European Communities (Amendment) Bill.

HL Deb 30 June 1993 vol 547 cc872-920

House again in Committee.

Lord Holme of Cheltenham moved Amendment No. 421: After Clause 6, insert the following new clause: Provisions for uniform electoral procedure (". Before 31st December 1993, Her Majesty's Government shall lay before each House of Parliament a Command Paper setting out how they intend to adopt provisions laid down by the Council in accordance with Article 138(3) of the Treaty on European Union.").

The noble Lord said: It will not have escaped the attention of the Committee that we on these Benches take every possible opportunity to urge the case for reform of the electoral system both to achieve more representative outcomes and to give voters more choice and involvement in elections. It seems particularly important in the case of the European Parliament that there should be a fair and representative electoral system. I say that for three reasons.

First, Article 138 of the Treaty of Rome calls for a uniform electoral procedure in all member states. In March of this year, as the Government will know, the European Court of Justice ruled that the treaty should be upheld in this matter by the Council. The Council now has in front of it a proposal from the European Parliament for a common system based on proportional representation. The proposal originates in a committee chaired by Mr. De Gucht. The last time that I had the privilege of discussing the matter in this Chamber with the noble Earl, Lord Ferrers, he was pleased to describe Mr. De Gucht, I think pejoratively, as a Belgian socialist. I was not quite sure which of those two terms was the greater term of abuse. But he then redeemed what might appear to have been a slightly chauvinistic approach from a Government that wishes to be at the heart of Europe by pronouncing his name rightly. I shall not seek to emulate him; I shall stick with the rugged Anglicised pronunciation.

In producing the proposals, Mr. De Gucht said: I have made it as difficult as possible for Britain to say no Despite his hopes, I dare say that the Government will find ways of saying no.

The second reason that we need to reform the system by which we vote in Britain for the European Parliament is that without proportional representation the overall balance of the European Parliament could be seriously disturbed by the British election results. The Committee will be aware that of the Members of the European Parliament, in the Socialist group roughly one-quarter come from the United Kingdom; in the People's Group (the Conservative group) roughly one-fifth come from the United Kingdom. I can quite see that for those who do not like the European Parliament and believe that it should be kept as weak as possible, that is a very good reason for resisting reform. I understand that. But for those who believe that a strong and credible European Parliament is part of the solution to the so-called democratic deficit, such deformation of the will of the people of Europe by one country must be a matter of considerable concern.

There is a third and final reason for having proportional representation for European elections. It is incumbent on those who want proportional representation to acknowledge the fears of those—it may include the Government—who see PR for Europe as the thin end of the wedge. They feel that if there is reform of European elections, it would lead, as night follows day, to a demand for reform of parliamentary elections. On these Benches, we would certainly say so. But it would be right to accept that European elections are in kind completely different from Westminster elections. They do not produce a government or purport to do so. There is no coalescence of parties to form a government in Europe. The argument of the thin end of the wedge is particularly difficult to sustain when one considers that for 15 years in Northern Ireland there has been a system of proportional representation for certain elections.

So the case for reforming British elections to the European Parliament to conform with the uniform electoral procedure seems to be a strong one. I note that Amendment No. 422 in the name of the noble Lord, Lord Swinfen, which has also been grouped with this amendment for debating purposes, calls for a report on progress towards a uniform electoral procedure but expressly excludes the question of proportional representation.

Perhaps I may anticipate the arguments that the noble Lord intends to use. He will forgive me if I have got them wrong. It is difficult to know what "a uniform electoral procedure" is capable of meaning unless it has to do with the electoral system. Simply to say that it means that all adults shall vote or all adults shall vote by secret ballot is almost tautologous in terms of democratic elections. It does not advance the argument any further.

For those three reasons I believe that the case for reform of the British electoral European system is almost irrefutable. That is probably why on several occasions—to be more accurate, on more than one occasion—this Chamber has supported proportional representation for the European Parliament. Turning to the Labour Benches, that is also probably why the Plant Commission, which was set up by the Labour Party, has recommended proportional representation for the European elections. The noble Lord, Lord Plant, the eponymous chairman of that commission, asked me to say that he had hoped to be here and in his capacity as chairman of that group he would have wanted to support the amendment that we put forward tonight.

The amendment does not call for proportional representation for European elections. It is much more modest and appropriate to the Bill. It does not itself propose electoral reform. It simply asks the Government for a report by the end of this year on how they intend to move ahead to a uniform procedure, which they signed up to in the Treaty of Rome. Several amendments this afternoon have called for reports from the Government to Parliament. That seems right. I argue that this is an area of such central importance that a report from the Government seems more than appropriate. I very much hope that in responding, the Government will feel able to accede to this modest proposal. I hope so all the more as I see the noble Baroness, Lady Chalker, on the Government Benches and know of her long-term and constructive interest in these matters.

