Baroness Ashton as the EU's High Representative on foreign affairs, although I, like many of my colleagues, did not agree with the creation of that post in the first instance, or with that of EU President, I should like to take this opportunity to congratulate the Baroness on her promotion. I also reiterate the shadow Europe Minister's assertion that a future Conservative Government will look forward to working with her.

During the shenanigans surrounding the Lisbon treaty appointments, while the Prime Minister was busy lobbying for Tony Blair to become the new President and while the Foreign and Business Secretaries were busy positioning themselves for the plum job of EU Foreign Minister, who was busy protecting Britain's interests? After the Prime Minister was outsmarted in Europe and was led to accept Baroness Ashton for the Foreign Minister job, the most important post of all was snatched from right under his nose. The Prime Minister, who takes every opportunity to portray himself as the City's knight in shining armour and as an economic messiah ready to lead the country out of recession, has completely sold out Britain for the sake of parachuting his fourth-choice candidate into a non-job.

France secured one of the top economic posts in the new Commission after a former French Minister, Michel Barnier, was named as the new Internal Market Commissioner with responsibility for financial services. The other key economic posts will go to Spain and Finland. It is reasonable to expect that Mr. Barnier, a protectionist who has been openly hostile to the Anglo-Saxon model of capitalism, will seek sweeping regulatory reforms of financial services, most of which are located in our square mile in London. Many have voiced their criticism of Mr. Barnier's appointment, including the major French-I say left-leaning-newspaper Le Monde. In July, it compared giving the internal market post to Barnier with entrusting the surveillance of a chicken coop to a fox.

Nicolas Sarkozy, the French President, has gleefully declared that the English "are the big losers" after the carve-up of EU posts. In a speech a couple of days ago, he asked:

"Do you know what it means for me to see for the first time in 50 years a French European Commissioner in charge of the internal market, including financial services, including the City?"

We do not need to have it spelt out any clearer than that. He went on boldly to declare:

"I want the world to see the victory of the European model, which has nothing to do with the excesses of financial capitalism."

The Prime Minister has let himself be completely out-manoeuvred by President Sarkozy and Chancellor Merkel, who, it has become clear, had agreed in private, prior to the meetings in Brussels, to take control of financial services. Barnier's deputy will be the Briton, Jonathan Faull, as has been mentioned by the Liberal Democrat spokesman, Mr. Davey. However, it is doubtful whether Faull's appointment will secure Britain's interests, as he has worked for the Commission bureaucracy for more than 30 years and has no experience whatever of the City.

It would be interesting to know whether the Government are still adamant that that carve-up was a "major achievement for Britain", as the Foreign Secretary tried to convince the House on 23 November. It would also be interesting to know what steps the Government will take to ensure that Britain's interests are not bypassed in the EU-apart, of course, from the Chancellor's letter to The Times pleading for mercy, and his failed visit to Brussels yesterday. After Brown's failure in Brussels last month, the Chancellor was fobbed off by Europe's Finance Ministers in Brussels yesterday, which forced the Government to accept more concessions.

Not only will the City be at the mercy of a protectionist Frenchman, but Britain will be able to appeal decisions by the European supervisory authorities only if we secure the support of a majority of members. It seems that every time the Government feebly try to fix things, the more damage they do. As Sarkozy accurately points out, the loser is Britain.

As we all know, the Commission is extremely active in the area of financial regulation and supervision. Current plans include the new directive on alternative investment fund managers, which seeks to create a new pan-EU regulator for financial markets. This is set to be just the first of many blows to the City of London after Barnier's appointment as chief enforcer.

After the European and local elections in June, it was crystal clear that our constituents wanted less intrusion and meddling from Europe. What we will get from having a protectionist Frenchman in the top economic job is yet more regulations that will seriously hamper Britain's road to economic recovery.

I rise to participate in this debate with a certain amount of regret, as it will almost certainly be the last meeting of this Euro Sealed Knot society. We fight over the old battles at regular intervals, but we change uniforms from time to time: the Conservative party used to be so enthusiastic about Europe that it turned Baroness Thatcher out, whereas the Labour party was so unenthusiastic that it stood on a platform of withdrawal in 1983.

Our leader in that election, Michael Foot, did not seem to understand that platform, but I certainly did, and I took it to mean what it said. Our situation was transformed when Neil Kinnock, now Lord Kinnock, stood on the cliffs of Dover, held out his rod, parted the waters of the channel and led the chosen people-that is to say, the Labour party's Front Benchers-over to the other side. I stayed on the cliffs, rather like the character in "The Bridge on the River Kwai" watching the actions of Alec Guinness and saying, "Madness, madness!" I have remained on those cliffs ever since.

People who wanted a career in the Labour party would have been well advised to transfer to the other side, which is what most of them did. On our side of the House, Euro-enthusiasm has become almost a matter of religion. Certainly, it has replaced socialism in the biography of the Labour party, so it is a matter for regret that today's skirmish will be the last one before the election.

Will the hon. Gentleman give way?

It was only a joke!

I know that it was only a joke, but there is a serious side to what the hon. Gentleman has said about Labour politicians. Perhaps one reason why they are so attracted to Europe is that they can do very nicely out of it. I notice that Baroness Ashton, from her appointment as EU High Representative, will have an annual salary of £270,000, which is significantly more than the Prime Minister of our country gets. The total allowances and perks that she will receive while in the Commission will net her an estimated £4 million-very nice if you can get it!

I thank the hon. Gentleman for that interjection, because clearly Baroness Ashton deserves the money. She is only following the example of the former leader of the Liberal Democrat party in building up a huge pension plan, which sustained the party for a long period.

I was talking about today's skirmish, in which our side is being led not by the Foreign Secretary but by our hon. Friend the Minister for Europe. He is acting not as the King but as the Rupert in this particular battle, and I must say that he is doing it very well. He is making a brilliant fist of his job, but I wish that his ability and eloquence were applied to a better cause than the Euro-enthusiasm that he has always manifested. He is right in the tradition of first-class Foreign Office minds, in that he now devotes all his effort and attention to developing second-class arguments for the third-class-indeed, third-rate-institution called the European Union. Every defeat must be interpreted as a victory and every loss as a gain, and we must always say that Britain leads, however humiliated Britain is.

The Foreign Office and its Ministers seem to live in a different European Union from the rest of the country. The US Department of Defence has a situation room; the Foreign Office has a fantasy room, where matters European are discussed. There is a naive view of Europe as the Foreign Office would like it to be, not as it actually is: a Europe that is kind to small countries and helpful to poor ones, even while it excludes their agriculture from our markets; a Europe that is of great benefit to the UK, even while it makes enormous demands on us, with a growing deficit and contribution burden; a Europe that defers to British wisdom, even while a new leadership of the European Union emerges as Angela Merkel endeavours, successfully, to interpose herself into the world's greatest love affair of Sarkozy with Sarkozy-it is now in fact a threesome. That is what dominates Europe; we do not, and it is no use pretending that we do.

Another example of such Euro-think is my hon. Friend's interpretation of the latest appointments as a triumph; I think that that is what he said. Personally, I think that it is a shame that Tony Blair did not emerge as the President of Europe. He would have done well in that position. He can convince anyone of anything. He might have been able to convince people of the benefits of Europe, given his eloquence. Europe certainly needs someone of his vigour, energy and traffic-stopping ability.

The appointments show what Europe really wants, and it is not the flair of that kind of leader. Europe wants to be a bigger Belgium. That is the European aspiration: to be a bigger Belgium, dominated of course by France and Germany, which is inward-looking, has low growth and high unemployment-it is the black spot of the advanced world-and maintains agricultural protection to keep out the agricultural production of smaller countries. It is true that we have the foreign policy post-

Will the hon. Gentleman give way?

No, I am not listening to another account of the incomes of European Commissioners.

We have the foreign policy post, which escalates in title even as it diminishes in power. It is now High Representative-or perhaps it is Lord High Representative now. It is a job as important as herding cats-a collection of cats that do not particularly want to go in any direction that we might, whether that be into Iraq or into Afghanistan.

In this situation, we have the rather useless foreign policy portfolio of the High Representative, but the French have grabbed the key economic portfolio of the internal market, which the City sees as a terrifying threat. The Chancellor tells us that the City's interests will be safeguarded and that it will not be ruled from Europe, but I am afraid that when we signed the Lisbon treaty that is what we signed up for, and I am sure that that is what will happen.

We can observe all this with great fondness. It is an entertaining spectacle. What is more, it is free to air, like ITV. But we must pay for it in the long run, and that is what I want to talk about today. The costs of Europe to this country are heavy, as Mr. Moss said. At a time when we are moving into a climate of cuts, economies and straitened resources, we are paying a heavy price to stay in Europe and contribute to it. For instance, we are paying the increased in connection with the rebate, which I thought was agreed to by Tony Blair while he was Prime Minister as the first down payment on the job of President in the future. Unfortunately, the down payment was taken but the item was not forthcoming in the sales. Thanks to that, our net contribution rose to £6 billion. It rises again with devaluation, which reduces the value of the pound, to about £8 billion.

That is only the budget contribution; we also contribute to other projects, such as Galileo and others. With Galileo, a satellite guidance system is being designed, and we are being charged for it, even though the Americans provide such a system for free. That will cost £2 billion to £3 billion. Then we have the common agricultural policy. The OECD estimates the cost of that-the resource cost, anyway-to be £15 billion. The cost to us of the common fisheries policy, which has not been mentioned but certainly needs to be abolished, is about £3 billion. That is the cost to us in fish from British waters that are landed not in Britain but at other European ports, where they are processed.

That all represents a huge cost across the exchanges, and we have to finance it with a declining pound. Our balance of trade deficit last year was £48 billion, and the cost of Europe adds up to between £20 billion and £25 billion. In other words, about half our balance of trade deficit goes on financing membership of the European Union. That is not the only cost, because there are other, more internal costs. We have the cost of regulation, which the CBI estimates to be between £20 million and £40 million, and the cost of low growth, because European economies, including ours, have grown about 1.2 per cent. less than other advanced countries outside Europe. The cumulative loss of growth amounts to 0.5 per cent. of GDP a year, which is about another £7 billion, so the total cost of Europe is more than £50 billion-to an economy that will be crippled and straitened by the need for economies and cuts in the years ahead.

What are the British people going to say when they are told that we have to cut the health service, education, and other services or benefits, in order to maintain this large contribution to Europe? Will they be dancing in the streets, as our Government might like, or will they become angry, upset and alienated? It is a tremendous burden to bear for membership of a club that is actually damaging our economy-an economy in which we are running a massive and growing trade deficit.

My hon. Friend the Minister said in his speech that in dealing with the recession, a unity of purpose had emerged. Well, it has not. What has emerged is the propensity of individual countries to do much the same thing, because the obvious thing to do in a deflationary situation is to expand one's spending-to introduce stimulus spending along Keynesian lines. I know that the Conservatives do not want to do that, but it is the obvious and sensible thing to do. The only commonality is that all countries have done so as a matter of individual volition, but Europe has damaged that process, because the euro makes it impossible for countries with a deficit, countries in difficulties or countries that have been hit by recession to devalue their currency as we have devalued ours.

