My Lords, I beg leave to ask the Question standing in my name on the Order Paper, having declared my interest on 3 July.

The Question was as follows:

To ask Her Majesty's Government whether, notwithstanding their assurances given on 25 June and 3 July, they will reassess the possibility that the omission from the protocol agreed at the June European Council of the reference in the Treaty of Rome to free and undistorted competition may be interpreted by the European Court of Justice as a change of policy.

My Lords, there is no need to reassess the situation. It is clear that the words used in the proposed protocol are substantially the same as the words used in the existing EC treaty. Moreover, the protocol is legally binding. Therefore, there has been no change of policy.

My Lords, I thank the noble Baroness for her reply. Was not the object of the omission of words which safeguarded the undistorted and free competition established by Article 85 to change EU competition law, as reported in Le Monde of 25 June, and enable Protocol 6 to foreclose on that fundamental principle to become but a matter for consideration, bereft of any legal efficacy, subservient to a series of obligations under Articles 1 to 3, which are wholly extraneous to competition law?

My Lords, it is difficult for me to put before your Lordships' House what the French president had in mind when making his proposals. There could have been a number of reasons—political, economic and other. The noble Lord’s underlying question is whether we are certain and secure in our understanding of undistorted competition. We agree with the Commission’s lawyers that, as a result not only of the protocol but of other articles in the proposed reform treaty, that remains the case.

My Lords, will my noble friend confirm that the competition rules of the European Union are not changed in any respect by the treaty that is under consideration? Will she go further into describing the circumstances in which President Sarkozy, doubtless to impress domestic opinion, put forward certain unacceptable ideas about changing competition references, and nobody else among all the leaders of government in the whole of the European Union supported him?

My Lords, my noble friend is absolutely right and is able to interpret perhaps more fully than me what was in the mind of President Sarkozy.

My Lords, will the Minister confirm that a majority of the 27 member states is in favour of a sharp competition regime—it is the French, the Germans, the Italians and sometimes the Spanish who hold out against it—and that the United Kingdom needs an active policy that promotes competition and builds alliances with other governments rather than the more passive policy that we have seen adopted by our Government on a large number of European matters in recent years?

My Lords, I agree with the noble Lord. The European Commissioner for Competition, Neelie Kroes, whom I had the privilege of meeting on a number of occasions in my previous role, was interested in the ways in which the UK was promoting competition. The noble Lord might like to talk to his colleagues about the Legal Services Bill. Neelie Kroes shares the Government’s wish to open up legal services to greater and appropriate competition; the Liberal Democrats do not.

My Lords, we are all extremely pleased that the Leader of the House has taken on the difficult, complex and important European Union brief. We look forward to her views on many other aspects of it in due course. However, I wonder whether she is completely right in this case. Have not the objectives of the European Union been changed by the proposal of Mr Sarkozy to remove from the protocol the reference to free and undistorted competition? We all know that the treaty is, according to the House of Commons committee, substantially the equivalent of the previous constitutional treaty, but it has in this case been made worse. Surely the judges of the European Court of Justice are guided by the objectives of the Union—they keep referring to them. When they find that the objectives have changed, how does she know that they will not change their judgments? She does not know.

My Lords, I am grateful to the noble Lord for his welcome. I am not taking on the entire European Union brief; I am keeping my hand in, partly because I shall be taking through the House the European Union legislation later in the year. Therefore, as Leader, I am answering Questions that may in some way be connected with that. My experience of working with the European Court of Justice and the European Union—the noble Lord will know that I served on the Justice and Home Affairs Committee for three years on behalf of the Government—is that there are many ways in which one is able substantially to protect important aspects of European Union law or the wishes of member states. Protocols are legally binding; I can find no precedent for the European Court of Justice saying that the protocol has less effect in a particular context than within the original articles. There may be a case in the future where the European Court looks at that matter, but we have no legal advice to suggest the opposite. The Commission’s lawyers, too, have no difficulty with this position.

My Lords, does not the noble Baroness agree that this whole matter shows how important strong institutions of the European Union are and that, in fact, the competition policy depends crucially on the attitude of the Commission? Therefore, the Commission stating that its powers have in no way been weakened is absolutely critical. Would she also be so good as to put in the Library of the House the study by the Dutch council of state that came to an exactly opposite conclusion to the scrutiny committee of another place—the Dutch council of state being a non-political body?

My Lords, the Dutch council of state has on many occasions been an important body in determining policy that comes forward from the Netherlands—but it is also, as the noble Lord said, an independent body. I agree that the Commission lawyers would look extremely carefully at the implications and impact of what was being proposed as they above any others would be mindful of the potential within the European Court of Justice and they are very clear that the protocol is legally binding.

My Lords, I am sure that my noble friend would be the first to accept that the Government have in mind the great difficulty of ever predicting any opinion that the European Court of Justice will hold. In that light, what is the Government’s confidence in predictions in this matter, given the arguments advanced in the European Court of Justice on the Viking case and other cases about to be decided by it, and confirmed by the Advocate General in that and another case, that the likely result will be that freedom of competition and so on will have to be balanced against a right to strike, used proportionately—whatever that means—at European level? That seems the view of most commentators who are expert in this field of what the court is likely to give as its reasons in the next month or so.

My Lords, it is very difficult to speculate on what the Court will or will not do in the next few weeks. Again, my experience of the European Court of Justice is that speculation does not necessarily lead to the final determining decision. As my noble friend said, we shall have to look at what transpires in that individual case.

As for the right to strike, noble Lords will know that in the protocol established around the Charter of Fundamental Rights those issues have been dealt with by the UK Government within the red lines.