If the Government were wise they would greatly widen the basis of their support for the Bill. To some extent they have depended on the support from these Benches in this Chamber. They would widen support in Parliament and the country if they showed themselves generously open to the concerns of a substantial body of their fellow citizens which goes far beyond the ranks of the Liberal Democrats.

This evening in another place the European Parliamentary Elections Bill is being debated. The Government must find a way to have elected six extra Members of the European Parliament. Shortly this Chamber will be considering that Bill. It is right at this stage to say that I do not propose to press the amendment to a Division. However. I hope that in responding to it the Government will try to take the sense that if they are to introduce new Members to the European Parliament and look for wider support in Britain for their adhesion to the Maastricht Treaty, they should accept the sense of this amendment. I beg to move.

Lord Swinfen

As the noble Lord, Lord Holme of Cheltenham. said, the amendment in my name and Amendment No. 423 are grouped with his amendment and I shall speak to the one in my name and that of my noble friend Lord Beloff.

As the noble Lord said also, the amendment goes rather wider than his amendment in a way that should commend itself to my noble friend and to the Government. It would preclude the use of proportional representation in elections to the European Parliament. As the Committee will know, the Government have set their heart, mind and shoulder against such an electoral system and should therefore have no objection to Amendment No. 422.

There are some countries, such as Italy, that use some form of proportional representation. But we should look at the speed at which Italy—which has had a terrific number of governments over the past few years—is trying to ditch that system and change to our own much more satisfactory system of first-past-the-post.

Lord Holme of Cheltenham

I am grateful to the noble Lord for giving way. He is right to describe a variety of electoral systems. However, will he accept that for European Parliament elections all our fellow Members use the system of proportional representation?

Lord Tordoff

Before the noble Lord responds to that. he should understand also that the Italians have not gone for a total first-past-the-post system. They have gone for something much closer to the German system of additional Member seats.

Lord Swinfen

That may be. It was my understanding that the Italians had gone for a first-past-the-post system but I shall look further into the matter.

Baroness Seear

There is no need to look further into the matter. We are telling you; you are wrong!

Lord Swinfen

I can be wrong on occasions.

Lord Mackay of Ardbrecknish

Perhaps I can be of help to my noble friend. The Italians have abandoned the system of proportional representation which served them so badly. But is he aware that what they will go to, if it can be agreed, is a system where most of the Parliament will be elected by the system of first-past-the-post? There will be additional Member seats, as in the German system, but the basis of the system is first-past-the-post. He is correct that they have abandoned the usual variety of proportional representation.

Lord Tordoff

With respect to the noble Lord, once one gets into an additional Member system, one is getting into a proportional representation system. The whole purpose of the additional Members is to have a proportion in the Parliament according to the voting. The fact is that the Italians have not changed their system in relation to elections to the European Parliament. That is what we are talking about tonight.

Earl Ferrers

As we all seem to be chipping in during my noble friend's speech, perhaps I may also. It may be more suitable to allow my noble friend to continue; otherwise, we shall be not only out of order, but also out of cog with our thoughts.

Lord Swinfen

I thank my noble friend for that interruption. However, I have no objection to other noble Lords from around the Chamber trying to put their point of view. There have been arguments throughout the whole of the Committee stage of the Bill as to whether or not Members should be allowed to put their points of view. I am delighted that that is the case.

My view is that proportional representation in many countries leaves long periods of uncertainty after an election while negotiations between parties take place in order to produce a coalition government which, if the parties disagree, does not always last very long. The system has also given the opportunity to small extremist parties to wield undue influence, an example of which is the party in France led by M. Le Pen. The ultimate example of that was the seizure by the Nazi Party in pre-war Germany which brought Hitler to power with only 32 per cent. of the vote.

In many forms of proportional representation the vote is merely for the party and not for an individual. One of the great strengths of our present system is that the elected Member of Parliament, whether of our own national Parliament or indeed the European Parliament, is answerable to his constituents. If they do not approve of the way in which he acts, they will ensure that they get rid of him at the next election, which is not always possible with some forms or proportional representation.

8.15 p.m.

Baroness Elles

I support the amendment of my noble friend Lord Swinfen. I should imagine that he will not have any problem in asking the Governrnent to resist any change in the electoral law of the United Kingdom to any system of proportional representation. Therefore it should not be an argument that takes too long in your Lordships' Chamber.