The pound is down by about 25 per cent., and that is good. It is an enormous economic stimulus; we will benefit from it, and manufacturing will grow and improve. Other European countries cannot devalue their currency, however: Ireland cannot do so, and that is why it has plunged deep into recession; Spain cannot do so; Italy cannot do so; and the Greek situation, whereby public sector borrowing is drying up because people want a premium on the interest rate paid, will spread like a contagion to the other euro countries. In that situation the euro becomes a tremendous burden to bear, and thank heavens we do not have to bear that burden. It was very far-sighted of our Prime Minister and the Labour party to keep us out of the euro.

Didn't he want us to go in?

I do not mean the previous Prime Minister, who wanted us to go in, but our current Prime Minister, who kept us out-thank heavens. We benefit from that situation, but it will cripple those other countries, not to mention Hungary and the Baltic states, which have been hit in the same way.

I shall conclude on an important point. We have a growing trade deficit, and the City's contribution, which has helped keep us afloat, is going to be hit. Furthermore, the contribution of oil, which has also helped keep us afloat, will decline steadily in the next few years. If we are going to pay our way in the world and provide jobs for our people, the only recourse will be to re-expand, reboost and rebuild manufacturing. As is reported in this morning's Financial Times, manufacturing has shrunk; when we were elected in 1997 it made up 20 per cent. of GDP, but it is at 12 per cent. today. Indeed, it is estimated that it makes up only 11 per cent. of GDP currently, because manufacturing is in a difficult situation as a result of the recession.

Manufacturing has to remain good if we are to pay our way in the world; we cannot go on borrowing from the world to finance a deficit so that we can go on importing. Revivals have been produced in the past-in 1949 and 1967, and in the Tory devaluations of the early '70s and 1992. We now have the opportunity to give the same boost, as long as we keep the pound competitive and keep money cheap, so that we can rebuild manufacturing.

That, however, is a necessary but not a sufficient requirement. To rebuild manufacturing we must also have an industrial policy, channel investment to industry and maintain job clusters and business clusters for development purposes. We have to spend on training and boost industry to facilitate progress. All that is difficult to justify in a European context in which what we can do to invest in domestic industry is strictly controlled. It will all mean competition with Europe, because our main trade deficit is with Europe. We will have to end that deficit and replace it with a surplus, and that will be painful for Europe.

Can my hon. Friend remember colleagues of ours who said that ownership did not matter? The reality has been that ownership has migrated to everywhere else in Europe, apart from the UK. The biggest single problem as we try to rebuild manufacturing in this country is that the decisions will be taken not here but in Paris, Bonn, Milan and so on. That weakness is surely part of what my hon. Friend is saying.

I agree absolutely: that is what has happened, and it makes things more difficult to rebuild. However, we still have to do that. The main cause of that drifting away of jobs has been the overvaluation of sterling until now, as well as our having allowed British industry to be taken over lock, stock and barrel. Even Cadbury, a lynchpin of British industry, is now threatened.

We have to rebuild British industry, but it will be difficult to do that in a European context, given the restraints that Europe places on investment in our industry, our firms and our production, and the fact that those will be highly competitive with their European counterparts. It is time to say to the Foreign Office and the rest of the Government that we have to give up the infatuation with Europe-the romantic-eyed, naive view of Europe-and start carrying out a hard, cold calculation of the costs, which are damaging to our country. It is time to stop the romance and religion, and get on with the business of that cold hard calculation.

It is a joy to follow Mr. Mitchell, who speaks much common sense on European issues, as he does on many other matters. I hope that I will not take up the 15 minutes allotted to me today, but I believe this to be a vital issue. I am not sure whether this will be the last debate on Europe before the next general election. I saw the Minister looking somewhat sceptical-and it is always nice to see people looking sceptical in debates on Europe. He seemed sceptical about whether it was our last such debate, and he may be right. Many people have said that they hope that the Minister will stay a long time in the job. I think that the electorate may well be the deciders in that regard; it will certainly not be the Prime Minister. He has to call a general election before June, whatever happens, and whether it is in May or in March, I believe that the Minister is looking at a more restricted duration in the job that he is doing.

Many hon. Members mentioned the Lisbon treaty. What is the current position in that regard? We have an EU President, who is, as you know, Mr. Deputy Speaker, a household name, and who controls 3,500 civil servants in the Council Secretariat, creating a new power base, and will now lead on negotiations as if he were a Head of State. We have an EU Foreign Minister-another household name and face-who will have her own diplomatic service, which will, I am sure, grow year on year as the EU has missions all over the world. I should imagine that the lure will be to save a lot of money and roll it all into one EU mission, and then the question will be, "Why do we need all these independent, separate British embassies and high commissions all over the world when we can have just the one with the EU blue flag flying over it?" We then have the single legal personality for the EU, which will enable it to join international organisations in its own right; a self-amending treaty enabling the EU to grant itself more powers without the need for a new treaty; the abolition of national vetoes in 60 new areas, including energy, transport and employment law; and, of course, the new EU diplomatic service.

A lot of hon. Members stand up in this place and say, "We are against a federal united states of Europe." However, we now have a President, a Foreign Minister, an anthem, a flag and a diplomatic mission-how much more do we need before we can say that we have a united states of Europe? That is the very thing that we did not wish to happen, and the very thing that the people of Britain have not been consulted on since 1975. I am sick and tired of people saying to me, "The last time I voted on this in 1975 I voted to join the Common Market." Of course, that is exactly what they voted for-the Common Market. They did not vote to join a united states of Europe with its own President, Foreign Minister and diplomatic corps. We talk about the sovereignty of this place, yet we have signed up to things and signed away rights in the name of the British public without consulting them, and we have done it in their name.

All the changes that have happened are major constitutional changes that were found in the proposed constitution. They are the major changes on which the British people were denied their say when the Government reneged on their promise to hold a referendum. Conservative Members recognise that Lisbon was merely a cut-and-paste version of the constitution. On the BBC's "The Politics Show" on 24 June 2007, just a matter of days before he became Prime Minister, the Prime Minister said:

"The manifesto is what we put to the public. We've got to honour that manifesto. That is an issue of trust for me with the electorate."

I wonder whether he now realises that one of the biggest factors in making him one of the most unpopular Prime Ministers in living memory is that he is unable to be straight with the public on any issue whatsoever. This is more important than what biscuit he likes-it is about the way in which we are governed in this country, and he cannot be straight with the British public.

To make matters worse, the Prime Minister has been totally out-manoeuvred on the European stage. One of the most important jobs in Europe has gone to Michel Barnier as Commissioner for the single market. Yesterday, Sarkozy was quoted as having said:

"Do you know what it means for me to see for the first time in 50 years a French European Commissioner in charge of the internal market, including financial services, including the City?"

It is important to stress that there is now a very important job, the holder of which will dictate what will happen in one of the most successful parts of what goes on in the UK and Europe. One senior banker has said:

"Surrendering control of the City of London to the French in return for some nonentity getting a non-job is one of the biggest fiascos of British diplomacy since Suez. The fact that Sarkozy is now being gleeful makes it worse. The Prime Minister must explain how he will protect the City from EU meddling or lose what remaining credibility he has in the City."

It is actually worse than my hon. Friend says, because Commissioner Michel Barnier is responsible not just for financial services but for the internal market. Those who greatly support our membership of the EU talk about getting good opportunities for British businesses to win business across Europe. Given that Michel Barnier is widely reported as having a protectionist past, he does not seem like the sort of person who will go around Europe opening up opportunities for British businesses.

Of course I agree. I shall come on to the non-job and the nonentity filling it, who is Cathy Ashton, a lady who has never been elected to anything and is doing rather well for herself. I would not know her if I fell over her-she is not a household name or face, yet she is now doing this job not for Britain but for Europe. A lot has been said about the need to be absolutely certain whether she is doing her job in the interests of the EU, but I suspect that the French, being the French, will very much look at what is in the best interests of France-they always do. I actually have a grudging respect for how the French always look after the French, and they have done so in this matter. We were all supposed to be gleeful about a Brit getting one of the so-called top jobs in Europe, but it did not make me gleeful at all.

We know that the EU does not yet have power over foreign policy, but I am sure that that is a work in progress. I suspect that in 20 years' time, if it does not have its own dedicated foreign policy and armed forces, it will be very disappointed. Foreign policy and defence should remain with sovereign states, and I was disappointed by a story in The Sun this morning headed, "Where the hell are EU?" It mentions the contributions of forces from other EU states to what is going in Afghanistan, which show that we are clearly not all working together. It goes through how many troops countries have there. We know that we have committed 10,000 troops to that war on terrorism, which affects everybody. Germany has committed 4,300, France 3,095, Italy 2,700, Holland 2,100, Poland 1,910, Spain 1,000, Romania 990, the Czech Republic 690, Denmark 690, Belgium 530, Luxembourg eight and Ireland seven. What the heck is going on?

This an extremely serious matter, and we should recognise that our troops fight with the Danes and Estonians, for example, who per capita have taken a bigger hit in the number of dead soldiers and have made a higher contribution. Let us have fun, but not on that subject, please.

This is a vital subject, and I am not having fun with it at all. The important point is not just the numbers, it is where those troops are. The hon. Lady is absolutely right to mention the number who have actually fallen, because it indicates what sort of role they are playing when they are out in Afghanistan. We know that there are trouble spots and other areas in which people are less likely to come into danger than a G4S security guard in a factory in London. Some countries attach conditions to the troops that they send, one of which is that it should be a nine-to-five job, and they don't want to come across any trouble, thank you very much. The chance of a body bag coming back is zero.

That prompts me to ask what we mean when we talk about Europe acting together on this vital issue. Spain, for goodness' sake, has been one of the greatest victims of terrorist attacks-not by al-Qaeda as such, but people in that country know what terrorism is, as do people in a number of other countries. The war against terrorism affects us all and we must fight the battle together, in similar numbers and without conditions. That is important, because the 10,000 troops we have given are in the areas where there is most hostility. We know by the number of deaths that have, sadly, taken place that our troops are on the front line, in the most dangerous parts of Afghanistan, shoulder to shoulder with the United States of America. That is where, I believe, the rest of Europe ought also to be. I would not dictate that there should be a Defence Minister in Europe who says that that must happen, but every Prime Minister of every EU country must look at their responsibilities and obligations regarding that war, and I want to see their countries playing their part in it as we do.

I am very much looking forward to the next general election. I am very sad that the Lisbon treaty has been signed and that the people of this country have been denied the opportunity of a referendum, which they were promised by Tony Blair and the Prime Minister. However, the reality is that we do not have that opportunity-the Lisbon treaty is law and came into force on 1 December.