Perhaps I may say a few words, having been a Member of the European Parliament for 10 years—I was an elected Member from Thames Valley—about my experience with my other colleagues in the European Parliament. I represented nearly 500,000 electors who knew me, I am happy to say, considering the post I used to receive every weekend from my constituents and the number of times I was invited to speak to them.

On asking my colleagues in the European Parliament how often they visited their constituents, one charming Frenchman said to me. "If I get three times a year a letter in Le Monde, I am satisfied". That was the only link he had with the people of France. In fact, if one spoke to ordinary Members of Parliament they were extremely jealous of our system; they' recognised that we had responsibilities to our electorate; we knew what was going on on the ground and they did not. They had no connection.

Another point that I should like to make is that in the first Parliament I was in, from 1979 to 1984, by the time we reached 1984 there were well over 70 Members who had failed to be elected in 1979. It is an abuse of the democratic system. They were on lists and as soon as somebody either died, was promoted, made President of the European Commission or a Member of their own nation's government, the person lower down on the list was put in their place. Therefore those people had failed to be elected during the European parliamentary elections.

I consider that to be a gross abuse of the system. There were at least 70 people in 1984 who held such a position. I have not checked how many there are today. I know personally that three were not elected in 1989 and are now there enjoying the privileges of being a Member of the European Parliament. I am happy to say that that cannot occur under our system and I hope that we shall never opt for a proportional system.

Lord Holme of Cheltenham

Before the noble Baroness sits down, it is worth saying that if she represented 2 million people I am sure that they would remember her and her name would be familiar to them. However, in one regard the noble Baroness inadvertently misled the House.

It is the European Parliament that is recommending that the British adopt a proportional representation system. Therefore the distaste that she describes on the part of her fellow Members of the European Parliament of different countries for their own systems and their hankering after the British system, does not seem to have come to effect in practice.

Baroness Elles

Perhaps I may be allowed to reply to that comment. Of course, Mr. De Gucht does not answer for all the Members of the European Parliament. I am happy to say that people are gradually beginning to change because they are beginning to understand, as in Italy, the folly of having proportional representation.

Lord Tordoff

Whether or not all Members of the European Parliament agree with Mr. De Gucht has been shown by the vote in the European Parliament, which supported the De Gucht proposals. Those have now gone forward as the proposals from the European Parliament. Therefore the European Parliament made it clear that a uniform system as a minimum should be a proportional system.

It is not a question of Mr. De Gucht's personal preference. The noble Earl, Lord Ferrers, referred to Mr. De Gucht as being not only a Liberal, but a Belgian, in terms that suggest it is something particularly nasty. The fact is that that is the wish of the European Parliament, and for good reason. The balance in the European Parliament has been totally distorted by the unfortunate electoral system that we use in this country.

Lord Beloff

We have now been discussing for almost six days a very important measure which involves, in my view, the incorporation of the United Kingdom into a European superstate. But even those who deny this interpretation assert its importance. From the Benches opposite me we have had almost no contribution of substance. Their Benches have largely been empty. And yet this evening, all of a sudden—

Lord Tordoff

Will the noble Lord give way?

Lord Beloff

No, I shall not give way. There are things on which one gives way and things on which one does not give way.

Lord Tordoff

I wish to—

Noble Lords

Order, order!

Lord Beloff

But this evening the Pavlovian instinct works. Mention proportional representation and a Liberal will emerge from behind every bush. Yet, if they are so interested in the European Parliament as to be worried about the electoral system, why did they not take the opportunity to examine the very real problems of the European Parliament—to which the noble Lord, Lord Holme, referred in passing with regard to the need immediately to have six extra members to balance those from the former East Germany—because it is clear that in its present form the parliament will not survive enlargement?

If there were proportional numbers of members from the countries which it is proposed to admit they would not be able to go on using the Council of Europe building in Strasbourg. They would need Wembley Stadium or its equivalent. It is a body which already finds it difficult to do serious work—for instance, on financial control—and when enlarged would find it impossible to do any work. Therefore, one would think that it is much more important to concentrate on how that parliament is to operate in the new circumstances, if we are to have the new circumstances, than to go on peddling the old nostrums which almost every country in Europe is beginning to despair of. Italy is only one example.

It is perfectly clear that what people want, as the noble Baroness, Lady Elles, said, is some relation—personal or active—with their representative. What we have in the European Parliament is a democratic deficit because it cannot be considered a serious parliament alongside the parliaments of our several countries. That would have been a worthy subject, once the Liberal Democrats turned up. I am sorry that they have not made use of the opportunity.

Lord Tordoff

Perhaps I may respond to what has been said from the Benches opposite. In the first place I thought that it was customary in your Lordships' House that if someone rose he was given leave to intervene. But apparently the noble Lord, Lord Beloff, has a different set of standards. I wish to make two points to him. First, these Benches have not been empty. They have been attended throughout the whole of these long hours of Committee stage. There have been on average five or six people on these Benches at all times. There have been moments when the number has been down to two or three but we have been well attended. We have not spoken because, frankly, we made our Second Reading speeches at Second Reading and not at the Committee stage.

Lord Stoddart of Swindon

I wish to oppose Amendment No. 421, which was moved by the noble Lord, Lord Holme, and support Amendment No. 422, which was moved by the noble Lord, Lord Swinfen. I say straight away that it would have been better if the European Parliament had still been composed of delegates from national parliaments. That would have ensured the national control of the European Parliament and indeed I believe that there would have been better control of the legislation coming from the Commission.

As it is, the European Parliament is a totally irresponsible body, no matter how it is elected. Indeed, I believe, as the noble Lord, Lord Swinfen, pointed out, that there are grave dangers in electing that parliament by proportional representation. We must not believe that because certain people say that proportional representation is more democratic than first-past-the-post that is necessarily so. We can show in many instances that PR is very much less de:mocratic. Indeed, there are dangers in the system, particularly the election with only 5 per cent. of the votes of some very peculiar people and parties to a particular organisation. That may be democratic or not, but there are dangers about PR. There may be benefits—I do not see them. I believe that, in this country anyway, first-past-the-post has served us very well over a long period of time. It may not have served the Liberal Party, although it seemed very satisfied with the system when it was able to form governments, and did nothing to change it.

There is another reason why I am concerned about this amendment and why I support the noble Lord, Lord Swinfen. A document was given to me tonight which is apparent)/ put out by the European People's Party, which is the Conservative Party in Europe. I have read through it very quickly and some of the things said there worry me very much and make me an even more fervent opponent of PR. Paragraph 201 of the document states: The European Union alone can secure Europe's future". It goes on to say: The EPP"— the European People's Party— calls for the gradual but resolute transformation of the European Community into a genuine political union on a federal model". It continues: A federal Europe is now more than ever a necessary and realistic political objective". The final quotation I shall make is this: It is the European Parliament, elected by universal suffrage, which primarily ensures that Europe is built on a basis of democratic legitimacy. It must therefore have the final say on constitutional and legislative matters". I have read that for the benefit of the Committee and in particular for the benefit of Members of the Committee opposite. They may not have seen this document. It is a very serious document because the Conservative Party is part of the European People's Party.

Lord Tebbit

I am grateful to the noble Lord. He says that it worries him. Will he give a moment's consideration to how much it worries me? I have read the wretched thing. But I beg of the noble Lord to be absolutely factually correct because he has no need to overstate the case for it to be devastating. My friends who are Conservative Members of the European Parliament are not members of the EPP. They are affiliates of it. But: I am unable to get replies from them or from the chairman of the EPP when I ask whether they are committed to that document, which is the manifesto of the party to which they are affiliated. I do not know.

Lord Stoddart of Swindon

That was a very helpful intervention from the noble Lord, Lord Tebbit, and of course he knows far more about the matter than I do. But the fact of the matter is that here we have an organisation which wants to displace national parliaments as the engine for legislation and all kinds of other things. It would be quite wrong under all these circumstances to support the amendment tabled by the Liberal Democrats although it would be very worthwhile for the Committee to take a vote on Amendment No. 422 because we would all then be able to use a cross or our mouths—I do not know where our hearts are.

8.30 p.m.

Lord Hylton

I do not disagree with the noble Lord, Lord Beloff, when he suggests that the European Parliament should not necessarily be enlarged pari passu with the number of members of the total community. Nevertheless, this short debate has shown very clearly that the very idea of proportionality is like a red rag to a bull with some of the larger political parties in this country. That does not put me off from supporting Amendment No. 421 moved by the noble Lord, Lord Holme of Cheltenham. I hope that: the Government will not approach this particular amendment with a totally closed mind.

Lord Plant of Highfield

I wish to add a sympathetic word to the amendment moved by the noble Lord, Lord Holme of Cheltenham. I am sorry that I was not in the Chamber at the beginning of the debate on the amendment. In fact, I have been discussing the issue of proportional representation with quite a large number of Conservative supporters at the Centre for Policy Studies until a few minutes ago.

It seems to me that there is a good case for accepting the principle of proportional representation for the European Parliament. I wish to rest the case on three general points. Irrespective of what one's view might be about proportional representation for other political bodies, there are three reasons why one might think that the European Parliament is a special case. To some extent representation should depend on function. The function of the European Parliament is rather different from that of the House of Commons.