It is appropriate, without going over old battles and looking at the scars, which have been mentioned, to look to the future and ask what sort of Europe we want to create. I am very much in favour of Turkey, Croatia, which I believe is next in line, and many of the Balkan states, if they wish to join, acceding to the European Union. We should not be a closed club. France and Germany are worried about how Europe is developing. They want a much deeper European Union. We clearly do not, but do we want a European Union that does not close the door on other European countries.

I am a proud member of the Council of Europe, in which there are 47 countries. Why should we turn around and tell Georgia or Ukraine, or indeed Turkey, that they can never join the European Union? They are all proud members of the Council of Europe. I believe we ought to consider expanding the EU as quickly as possible. Independent conditions should be laid down, and when countries meet them, they should be automatically eligible to join. That should be that-there should no politicking behind closed doors, as happens so much in the EU.

I was looking down the list of the great, famous Europeans who act in our name. Michel Barnier is one of the most famous- [ Interruption. ] I should imagine that my hon. Friend Mr. Francois would not be prepared to take one of those jobs. The list includes Antonio Tajani, Karel De Gucht, Connie Hedegaard, Günther Oettinger, Cecilia Malmström, and so it goes on. Our commissioners are led by José Manuel Barroso, whom people would be very unlikely to recognise if he walked into their local. All those people act in our name as part of this great European creation that has come about since we joined in 1973 and since we last had a referendum in 1975.

It is about time we struck back for this country. We get elected here, unlike Cathy Ashton, and we have a democratic right to speak on behalf of our constituents. The one thing that our electorate enjoy almost more than anything else is the opportunity to get rid of an unpopular Government and remove people they do not like. That is impossible with EU commissioners, all of whom earn considerable sums of money, as do the new President and foreign secretary. The President earns, I think, £350,000, but that might be €350,000-they are virtually the same value these days anyway. Those people, whom nobody would know, but who are governing in our name, earn incredible sums of money.

I look forward to the next general election when we will be able to give the British public an opportunity to put a party-the Conservative party-into power that will wrestle back those powers that have been given away, so that we can dictate how those powers are used. I look forward to the general election, after which we will have a sovereignty Bill, because it will give the people of this country an opportunity to put into power a Government who believe in the sovereignty of this Parliament. The next election will be vital. The Government made one of their gravest mistakes in the handling of the Lisbon treaty and denying people a referendum. It has provided a great opportunity for narrow, xenophobic parties such as the British national party and the UK Independence party to claim that they speak on behalf of the British people. Well, they do not, and I do not believe that either of those parties will have a Member of Parliament after the election. But they have been given a bigger platform by being able to claim that the Prime Minister denied the British people what they had been promised. The biggest error and the most undemocratic thing that the Prime Minister did was to deny that referendum because he knew what the result would be. He denied the British people the opportunity to vote no, and that was a shocking own goal.

I congratulate my hon. Friend Mr. Mitchell on a splendid speech, and I agree with every word that he said. Unusually, I shall strike a note of optimism about the future in my speech, because the tectonic plates have started to shift. We-apart perhaps from Mr. Davey-have moved away from a sort of theological Europeanism towards a more pragmatic tone. There is still a big gulf between those who take a critical position, such as me, and Ministers, but the tone is more pragmatic. Indeed, the Minister for Europe was praising the pick- and-mix approach to the European Union, in which Britain has been a leader, as we have opted out of several areas and taken a more critical stance than others.

I am proud to be a member of the European Scrutiny Committee. We visit other member countries, speak to people there, and our approach influences them. They are surprised to find that we are a robust group of individuals with different views. We put our views trenchantly and strongly, and if something-such as the common agricultural policy-is total nonsense, we say so. That approach is engendering a more pragmatic approach to European matters.

Another reason for optimism is the events of the past couple of weeks. We were fearful that we would have a powerful President of Europe, with a powerful Foreign Minister, and that we would move rapidly towards the supranational European state-a country called Europe-to which the theological Europeans so look forward. But that has changed. The leaders of the European nations, especially Sarkozy and Merkel, have asked themselves whether they really want a European Union with a President who would be the first person whom President Obama would call when he wanted to speak to the Europeans. They would rather he telephoned them. Angela Merkel in particular wants President Obama to call her first, not the President of the European Union. That is one of the reasons why they have promoted that very nice man, Mr. Van Rompuy from Belgium-I am gradually getting used to his name, although it has been a struggle-and Cathy Ashton. She is a very fine woman and I have met her on a couple of occasions, but she is clearly not the forceful Foreign Minister that people had imagined. There is cause for optimism, therefore, a pragmatism and a move away from the idea of a supernatural European state-I mean supranational, although theologians might want the former.

People emphasise to me that there will be no more constitutional change-certainly not towards federalism or a European superstate. The time has come for those who take a critical position to say, "Let's see if we can row back and repatriate some of the powers that have been given to the European Union, particularly in some of the most nonsensical areas, such as the common agricultural policy and the common fisheries policy."

I welcome what I see as a change of direction. My hon. Friend Michael Connarty, the Chairman of the European Scrutiny Committee, welcomed the downgrading of the European President to a mere committee chairman. That is fine by me. I would like to see a lot of downgrading, including of the European Commission. It should be opened up and made much more transparent. Let us have it all in public. Why not? They can discuss things in public. Alternatively, we could have proper ministerial control, like we have here, with a civil service that does what it is told by Ministers, rather than the other way around. The European Commission, however, has powers to tell Ministers and politicians what to do.

We have seen a drawing back. On a recent visit to a member state, we were told that the French and Dutch referendums, which were lost, were a wake-up call to the Eurofanatics and theological Europeans, some of whom have now drawn back. The pressure to move towards a superstate has been undermined. For example, let us consider the struggles over the Lisbon treaty, which only just got through-it squeaked through in the end with a referendum and the Czech President having his arm twisted so hard that he finally agreed to sign. But it was a close-run thing. I believe that the future direction of travel will involve a rowing back rather than a move towards a superstate.

I want to talk in particular about economics, because the European Union is more about economics than anything else. It has been an attempt to impose a neo-liberal economic model across the European Union as one single European entity. That clearly has not happened. Several major states, including Britain, have chosen not to join the euro, and it is unlikely-I hope-that we will ever join.

As usual, the hon. Gentleman is making a sensible speech- [Interruption.] He is making a sensible speech-I disagree with the Minister for Europe. However, is the hon. Gentleman not hugely disappointed that it remains official Government policy to join the euro?

Yes, but no one seriously believes it. We are all in favour of motherhood and apple pie, but we do not always pursue those, do we?

The fact that we were out of the euro and able to depreciate our currency gave a little protection to our industry during this appalling crisis. That showed the wisdom of our Prime Minister in keeping us out of the euro all those years ago. The Swedes have had a similar experience: they sensibly voted not to enter the euro and had a referendum as well.

There are, however, serious economic stresses inside the EU with the arrangement that it attempted to impose. The Greeks are at the sharp end of all this. They look likely to default on their borrowing and are in a very serious economic situation. The EU is unlikely to bail them out because it does not want to create what it calls a moral hazard-if one country gets bailed out, all the others will want to be bailed out. It can help one, if it is the only one, but we know that there are others. If it bails out Greece, why not bail out Ireland and some of the Baltic states? Clearly, therefore, Greece will not be bailed out.

Greece has enormous problems, and the logical thing to do-were I a Greek, I would be saying this-is to withdraw from the euro, recreate its national currency, depreciate it and then reconstruct what has been damaged internally. If that happens, other countries might do the same. I have suggested to Irish politicians-in a friendly way-that that would be a logical thing for them to do.

Ireland's natural partner economy is the United Kingdom, but the Irish have terrible problems because they are stuck in the euro up there. They blame us, saying, "It's your fault because you devalued," but if they had not gone into the euro, they would have been able to do the same thing as others.

There are also many countries in eastern Europe that are thinking twice about whether it was wise to have that economic model imposed on them. If they had kept their own currencies and gone for a balanced, social democratic, managed economy, they might have done better than by making the transition from a centralised, communist economy to extreme free market neo-liberalism. That has caused those countries all sorts of problems. If I were from one of those countries, I would certainly be arguing for a more managed economy and for those countries' currencies, saying, "Let's get a competitive value for our currency against others and work to build the economy on a sound basis for the longer term."

I am listening carefully to the hon. Gentleman, and most of what he says makes sense. One of the points that is often lost is that discussions about economics can become very introspective, with everyone talking about the European Union and forgetting that it is probably one of the slowest growing parts of the world. For our economy in the future, what we in this House need to focus on is the faster-growing parts of the world and Britain's ability to compete and trade outside the European Union, as well as with our European partners.

Indeed. Growth is at the heart of it all. As my hon. Friend the Member for Great Grimsby pointed out, the European Union has been a massive drag on growth across the European Union, but particularly in Britain. If we had not been in the European Union and instead been able to negotiate our way in the world, we would have grown more quickly. The sheer fact is that we have net fiscal transfers to the European Union that take out a chunk of our economy every year. If we had invested that money over the past 30 or 40 years, we would have a higher standard of living now. It is absolutely right to say that the European Union has acted as a drag on economic growth, not the other way round. The idea that we should deflate our way to success is quite mad.

The European Scrutiny Committee recently visited Spain-we came back yesterday-where we had some interesting discussions. Like Ireland, Spain was one of those countries that initially benefited enormously from going into the European Union. It went into the eurozone at a comfortable parity and with reduced interest rates, all of which pushed its growth. Spain also received substantial fiscal transfers, through both structural funds and the CAP. It experienced rapid growth and everything was going along nicely, but now Spain has got into difficulties. Growth has stopped and unemployment is rising; it seems likely to rise to some 20 per cent., with 40 per cent. youth unemployment.

There is an argument in Spain that says, "Let's just restructure. Let's have some reform and a bit more competitiveness." However, that will not solve a problem of that magnitude. One has to look at serious control of one's macro-economic basics and at the Government managing the economy in a direct way. Just changing the terms of trade and getting wages down in order to compete more effectively with other European nations will not solve Spain's problems. Indeed, those whom we met were quite shocked by our, let us say, robust comments on Europe, the European Union and how it operates.

I have fallen into the trap myself. My hon. Friend the Member for Great Grimsby kept referring to Europe, but the European Union is only a part of Europe. It represents a particular model of politics and economics that has been imposed on a group of nations within Europe, but it is not the complete Europe. Some countries that have chosen to stay outside, such as Norway, have done rather well. I know that Norway has oil and fish, and so on, but it has chosen to stay outside and has done rather well. I am not suggesting that we should leave the European Union, because that would be seen as bad form. [Laughter.] We want to be comradely with our fellow European nations.

We want to see radical change and a move back towards the kind of post-war social democracy that worked so well between 1945 and 1970. Lots of myths have been perpetrated about that system, but it worked well. We had steady growth, full employment, rising living standards, growing equality and growing welfare states. It all worked well, until somebody had the bright idea of destroying it all. The European Union has taken that model and imposed it on us, which has been a big mistake. We ought to rethink where we are going economically. Unfortunately, I will not be asked to do that; if I were, I would know what specific things to do immediately-but there we are.

Let me deal briefly with some of my other concerns. I have already mentioned enlargement and whether or not it is a good idea. There has been a change of mood on that, and I believe that even my hon. Friend the Minister for Europe-we used to debate these matters enthusiastically when he sat on the same Bench as me some time ago-has adopted a more pragmatic rather than theological tone, if I may use those terms again, which is very sensible, too. I look forward to more European debates with him. I am happy to have him representing our interests in Europe, as I believe he is one of the most intelligent Ministers for Europe we have had-we strongly disagree on some issues, but he has a real grip on things-and I believe that he will represent us well.

The common agricultural policy and the common fisheries policy are the real problem. If we are to roll back the European Union, that is where I would start. The CAP still takes about 41 per cent. of the European budget, which is massively distorting. France and Spain, for example-two of the more prosperous nations-are still net recipients of funding, while we are a massive net contributor. That is nonsense. I believe that each country should manage its own agriculture. We should choose what we do and do not subsidise. We should decide what level of agricultural production we want in our own country for security reasons. It is wise to retain some degree of agriculture for the long term. A country that cannot produce sufficient for itself is a poor country.

Does the hon. Gentleman agree that although so much of our money is going to support European agriculture, a lot of it is being hived off for the bureaucracy, and this country still has farmers-certainly dairy farmers in my constituency, for example-who are going out of business simply because they are producing at a cost greater than the price they can get for their milk? Is not the CAP letting them down badly?

Indeed, the whole thing is a bureaucratic nightmare. All those organisations and structures are always inefficient. I think that the polities or Governments who can make the best decisions on behalf of their agriculturalists are the national member states. Our Government would make much better decisions about how and what to subsidise than any European Union could ever do. The milk producers would have a much better time if they were looked after by our Government rather than by the European Union.

Let me finish by saying that the biggest nonsense of all is the common fisheries policy, which has led directly to the over-fishing of our seas. They will not be restocked, I believe, until we abolish the CFP and re-establish the national waters that used to be recognised, so that each country has responsibility for husbanding its own resources in its own fisheries. The issue would be taken more seriously in that case. While it is possible to fish in other countries' waters and land "black fish" as they are called-effectively cheating on the system and over-fishing elsewhere-countries will carry on doing it. Only when they have the responsibility for managing their own waters will we start to see fisheries restocked as they should be and a more sensible approach to fishing. We all enjoy fish, and as we have been told over the last couple of days, the Spanish enjoy them more than anyone else. Unless we go back to that system, however, we may finish up not being able to eat any fish at all. I would have liked to have spoken for longer, but perhaps I have said enough.

There has been a lot of debate this afternoon about influence and securing positions, and we have discussed how the work of the European Parliament can impact on the UK's influence on legislation and other matters. Having been a member of the European Parliament for five years-more than five years ago now-I know that there are interesting contrasts between debates there, where one is allocated two minutes at 8 pm so that one has to sit down at 8.2 pm, and debates here, where there is genuine discussion and testing of arguments as a result of interventions and so on.

The problem in this Parliament, partly because a party is either in government or it is not, is that there is no real communication between the parties aimed at reaching a consensus. That may be a good thing in some ways, but it often means that the views of minorities are not taken into account in quite the same way. The voting system in this Parliament means-we saw this happening last night-that amendments sometimes cannot be debated or voted on. At least the European Parliament could vote on 300 amendments in the space of an hour, and Members could table amendments in order to put down a marker. Even if they knew the amendments would not succeed, it would allow them to smoke out the opposition, who might have to declare their position.

There has been much talk about the new Conservative group in the European Parliament. There has been some criticism from Labour Members, much of which is, I think, due to a misunderstanding among both the wider public and the political elite-if that is the right word for the House of Commons-of the way in which the European Parliament works and influence is brought to bear. That is not helped by the fact that our newspapers rarely, if ever, report on the ministrations and machinations of the European Parliament. Only The Financial Times seems to take the processes there seriously. Today a Liberal Democrat made the sensible suggestion that a European Question Time in the House of Commons might provide a useful way of separating European policy from wider foreign policy.

I hate to disagree with my hon. Friend, but throughout the debate only one Liberal Democrat, at best, has been present. I really do not think we should be taking too much advice from the Liberal Democrats on Europe, especially after their performance last night.

Even the Liberal Democrats-dare I say it?- occasionally come up with good ideas. I know that that is a controversial statement.

The Conservative party used to sit with the European People's party and the European Democrats, the biggest group in the European Parliament. The European Democrats "bit" was the Conservative "bit". It was recognised that the British Conservatives had a separate Whip. The reason for that was the fundamental difference between the British Conservatives' vision of Europe-I suppose it could be summed up by the famous slogan of my right hon. Friend Mr. Hague, "In Europe, not run by Europe"-and the majority of the rest of the European People's party, who were intent on establishing a federal united states of Europe.

That system worked well to a degree. Many of us who were MEPs engaged well within the group. I was a deputy co-ordinator in the environment committee, and a member of the bureau. However, there was always a niggling doubt about whether the thrust of the group's policy was going in the direction that the majority of the people who had voted for me in Scarborough and Whitby at the last election would have wished. I was delighted when our new group was formed because it allowed us to be a good neighbour to the EPP, rather than an annoying and irritating tenant from time to time.

I predict that the operations of the EPP group and the new Conservative group in the Parliament will work very well. Having been a member of the environment committee, I know that in order to secure the majorities that are needed-particularly on Second Reading, when a majority among those eligible to vote is required rather than a majority among those who turn up on the day-it is vital to get the other political groups together and, often, to forge a compromise agreement. I am sure that the new Conservative group will be the first port of call for the EPP when it wishes to get its amendments through. I often found that I had to do deals with all sorts of people-green communists, former communists, Liberal Democrats and, on many occasions, socialists-to get amendments through.

The criticisms levelled at the new group are largely unfounded, and I do not believe the British Conservatives will lose influence as a result of the new arrangement. As has already been pointed out, Malcolm Harbour, an excellent west midlands Conservative MEP who used to work in the motor industry, will chair the internal market committee. I can think of no one more suited to advancing the work of that committee. Philip Bradbourn, another west midlands MEP, is to chair the committee for relations with Canada, and-this is more significant, in my view-Struan Stevenson is to chair the committee for relations between the European Parliament and the new Iraqi Parliament. Those are important positions of influence.

Every committee also has a team of co-ordinators who dole out the reports and sort out the business. In the past, it was often frustrating when there was no Conservative, or even like-minded EPP, co-ordinator. Deals were done behind closed doors without our being involved.

The new group will have a co-ordinator on every single committee, which means we will have a voice on every committee when those important reports are given out. [Interruption.] The Minister says we will not get any, but only last week Martin Callanan, a British Conservative from the north-east of England, secured the very important report on light commercial vehicles and CO2-I am sure Kelvin Hopkins will be interested to learn that that report has been secured by a British Conservative-which will enable him to take that legislation through the Parliament in the same way as a Westminster Minister takes legislation through this Parliament, and steer it in the right direction.

I therefore strongly feel that this new group will be able to secure such important reports. Indeed, we might do particularly well in securing smaller reports. I remember that the EPP and the Socialist group would often save up their points for a bidding battle on a very big report, and the smaller groups such as the Union for Europe of the Nations and the European Democratic party would therefore pick up along the way many smaller reports, which nevertheless had a lot of influence on business and employment in the fields they addressed.

Many people do not understand how the rapporteurs and co-ordinators work; when people do, they can understand just how much influence we will have. That particularly comes into play in the context of conciliations. I was a member of the EPP's conciliation group. We had meetings that went on late into the night, sometimes finishing at 4 o'clock in the morning. I remember a meeting on the waste electronics directive. We were very keen to prevent the producers of printers from making printer ink cartridges non-recyclable by putting a smart chip in them, which would mean that they could not be replaced. I and a Liberal Democrat Member, Chris Davies, threatened to walk out, make that committee inquorate and force the Environment Council to give in on that point. That is an example of a Liberal Democrat who represents a small group being able to make an important impact on the work of the Parliament. The European Parliament is not like our Parliament, where we are either batting or fielding. There, we all take turns to bat, and the new group will have some very good opportunities to do so.

Bizarrely, it has also been said that President Sarkozy and Chancellor Merkel will not talk to the leader of my party if the Conservatives are not in the same group as their parties. It is interesting that they talk to the current Prime Minister of this country, even though he is in a different group that is diametrically opposed to their views.

One particularly frustrating aspect of my time in that Parliament was that, in trying to cobble together deals and get vital majorities in Britain's interest, we were often working closely with officials and Ministers of the British Labour Government, but their own Members of the European Parliament refused to take the advice they were getting from Westminster. Instead, they sometimes sided with their European socialist colleagues and blew legislation out of the water. I am thinking in particular of the large combustion plants directive. We sought amendments to exempt some of the smaller coal-burning stations that operated for short periods at peak demand. The advice from the British people in Brussels-the United Kingdom Permanent Representation-and from British Ministers was that we should get those amendments through to protect our coal mining industry and those coal stations in case of peak demand. However, Labour MEPs combined with colleagues in the European Socialist group to undermine those amendments and prevent that from happening. As we warned at the time, that has contributed to some of the energy supply problems we now face in this country.

Many of the new Members of the European Parliament from newer states such as the Czech Republic and Poland very much share our view that we should have a Europe of independent member states. That may be because they have experience of being dominated by another capital-Moscow-and do not want quickly to exchange that for another situation where domination, albeit more benign, can be imposed from Brussels.

Whatever happened to subsidiarity? Perhaps the Minister will address that in his winding-up speech. I remember that when I first arrived in the European Parliament, subsidiarity was the buzz word. The fashionable topics were devolving power down to member states and only making decisions at the European level if that was absolutely necessary. In the new treaty, however, things are going in the opposite direction, which is a great concern.

I am very proud that Polish and Czech members from mainstream parties in their countries have joined us in our group. Some of the criticisms that have been levelled at my colleagues-especially Michael Kaminski, whom I have known for six or seven years-are absolutely unfounded and I hope they will not be repeated in this Chamber.

A lot has been said about the waste involved in Europe and the fact that its budget has not been signed off for 14 consecutive years. I speak as a farmer who has received common agricultural policy aid, but the CAP has distorted markets and, in particular, third-world access to them. How can anyone justify spending €1 billion of taxpayers' money every year subsidising tobacco production in southern European states? Much of this tobacco is of such low quality that it cannot be consumed in the European Union and has to be exported to third-world countries, where, obviously, it contributes to health problems. How can that situation be justified?

How can the Strasbourg Parliament be justified? It is outrageous. I recall the frustrations of having to pack my stuff into those tin boxes-we always missed out the important file that we should have taken-and of trying to work there; the expense of travelling there, and of transporting all the officials there and putting them up in hotels; and the difficulties of working there. One way to make progress would be to prevent the continuation of the Strasbourg fiasco.

I shall discuss two European institutions that I have not even heard mentioned in this Chamber in the nearly five years that I have been a Member: the Committee of the Regions and the European Economic and Social Committee-ECOSOC. Now that the European Parliament has come of age-now that we have co-decision on fisheries and more co-decision is coming into the Parliament-what justification can there be for the duplication that ECOSOC and the Committee of the Regions represents? When I was in the European Parliament, I discovered, by accident, that a report I was handling on motorcycle emissions was also being discussed in the Committee of the Regions. I do not know what happened to the results of those deliberations-they certainly were not communicated to the Parliament. They might have been communicated to the Council, but I never heard Ministers or officials referring to the concerns that had been expressed in the Committee of the Regions.

That is bad enough, but then there is the cost to consider. The Committee of the Regions has a brand new building-it might be four or five years old-on rue Belliard in Brussels. I managed to find the accounts for ECOSOC, from which I discovered that its annual budget is €120 million. The committee does not give money out to people to do things; it is a purely bureaucratic organisation that discusses matters and duplicates the work of the European Parliament. May I make a suggestion that the Minister might like to adopt if he gets the opportunity to see how these committees can be reviewed? We got this suggestion through the environment committee in the European Parliament, but it foundered at the plenary session. We said, "If member states are so keen for the Committee of the Regions and ECOSOC to continue to do their work, why don't they pick up the bill for the subsistence and travel costs of the members from their own countries?" Why not have such costs justified at the Dispatch Box in this House when the Budget is considered?

I suspect that if we had to put our hands in our own pockets, rather than just relying on the European budget, we would look more closely at the work of these committees and ask whether we really need them. I suspect that we would ask whether they are now superfluous because the European Parliament has developed from a talking shop to a real legislature, and the two committees are still mired in that talking shop situation. I hope the Minister will think about this matter, and if my hon. Friend Mr. Francois becomes the Minister for Europe, perhaps he will think about how we can save some money and restore some common sense.

People are perhaps disenchanted with Britain's membership of the European Union now. I am enthusiastic that Britain should remain a member, but I am disappointed that people did not get an opportunity to vote on the Lisbon treaty. Such a vote was promised by all three parties at the previous election. There is no point in having a referendum now; there is no point in closing the stable door after the horse has bolted. Nobody should be in any doubt as to who is responsible here-it is the Prime Minister of this country, who denied people the referendum we thought Tony Blair had promised us.

Europe should be more democratic and closer to the people. By signing up to the Lisbon treaty, the Government have moved in the opposite direction. They must be aware of that, as they were punished at the European elections with the lowest share of the vote ever achieved by the Labour party in a national election. I believe that they will be punished again at the next general election.

It is a pleasure to follow Mr. Goodwill, who is one of the few people who understands how the European Parliament works. He is quite right about those committees. At one stage, about six years ago, I thought that we were at a point at which the Committee of the Regions had been abolished and had fallen off the table but, like everything else, it just crept back in again.

I am very sorry that Mr. Hague is not here today. Last time we had a debate on the European Council I offered him a wager that the Conservative party would not have left the EPP group by the time of the next debate. I am happy to say that I was wrong, but in time, he will probably realise that he was wrong to have done that.

I know that we have talked a lot today about the Lisbon treaty and everything associated with it-perhaps this will be the last time that we talk about it-but we do need to consider a project that has taken eight years of gestation to come to fruition. Looking at the result, I would not recommend eight years of gestation. Another thing that strikes me, looking at the list of Commissioners, is that I recognise names like Karel De Gucht. These people were around during the Convention on the Future of Europe. The address book of the European Union is extraordinarily small. We are talking about 350 million people, but that political elite recycles itself. I include Commissioner Barnier in that, because he was a representative of the Commission at the time of the Convention. I remember him, on one occasion, defending most persuasively the idea that the provisions for subsidising the French film industry had to remain by unanimity because they were good for France and therefore good for Europe. In my discussions with him, I have not seen him to be the greatest liberal free trader-but I hope that the leopard has changed his spots.

As I listened to the debate I wondered how the Opposition would have reacted if Britain had got Mr. Barnier's job and a French person had got the High Representative job. I am sure that some would have said that it was a great triumph for the French to have the foreign portfolio. It always strikes me that we all peddle the national xenophobia and stereotypes with such great joy. In particular, the entire speech by Mr. Evans was permeated by the extraordinary realisation that Europe is full of foreigners, and he does not recognise them. They probably feel the same about him. Let us move on from that, and talk about the important things.

One of those important things is the disgraceful situation with regard to the referendum. It was promised by all three parties, but I would say that all three parties reneged on their promise in different ways. Labour pretended that it was a different document, and the Lib Dems changed the question; they had to, otherwise the noble Lords would have revolted, so it became a question of whether to be in or out. The Opposition were very clever, particularly the right hon. Member for Richmond, Yorks. He made us laugh during those Lisbon debates. He was so funny that I even purchased a copy of his speech on Second Reading. It was worth it.

The question is, why did the right hon. Gentleman make us laugh? He made us laugh to cover the fact that there was no real opposition from the Opposition- [Hon. Members: "Oh!"] Indeed not. They agreed to the programme motions, although they could have negotiated a different debate. There was no serious attempt to do so, because in the hope of winning the next election, the last thing that Mr. Cameron wanted to have on his hands was a European referendum, and for the question of Europe to be reopened.

That brings me to the Leader of the Opposition's other promise about a referendum when powers are transferred in future. I have really bad news for him: what further powers does he think will be transferred on which he can have a referendum? Such cases will either already have been moved to qualified majority voting or will be subject to the passerelle clause. By the way, his suggestion is that a passerelle clause will be subject to the full parliamentary process.

So there is no change then, is there? Hon. Members should remember that in our parliamentary system Governments have the majority-that is why they are the Government-so they can always whip through votes. A Government that went to Brussels and agreed on the passerelle vote but thought that they might lose the vote here would be a pretty ropy Government, so that point is meaningless. As for a sovereignty Act, I think a sufficient number of people have already said what nonsense that idea is, because it implies that we do not already have sovereignty. What if there were not a Conservative Government next time around, or if a successor Government repealed the Act? Would that imply that we no longer had sovereignty? If that is not so, what would be the point of it?

Will the hon. Lady give way?

I will, but only this once.

The problem that the hon. Lady is missing is the competition for sovereignty between the primacy of the European Court and the sovereignty of the UK Parliament. Where there is uncertainty, which there certainly is regarding declaration 17, which is annexed to the treaty, the Supreme Court will-not may, but will-take a position regarding which of those two prevails. The way in which the Court is moving makes it more likely to go along with the idea of the primacy of the European Union, and, if necessary, to take the matter to the European Court, which would be definitive in relation to the Costa and Handelsgesellschaft cases and all the others. That is the real problem, and that is why the sovereignty Bill is necessary and has to be comprehensive.

I thought that the hon. Gentleman would take that view, but I disagree with him. Sovereignty to me is a bit like pregnancy: one either is or is not. However, his point leads to me something much more important. Rather than screaming about sovereignty, this is about the presumptions of the negotiations. People have already mentioned financial regulation. The headline "Darling loses key EU battle over fiscal sovereignty" has been brought up in relation to the presumption about the burden of proof. The presumption is not that the Commission has to justify what it is doing; the member state has to make a case, on a majority, that what is being done is not justified. The real way around this is to change those presumptions. The hon. Member for Scarborough and Whitby talked about what has happened to the word "subsidiarity". My argument is that rather than argue about reclaiming powers, we should have a different presumption.

Subsidiarity has disappeared from the scene because it does not work. In the past 10 years, the Commission has only ever had one proposal rejected because it was deemed to breach subsidiarity-the zoo directive, which we tried to bring in during our presidency. That is hardly a great record. Every EU directive that comes forward ought to contain in the preamble proof that the measure cannot be implemented in nation states, and therefore has to be handled at EU level. That would change the whole argument and would mean that rather than people always having to defend what is done at EU level, the EU would have to make the case that the nation state cannot do certain things.

That point brings me to an issue that we never mention here. The debate is about European affairs, and we ought at some stage to talk about the nature of the nation state. I want to do that briefly today. What is our relationship? We say that Europe is great because we are all in favour of co-operation, but co-operation and political integration are two very different things. We saw this earlier when we talked about fiscal stimulus. That was not about political integration: it was about co-operation, and member states doing something at the same time.

The reason why I am so angry about the referendum is that with the passing of the Lisbon treaty, we have created a supranational institution. There is all the talk about rowing back, but it has gone. Forget it, folks; it has been sold. There is now a supranational institution that has never had the endorsement or consent of the 350 million people across the European Union, because referendums were either ignored or were rubbished on the basis that the issue was too complicated and people were too stupid to take part. That is an argument worth talking about. Governments should show leadership and take people to places that they do not yet know are good for them-but although political leaders have to adopt that leadership role on occasion, there is always the reality test of a general election, when a Prime Minister who takes the country in a direction that it disagrees with gets kicked out.

There is no mechanism in the EU that allows the people to be asked whether this new supranational institution is what they want. My suspicion is that they probably do not, but that is neither here nor there. I have become agnostic on this matter. I grew up in a federal state so I have no problem with federalism, but I also remember the Austro-Hungarian empire- [ Interruption. ] Not personally, of course, but I grew up with its heritage. That extremely authoritarian institution finally collapsed because it tried to replace national identity with ethnicity. It is always very bad when identity is represented through ethnicity rather than through institutions in the nation state, and we need to be extremely careful in that regard.

As usual, the hon. Lady is making a very powerful speech on Europe. Can she tell us what the solution is? We are now part of this supranational entity, even though there has not been a referendum. How do we change that, and get the situation back to what I believe both she and I would prefer?

I think that it is extremely difficult. A couple of weeks there was a programme on Radio 4 called "Analysis: Divorcing Europe", which was starting to look at some of the options for challenging these presumptions.

I want to make two other points, and the first is about this place. We are kidding ourselves if we think that by voting on Select Committee Chairmen, setting up better visitor centres or going online and so on, we will achieve a deepening of parliamentary democracy. We are losing power every step of the way: we have not even begun to come to terms with how we deal with legislation coming out of Brussels, because merely being told more about it is very different from actually having power and influence over it.

We have devolved power to Wales and Scotland, but we did not think about what would happen to England as a result of that process. We sit in Westminster, but we have lost power on both sides and we have lost our purpose. I suggest that that is why the expenses scandal has been so damaging. We have failed to defend ourselves, individually and collectively, because we have lost our sense of purpose as an institution. The real challenge for the next Parliament, when it comes in after the election, is to remind itself that its function is not just to talk about things but to hold the Executive to account. We have singularly, totally and completely failed to do that in respect of Europe.

I shall finish with one example to illustrate that. We have known that there was going to be a President of the European Council and an External Action Service, because they have been in the pipeline for years. Nothing has changed: it is just that the negotiations have dragged on, but do we know what the Government's position in those negotiations has been?

I have here a letter to the Chairman of the European Scrutiny Committee, dated 20 November. The Europe Minister always glares at me when I say something, and then he always assures me that my challenges are baseless. However, I want him to prove that he can be a serious politician and engage with the question that I am putting to him. I should like some precise answers to the questions raised by the letter, which speaks of the

"establishment of the European Council as an institution under the Lisbon Treaty".

That is important, because it is the first time that the Council of Ministers has been recognised as an institution. The fact that it is an institution that can define its own powers is much more significant than who the current President is. At the moment it might be a Belgian, but it could be anybody in five, 10 or 20 years' time.

The rules of procedure will be agreed. The letter says that

"a set of Rules of Procedure for the European Council" is being drawn up,

"which we expect to be tabled for adoption by the European Council either at the December European Council or by written procedure".

So if we already have the rules of procedure-if it is known what they will be-it would be helpful for the House to know them. I hope that the Minister does not just fudge things by saying that this will be done by written procedure, and the House will not be involved. We need to know what the rules will be, because that will decide who draws up the agendas and final conclusions, and who has a role in the Internal Affairs Council. It is no good the Minister frowning like that; these are incredibly important institutional questions about which the House is never told, and which we are never even given the chance to discuss. We would like to see the draft text and know what the review procedure is.

As I have said, this is the last such debate before the general election. An extraordinarily select few Members keep turning up, and 90 per cent. of the speeches that we give could be, and probably have been, given at every one of our six-monthly debates, so I suggest that we take them seriously. If they are meant to be about European affairs and the run-up to a Council, will the Minister give me some indication whether any Foreign Secretary, on going to a European Council meeting, has changed their mind or position as a result of such speeches?

I am extremely glad to follow Ms Stuart, although I do not agree with her about everything, particularly the sovereignty Act, which will give us a genuine opportunity. I certainly would not say that out of deference to the leader of my party or my Front-Bench colleagues; I say it only because I believe it.

None the less, what the hon. Lady said was based on knowledge. I very much agree that these debates are badly attended, and I deplore the fact that people are besieged and completely cowed by the complexity and the labyrinthine bureaucracy lying behind so much of what is churned out by the European Union. It is encapsulated by what Giscard d'Estaing-or it may have been somebody else, but it does not matter-said about the Lisbon treaty: it was made complicated deliberately so that nobody would understand it. That is how we are being governed.

This is not about government through the European Union; it is about power and control over our Government through majority voting and the lethal power of co-decision. It is about the transfer of power, no less than during the 1640s, when movements were made towards a constitutional monarchy but were denied by civil war, which was followed by the execution of Charles I and the restoration of the 1660s. We transferred power away from the Stuarts after James II to the Hanoverians, maintaining the fiction that we were preserving the monarchy. Actually, it was a transfer of power. That is what this is all about.

The same happened again in the 18th century, followed by the Reform Acts. The hon. Lady represents Birmingham, as did John Bright, and the great Reform Act and the granting of the vote to the working class were followed by the secret ballot and then, thank heavens, by the vote for women in the 1920s-that was the transfer of power. Then came the European Communities Act 1972, which was a real transfer of power. That is why she is right when she talks about a referendum, as I have done so often. In 1975, the Labour Government, to their credit, gave the people of this country the opportunity to express their view. I know which way I would vote. I voted yes in 1975, but I would not have done so if I had known what would happen. I voted that way not because of ignorance or naivety, but because we were lied to. That is the bottom line. We were told that we would be given the opportunity to engage only in the European Community. We were told in the White Paper-I remember it very well-that we would keep our national veto because it was in our vital national interests to do so. The White Paper went on to say that to do otherwise would undermine the very fabric of the European Community. The veto was necessary, according to the White Paper, for the sake of the European Community, which has become the European Union.

The reasons why we need to have a referendum are absolute. The people of this country are being denied the opportunity to have their say, and they ought to have their say because many millions of them were born since 1975, and they have been denied the opportunity to express their view. It is really important that we have a referendum, and I have by no means given up on the idea that we will have one through a Conservative Administration. We need one sooner rather than later, but that is only part of the problem.

The real problem, which is associated with the reasons for the referendum, is that there has been such a significant change in the functions of the European Union. Much more power has been transferred to the bureaucracy and to the labyrinthine process that I witness every week at the European Scrutiny Committee, on which I have sat for 25 years. I may add that I have been consistently outvoted, because every Committee in those 25 years has been packed with people who vote the other way. I say with respect to Kelvin Hopkins that, occasionally, he votes with me, and I am grateful for that, but such support is contrary to the normal trend. Indeed, on crucial matters, such as the assessment of treaties, I have to write minority reports.

I agree with the hon. Gentleman, but I am sure that he is aware that there is growing scepticism throughout the European Union, and particularly among the young. The Eurobarometer opinion poll shows lower support each year for the European Union, particularly among the young, and that is an optimistic finding for the future.

That may be true, but the problem is about political will and the opportunity that people have to express those views not just in a referendum, but even in this House. People are faced with mind-boggling complexities, and it is completely impossible to run the country. We are in charge but not in control. We are not governing the country in line with the democratic wishes of the people. As I said in The Daily Telegraph the other day, we are merely acting as managing agents for the European Union.

The situation is exactly the same when we come to the argument on financial services. We have been through that issue, I have spoken about it over and over again in the House, and I have written to the Financial Times about it many times. We are told that we will have national supervision, but we should forget that, because, as I said in the financial services debate the other day, rules, which will be imposed on us by European regulations, will require certain actions. The question of whether the Commissioner is Monsieur Barnier or anybody else may be important, but the real question is, where does the power lie? As of yesterday, when we allowed the relevant measure to go through and the Chancellor of the Exchequer made his deal, the City of London was effectively no longer able to exercise that power over financial services.

I have been critical of the trade associations in the City of London for allowing that supranationality. In the papers today, I have seen some incredibly hypocritical cant from the leaders of those organisations, who could have put up a real fight but allowed the whole thing to go through, putting 15 per cent. of our gross domestic product at risk. Indeed, I was very glad of the support of my hon. Friend Mr. Field when I spoke in the debate two days ago. He agreed that the practitioners whom he had met-he is more likely than many of us to meet them-realised that the situation was not good for their businesses. Many young people are leaving the City of London to go to Zurich, Monaco and other places precisely for that reason.

The real question is one of power and sovereignty, and that is why I applaud the sovereignty Act proposed by my right hon. Friend Mr. Cameron. I have had discussions with him and my hon. Friend Mr. Francois about it, and I will continue to have them because I do not give up-ever. They know that we must have a proper sovereignty Act. My point to the hon. Member for Birmingham, Edgbaston is this: the competition of the sovereignties is very real and we cannot allow ourselves to be run by a judicial autocracy; there is the political power to consider.

In March, in an important speech on the Human Rights Act 1998, Lord Hoffmann set out his objections to the way in which the Strasbourg Court was arrogating to itself federal, judicial and quasi-political activity. The same could well apply to our own Supreme Court, for the same sorts of reasons. In his very important Maccabean lecture, Sir John Baker, one of the greatest of all legal historians, launched a proper and incisive attack on how Parliament-this Parliament, here in Westminster-has allowed itself to lose its credibility, as the hon. Lady has also said.

We have lost credibility, not so much in respect of the kind of questions that have been blasted all over the newspapers, although those have contributed, but because we have lost the confidence to exercise our role of accountability in respect of the Government of this country, who themselves, at one remove, have abdicated their responsibility by their policy of appeasement on the European Union.

On the question of competences and sovereignty, does the hon. Gentleman not agree that the Lisbon treaty creates a competence to create competences? The question of sovereignty is not so much a problem with the courts, as with the fact that the treaty can organically create its own powers. That is beyond the reach of any sovereignty Act.

That is not so, I am afraid. I shall not spend the rest of my speech explaining why, although I will be happy to talk to the hon. Lady about it later. I shall be dealing with the matter in due course in Parliament as a whole.

The hon. Lady referred to the competence question. In relation to the German constitutional court, I have argued for a long time-not in an anti-German sense, but simply because that country is the predominant force in Europe-that Germany is creating a situation in which it determines, through the Karlsruhe court, whether its own constitution will determine the future of Europe. The court is saying that Germany will not do anything inconsistent with its constitution. Gerhard Schröder put it this way a few years ago: "I am European because I am German." That is important because we have to understand that this is about not only the law but matters of foreign policy and the national interests of individual countries represented as the member states of the European Union.

There was a similar situation, although a long time ago, with regard to the development of the United States. John Taylor, a great ally of Thomas Jefferson on states' rights, set out unequivocally the basis on which in the United States constitution the states' rights were to be absolutely at the heart of the American federal system. The European Union does not exactly have a federal system, but all the necessary ingredients are there, with one great exception. In relation to economic competitiveness, the single market is governed by a uniform system that, as I said in the debate on the financial regulations, prevents competitiveness. We do not have states' rights in the European Union. One reason for the success of the American economy has been those states' rights, which have created an economic environment within which the United States has been capable of developing its economy. We have a mixture of political failure and over-exuberance-perhaps even over-indulgence-in the judicial field, in respect of the European Court of Justice and, quite probably, of our own Supreme Court.

In addition to that, we have economic failure. The reality is that Europe is not working. There is very high unemployment, as there always has been. I said this during the debates on the Maastricht treaty as well. The bottom line is that there is interference in every nook and cranny of every part of the lives of the people whom we represent. It does not work; that is why we need to have renegotiation.

In a referendum, which I believe is still essential, the question that I would put, as I said in The Daily Telegraph the other day, is "Should the United Kingdom renegotiate the terms of its relationship within the European Union?" That is not an "in or out" question, but, believe me, if we presented it to people we would get at least 80 per cent. saying yes, we should renegotiate those terms. That would then enable the United Kingdom to lead the process of renegotiation to turn this increasingly amorphous, homogenous and utterly useless organisation into something that could work effectively on the basis of political co-operation and trade-a semi-EFTA, or European Free Trade Association, arrangement-and get rid of the notion of European government, which is completely autocratic and is destroying our democracy.

These are not just the rantings of a Eurosceptic. This is about good government and democracy, and proper accountability, in relation to the wishes of the electorate whom we are supposed to represent. I agree with the hon. Lady about the Committee on Reform of the House of Commons set up under the chairmanship of Dr. Wright. That is only nibbling at the root of the problem of how to return real accountability to this House. We should rediscover the confidence to be able to hold the Government to account and to ensure that we are not just run by the Whips through a process of advancement, preferment, ministerial office and whatever else. We represent the people of this country, and it is our duty and task to ensure that we are guaranteeing that they are governed in a proper and sensible manner. By ceding this massive degree of control to the European Union, we have abrogated our responsibility.

I can understand that in 1945 people did not want to have another war in Europe. My father was killed in the war. However, times have changed. The problem is that the arrangements that were set up and the development of the functions of the European Union have not kept pace with what is required. We have allowed more and more integration when we should have been creating an association of member states. That is what we should have been doing, and that is what we have to come back to; otherwise the people of Europe will suffer as well as the people of the United Kingdom. We have to restore to the people, through the ballot box, real democracy on the ground. This is not just a theoretical and ideological approach-it is about making Europe work in the interests of the people whom we represent, as we are completely failing to do so.

We are told that we have to put the economy ahead of the European issue, but the trouble is that the economy is affected by the European issue. There is over-regulation, which costs European businesses €600 billion a year. There are the problems of the common agricultural policy, the common fisheries policy, and so on. We have to restore government to the people of this country. That requires a referendum of a proper kind, which I will continue to insist on, and a sovereignty Bill that would ensure-I have a wording that would achieve this objective-that we have a template against which we can repatriate powers and force renegotiation within the European Union. That is our objective, and that is what we must achieve. It is in the national interest, and we must do it immediately.

As always, it is a pleasure to follow Mr. Cash. I did not vote in favour of entry into the so-called Common Market in 1975, and I was a loyal supporter of the Labour party in 1983, when I thought we had a rather good policy on Europe. Some of us have not changed our minds and will continue not to.

I shall be brief, because I know that other hon. Members want to get in. As always in such debates, we could say a lot more than we have time available to say it in. I shall start in the same vein as my hon. Friend Kelvin Hopkins by being optimistic. Where Europe is at its best will be seen this weekend in our contribution to the Copenhagen debate. It is right and proper that we have a unified approach and put forward how the UK and the wider EU intend to reduce their dependence on carbon. I hope that we will not only talk the talk but walk the walk and make tangible proposals for how we can reduce our carbon dioxide emissions.

On that point, we all want a deal at Copenhagen.

In my speech earlier, I said in reference to a debate in the European Parliament that five socialist-aligned MEPs had voted against a motion. I have since double-checked that, and in fact they abstained. I therefore wish to take this opportunity to correct the record, and I hope that the hon. Gentleman will forgive me for intervening on him to do so.

I am pleased that the hon. Gentleman has corrected the record. I do not quite know how people can abstain on climate change, but there may be some wonderful explanation in due course.

Another area in which the EU has a credible record is international development. When we go out into the field, we see that there is greater co-operation between the nation states of Europe. I have sometimes criticised some of them for not paying the contribution that they should have done, particularly for provision in the country that I care most about, the Sudan. However, it makes sense that we have international relationships so that by pooling our budgets and expertise, we can make more of a contribution on the ground.

I turn to matters on which I am far less optimistic than my hon. Friend the Member for Luton, North. I shall be quite brutal about the non-referendums. The "cast-iron guarantee" of the Conservatives, which was nothing more than words, and what has happened with my own party and the Liberal Democrats, show why the British electorate have no faith in any of us when it comes to Europe. Each of our parties in turn has let them down. We promised them a referendum and have reneged on it. Anyone who thinks that that has been forgotten about forgets the European elections in May, in which the electorate gave us a kicking-particularly my party, whose policies and position on Europe are anything but credible. They will not forget it at the next general election. That is why some of us will not be standing on a platform other than to say, "It will not be a question of a referendum on Lisbon; it will be a question of a referendum on in or out."

I agree entirely with my hon. Friend. We had a mini-referendum on the referendum in Luton, which was won by a massive majority. I spoke loudly in favour of a referendum with a loud hailer from the top deck of an open-top bus. We had a vote and there was a massive majority in favour of a referendum.

I am pleased to hear that. I ran a constitutional change survey in my constituency called "Up for debate", which was about a wide range of changes to link in with the work of the Select Committee on Reform of the House of Commons, chaired by my hon. Friend Dr. Wright, of which I was pleased to be a member. It was interesting that about 70 per cent. of the people saw a need for referendums, and not necessarily only on European affairs. In the written text accompanying the poll, most people said that the fact they were denied a referendum on Lisbon made them feel more strongly that we should have referendums on a range of issues, particularly the EU.

I say this to those on both Front Benches: their credibility is lacking when it comes to the electorate, who will punish people who refuse to give a referendum because they want a say on the future of Europe. I do not know what the outcome will be, or whether people will vote to stay in the EU. The polling evidence shows, as my hon. Friend said, that more than anything, the younger the person is, the more sceptical they are. I am not surprised at that, because they feel completely divorced and detached from the European monopoly and an organisation that seems to be sucking in even more power, but has nothing in common with what they believe. We must test the water not only in the UK, but across the whole of the European superstate. People will become even more sceptical. That is why we must lead the way-not be in the following caravan-by giving people who want to stop increasing federalisation a genuine chance to express their opinions.

As a matter of elucidation, is the hon. Gentleman in favour of referendums in principle-on Europe as much as anything else-or is he just against the breaking of pledges on referendums?

I want a referendum because I want a fundamentally different Europe. The EU has evolved completely beyond what even the most sceptical and pessimistic of us envisaged at the beginning. I felt that the EU would eventually fail as an organisation and become a very loose confederation. Sadly, I have been proved wrong. As my hon. Friend Ms Stuart said, those at the core who have driven the process forward have been such a tight-knit cabal and so clever that they have been able to manipulate the processes. They have left everyone else behind. The political parties have been sucked into it-more fool them, because we need to recognise that people outside feel detached and discontented with what is happening.

I chided my hon. Friend Mr. Mitchell on the decline of manufacturing, which is my second and final point. As I said, ownership matters, and we have seen the ownership of our great industries such as energy and water, and particularly our great manufacturing base, gradually drift abroad. We have ended up in the most ridiculous situation. Barely 11 per cent. of our gross domestic product comes from manufacturing, which is completely untenable and unacceptable. That must be reversed as a matter of urgency.

Just for the record, has the hon. Gentleman come across the extremely important work in which Roland Vaubel deals with that problem-in relation to not only manufacturing, but all legislation that affects employment and social law-and demonstrates that regulatory collusion exists? It is a very serious work by a professor of economics at Mannheim university. He demonstrates the manipulation of majority voting, which will be made worse by co-decision, as a result of which certain countries get their way by using the institutional system that the Minister so foolishly says is unimportant. That is how people serve their own interests.

I do know of that, but I would trace the problem back even further. Martin Wiener and Correlli Barnett trace it back to the 19th century, when finance was always able to outwit manufacturing. There is a connivance whereby the City of London has grown more powerful. It has done so not only in its own right, but because it has destroyed manufacturing. Any manufacturer in this country will be incandescent at their inability to derive flows of capital. The capital gets sucked up into housing, high finance and bank-rolling around the world at the expense of our manufacturing industry.

If we are serious about restoring that industry-and we have an opportunity to do so given the relative depreciation of the pound-we can only succeed if we go back to owning those assets nationally and deriving the ability to manufacture in our own right in this country. That would begin to raise the role of manufacturing in terms of its GDP percentage, and that should be one of our targets. I am not a great target setter-Governments tend to set all manner of targets and then cannot reach them-but we should aim to double the amount of manufacturing over the lifetime of the next two Parliaments. That is not much to ask, given that that is where we were in 1997. We probably will not get back in the next two decades what we lost in the last decade, and I realise how hard it will be, but that is what we have to do.

The anti-industrial culture that has been rife in this country for the last 100 years or more has to be taken on. I never worry when the City of London has its wings clipped or when high finance is curtailed and controlled, because it is at the root of the failings of the British political system. All that has happened is that the City of London has exported its power to the EU, which has been a willing co-conspirator in that regard, and British manufacturing has declined ever more quickly. We must face up to that problem, because otherwise we will rue the day that we failed to deal with it.

As always on these occasions, there seem to be more sceptical voices on the Labour Benches than voices in favour of the EU. That is because those of us who care passionately about Europe are still fighting our corner. We may not be in the majority at the moment, but stranger things have happened and parties have changed their mind.

I sounded an optimistic note in my speech. Does my hon. Friend agree that if the Government were to change their position to our position, the great majority of Labour Members would switch sides without turning a hair?

I could not be so cynical. Points of view change as parties change, and I just hope that the argument will be had, as all too often it is shut down. The issue that will bring this to a head will be the argument about public expenditure cuts. Those of us who feel strongly that making such cuts is entirely the wrong way to go about restoring the British economy to strength will argue the case that it is our obsession with Europe, and ideas such as Maastricht and the setting of targets for borrowing requirements, that are handcuffing our future. That is what will lead the Labour party to rethink its approach to Europe. It will be impossible to stand on a platform that argues for drastic cuts in public spending. The only way to square the circle is to consider other ways to save money, and we could start by saving money on our contribution to the EU, as that is unnecessary, undesirable and counter-productive. We will have to rethink our position, and that will provide opportunities for other nations in Europe to rethink their position. I will predict the future: my party will take a new position for those reasons, to which I say, "Jolly good, bring it on." Sadly, it may be after the next general election, but some of us will still be here to argue the case for a new approach. It is about time.

I want to make a brief contribution.

I would like to draw the Minister's attention to my earlier questions, two of which he failed to answer, but to which I hope he will return in his winding-up speech. The first was about why the Government chose not to fulfil their manifesto promise to give the British people a referendum on the Lisbon treaty. They, along with the other major parties in the House, promised to do that. He failed to answer that with his unfortunate humorous remarks.

Furthermore, will the Minister answer my question about the Prime Minister trumpeting the fact that Baroness Ashton is a Briton and that her promotion to High Representative will give Britain a voice in the European Council and Commission? To be fair, the Minister has not done that. In fact, he and Jo Swinson accurately pointed out that Baroness Ashton will of course represent the Commission, not Britain. He was honest enough to say that, but the Prime Minister has not been putting it in quite the same way. It would be helpful if the Minister cast his opinion on that when he winds up.

My main point-I have a couple of subsidiary ones-draws attention to something that another Member has referred to already. The title of the debate is "European Affairs", but in such debates we tend to launch immediately into EU matters, forgetting that there are other countries in Europe. We also then become very introspective and focus only on our future in Europe.

Conservative Members are often criticised by Labour Members-this is one of their favourite lines-for being little Englanders or, as I heard earlier in this debate, for not liking Europe because it has foreigners in it. My problem is that Europe is not foreign enough! It constitutes a very small part of the world's population and will increasingly represent a smaller share of the world's economy. My problem is that, if we spend too much time focusing on our economic performance relative to other members of the EU, we will lose sight of the fact that we must compete, win business and capture markets in the rest of the rapidly growing world. If our businesses and future prosperity are to be assured, we need to keep an eye on the rest of the world and not obsess about our position in the EU. That is something the Government often forget to do.

I see now from looking at my notes that it was Ms Stuart who mentioned foreigners, while talking about my hon. Friend Mr. Evans. As I said, my argument is that Europe is not foreign enough.

One reason why we should consider our position from a global perspective is that our interests are not always aligned and we are often in competition with other parts of the EU. One need only look at our trade arrangements. If we look at the countries to which we export our goods, we see that our single largest trading partner is the United States of America. If we look through the trading figures of our largest European neighbours, we see that they trade with the United States to a much lesser degree and that much more of their trade is with other EU countries, so there is a significant difference there. Sometimes our interests are not aligned with our colleagues'.

Owing to our history and other relationships in the world, we have many other forums in which to argue our case-for example, the Commonwealth. The Heads of Government meeting took place recently, which the Government made much of and trumpeted. That is rare for them because they often pretend that the Commonwealth does not exist. However, that is one forum in which our place in the world can be argued. Given the size of the Commonwealth, the number of people it contains and its possible significance in dealing with climate change-it contains India-it might be a more significant place than the EU in which to argue some of these matters, and it is certainly as important as the EU.

When thinking about our interests and place in the world, we must not focus only on the EU; we must take a wider, more global view. The trends over the next few years are very interesting. The European Commission's research department has prepared an interesting document called "The World in 2025: Rising Asia and Socio-ecological Transition"-not a terribly catchy title, I admit. However, some of its statistics are very interesting:

"In 2025, the population of the European Union will only account for 6.5 % of the world population."

The population will be much older than that elsewhere, as well.

The document also says:

"In 2025 world production will almost have doubled (in relation to 2005). The USA-EU-Japan triad will no longer dominate the world", although it points out that the United States will preserve its economic leadership. One or two colleagues referred to a united states of Europe and those who are trying to create a federal state, with a President of the European Council, a Foreign Minister and other pretensions to being a single country. However, if they are trying to model that on the United States of America, the bit they are missing is the United States' economic dynamism and fast economic growth. Even in 2025, the United States will still be the largest economy in the world and still have a high per capita income. That part of the United States' record is the one we want to emulate, rather than trying to turn the countries in the European Union into a united states of Europe.

The Commission's report makes it clear that

"The centre of gravity of world production will move towards Asia. The group made up of China-India-Korea will weigh as much as the European Union."

As I have said, we have relations with our Commonwealth partners, and particularly close relations with India. We should be ensuring that British firms and businesses are in there winning orders from Indian consumers and businesses, to ensure that we get our fair share. As the report says, India may be

"the sixth economic power of the world" by 2025, ahead of Italy and only a little behind France. We need to ensure that we get our fair share of that business, but I am concerned that we will miss out.

In my earlier remarks I touched on the settlement of the top jobs at the European summit the other week. I have already mentioned what the European High Representative is going to get paid, but the President of the European Council will earn £320,000, making him the highest paid leader, if that is the word-he is slightly more of a chairman than a chief. He will earn more than any leader of a western country, with a huge staff and a significant number of press officers to get the message out there, and will have a £5 million reserve fund to dip into as his job develops.

Interestingly, Kelvin Hopkins suggested that it was welcome that Mr. Van Rompuy had been elected as the President of the European Council because he will just be taking instructions from everybody else. However, that is not what French President Nicholas Sarkozy said. He said he had known Mr. Van Rompuy for many years, adding:

"talk to those who know him well...and you'll see. I'm going to tell you something: I think he's one of the strongest personalities around the Council table."

That is quite worrying when we think, to take just one example, about what the hon. Gentleman said about Mr. Van Rompuy's views about Turkey. As one or two others have said, we are strongly in favour, as are the Government, rightly, of Turkish accession to the European Union, both from a strategic and military perspective-Turkey is a strong and close NATO ally-and, as the Minister correctly said, from the point of view of energy security.

On my hon. Friend's point about how much Commissioners and those in the new positions earn, does he agree that, as one of the largest net contributors to the European Union, we should be directly involved, rather than allowing such obscene salary levels to be set? Does he also agree that it would have a positive effect on all the costs of those bureaucracies if they had the same transparency that we have here in the United Kingdom, and which I welcome? If we knew exactly how their expenses were spent, that would have a positive effect on grinding them down.

My hon. Friend makes a good point. If the British people knew more about how the European Commission works and how much some of those people get paid, and about the extent of their unaccountability, that could only be healthy. The more information that gets published, the better, so some kind of freedom of information process for the Commission would be welcome.

Another aspect I wish to raise is the European Commission's involvement in policy making in our country. There are many areas in which it has a formal decision-making process. One issue that recently came to light, and which I am not very happy about, is that the European Commission has started giving opinions on, and interfering in debates in this House about, the passage of legislation, when frankly it ought to mind its own business. On 20 November, the Commission issued a press release referring to the reasoned opinion it had sent to the United Kingdom for, in its opinion,

"incorrectly implementing EU rules prohibiting discrimination".

The press release said:

"We call on the UK Government to make the necessary changes to its anti-discrimination legislation as soon as possible so as to fully comply with the EU rules", despite the fact that that was just an opinion, not a ruling of the European Court of Justice. It continued:

"In this context, we welcome the proposed Equality Bill and hope that it will come into force quickly."

Frankly, Mr. Deputy Speaker, I do not think it appropriate for the European Commission to pick out particular pieces of legislation before this House, which are subject to our parliamentary scrutiny, to express any opinions on them or to interfere in the democratic process. That is quite inappropriate.

The lack of transparency concerning relations with the EU was also picked up on. In the debate on the Equality Bill, the Solicitor-General told Parliament that the Bill would not change the law relating to the exemption for religious organisations in respect of particular types of job. That is very interesting, because we have now obtained a reasoned opinion from the European Commission, which was not originally made available by the Government Equalities Office to organisations that requested it on the ground that it was confidential. Paragraph 19 of reasoned opinion No. 226 states:

"The UK Government has informed the Commission that the new Equality Bill currently under discussion before the UK Parliament will amend this aspect of the law and bring UK law into line with the Directive."

It seems clear to me from the European Commission's interpretation that the Government are indeed changing the law in this respect-I shall not go into it in great detail because we did that when we debated the Equality Bill-but that is not what British Ministers are telling hon. Members. It worries me that Ministers are providing answers to the House that are not compatible with what they are telling the European Commission. I have written to the Solicitor-General, who, having had that incompatibility drawn to her attention, will I hope either correct the record in the House or make sure that a letter quickly wings its way to the European Commission to put it straight. We cannot have the European Commission being misled about the British Government's views, or this House being given information that is not strictly accurate.

My next point is about exportable benefits. The Minister for Europe will know that certain benefits are payable to citizens who move and live elsewhere in the EU or in the European economic area. He will also know that in December 2007, the European Court of Justice ruled that for the purposes of European Law, three benefits-the care component of the disability living allowance, attendance allowance and carer's allowance-were incorrectly classified as special non-contributory benefits. The judgment said that they were exportable in certain circumstances within the European economic area and Switzerland.

That may sound an awfully long time ago-nearly two years-but unfortunately it took the Government until 24 February this year to notify Parliament that they had finally considered the full terms of the judgment and were going to put it into effect. I mention that because according to the last count, there are some 1,000 British citizens living in other EEA states and Switzerland who, because they are claiming attendance allowance or disability living allowance, are by definition either elderly, disabled or both, yet they are still waiting to receive the money to which they are entitled.

The Government have dragged their feet on this issue for a considerable time. Given that many of these people are elderly, by the time the Government get round to meeting their legal obligations, some of them may well have died and missed out on what is theirs by right. Many of them have paid tax in this country for many years and are entitled to these benefits. It would be helpful if the Minister told us how far advanced the Government are in paying out to those 1,000 or so outstanding cases, and whether they are going to fulfil their obligations under European treaties more swiftly.

Let me finally reiterate an important point. I always get worried in European debates-I sat through all the debates on the Lisbon treaty-because of how introspective we sometimes become, focusing on the European Union to the exclusion of the rest of the world. I believe passionately that Britain's history is global. We have 5 million British citizens living and working in countries around the world. We probably have more of a global economic interest than any other country. We need an outward-looking, engaged foreign policy involving a range of forums. We must not make the mistake of focusing solely on the European Union.

I believe we have learnt the lesson that, if we are fortunate enough to become the Government, we can play our part in the European Union; but we should not do so to the exclusion of our proper role in all the other forums in the world, such as the Commonwealth and the United Nations Security Council, where we have a permanent seat. That is a lesson the Government would do well to learn.

It is a great pleasure to follow my hon. Friend Mr. Harper, who yet again has shown himself to be a serious politician who introduces to debates subjects that have not been raised earlier.

We have been lucky enough to have on our Front Benches today some of the most important politicians in this Parliament: the rising stars of this Parliament. We have, of course, the dynamic duo on the Conservative Front Bench, and on the Labour Front Bench we have the Minister for Europe, who, I understand, now likes to be called Cardinal Richelieu. If I am one of the three musketeers, he is the evil one. On the Liberal Democrat Front Bench we have Jo Swinson. I do not think that she will have a chance to speak today, but I am sure that she would always defend to the hilt whatever Liberal Democrat policy on Europe happened to be on that particular day.

Let me now make a serious point, as one who is pro-European but anti-EU. We have spoken today of the number of service personnel in Afghanistan. I have a personal interest in that. It seems wrong that some of our European partners are not committed enough to the war in Afghanistan-although others are committing their troops alongside ours and those of the Americans, and they are suffering frightful casualties. It is, I believe, also the Government's position that some of our colleagues in the European Union are not doing enough. I do not know how the Government will deal with the problem. I know that they are at the heart of Europe, and I know that they have a great deal of power in Europe, but they do not seem to be entirely successful in that particular regard.

Let me return to the stars on the Front Benches. There is a clear divide between them. On the Government Front Bench sits someone who really believes in the European Union, and really believes in a federal state. No-I should say "one state", a European state. I apologise for calling it a federal state. What the Minister believes in is one state called Europe. On our side is someone else who believes equally strongly in a Europe of nation states-someone who opposes the Lisbon treaty, and who actually speaks for the British people. That leads me rather nicely to my right hon. Friend the Leader of the Opposition, who has been consistent on Europe and has spoken for the British people. [Laughter.] Labour Members laugh because they do not understand what consistency means.

Let us go back a little in history. Why not? No one is listening today. There is no one up in the Galleries, and even the Whip has put down his pen. We can be honest, and the Government can be honest, about the situation. The only reason why they were elected at the 2005 general election is that they did two clever things. Their spin department-their polls-told them that the people wanted a say on Europe. The other thing that their polls told them was that people were scared stiff of Gordon Brown. So what we got was a promise that Tony Blair would serve a full term. Labour went back on that-there was no consistency there-and of course, when it came to the promise of a referendum on a European constitution, they went back on that as well. That is why they are in so much trouble. This is not about the actual issue; it is about lack of faith-about their lack of consistency. We just cannot believe them any longer.

By way of contrast, let us turn to the new leader of the Conservative party. When I was considering who to vote for in the leadership election, I asked one of the candidates, who is now the leader of the party, "Are we going to pull out of the European People's party, as we can't have Conservatives sitting in the