First, the executive is not drawn from the European Parliament and that worries the defenders of the first-past-the-post system who wish to preserve that procedure in the House of Commons as the source of the Executive's authority. That is not so in the case of the European Parliament. Secondly, the size of the constituencies in the European Parliament undermines the case for standard first-past-the-post types of constituency representation. The relationship between an MEP and his or her constituency cannot be the same as that of a Member of the House of Commons and the constituency.

Baroness Elles

I am grateful to the noble Lord for giving way. Does he accept that the United States Congress is also in an unfortunate position in that a Congressman represents more than half-a-million constituents?

Lord Plant of Highfield

The argument is cumulative. There are three reasons and I have just given the second reason. I do not believe that any particular reason in itself is overwhelming, but the three taken together are important. I do not believe that any of the arguments are overwhelming. At the end of the day they are matters for political judgment. Those who argue in favour of first-past-the-post in the sense that it secures a close relationship between an elected Member and the individual constituent must be on weaker ground given the larger size of the European constituencies. Thirdly, the evidence that we had in the working party which I had the privilege of chairing for the Labour Party, was that the actual role of the constituency Member of the European Parliament is different from that of a Member of the House of Commons.

A Member of the House of Commons does a great deal of individual case work with individual constituents. The view we have, both from observers and from Members of the European Parliament, is that Members of the latter tend to relate far more to groups and institutions within constituencies and less so with individuals than is the case with Members of the House of Commons.

So for those three reasons, coupled with the general principle that representation might be thought to depend on function, there is a case for electing the European Parliament by a different method from that used in the House of Commons. That was the unanimous proposal made by the working party which I chaired and which was in fact endorsed by the Leader of the Labour Party. It is not yet, of course, party policy until after the party conference in October. Therefore, I am speaking about this matter from the Back Benches rather than as someone who has some responsibility for constitutional affairs on the Front Bench. There is a strong case based on the reasons that I have given.

Lord Hailsham of Saint Marylebone

Come along!

Earl Ferrers

My noble and learned friend Lord Hailsham says "come along". I was only waiting for some other noble Lord to speak because the last time I tried to "come along", I "came along" too quickly and nearly deprived the noble Lord, Lord Plant, of participating in the debate, which would have been a great pity.

Amendments Nos. 421, 422 and 423 are grouped together. The noble Lord, Lord Stoddart of Swindon, got so wound up with the thought of proportional representation being used in the European Parliament that he failed—possibly on purpose—to address his thoughts to Amendment No. 423. So I shall concentrate my thoughts on Amendments Nos. 421 and 422.

I do not blame the noble Lord, Lord Holme of Cheltenham, for moving the amendment because the Liberal Democrats, as we all know, are very keen on proportional representation and they never refuse or miss an opportunity to press their points home. The intervention of the noble Lord, Lord Plant, was quite interesting. He is in the difficult process of trying to turn his party round from the system of first-past-thepost to proportional representation, which is not an uncontroversial thing to do. We shall see what happens about that.

The amendment moved by the noble Lord, Lord Holme, seeks to find out how Her Majesty's Government intend to adopt the provisions for a uniform electoral procedure which is required by Article 138.3 of the Treaty of Rome. The Maastricht Treaty does very little to change the provisions of the Treaty of Rome on this matter. It is important to remember that the only change is that Article 138.3, as amended, will now stipulate that the Council must act unanimously if and when it adopts a uniform electoral procedure, but it can only do that after it has obtained the assent of the European Parliament to the Parliament's proposals and they have to be approved by an overall majority of the European Parliament.

It would make little sense for the Government to have to lay a Command Paper describing what the United Kingdom would do in circumstances which have not yet been discussed by the Council of Ministers—still less which have not been, as the amendment says, laid down by the Council". At present, we have received no indication as to when the subject of a uniform electoral procedure is going to be discussed by the Council. The European Parliament has agreed, with amendments, the proposal that was prepared by the Institutional Affairs Committee of which Mr. Karel De Gucht, a Belgian MEP, was the rapporteur. The noble Lord, Lord Holme of Cheltenham, chivvied me for saying that he was a Belgian MEP. He said that he thought that I was being pejorative. He is a Belgian MEP and neither the adjective nor the noun is supposed to be pejorative; it is merely a fact. He was the rapporteur.

At present we do not know whether or when the Council will discuss the proposals, or whether that will be done before 31st December 1993; the date which is specified in Amendments Nos. 421 and 422. I do not think that it would be sensible for Her Majesty's Government to publish a Command Paper before the matter had been fully discussed in the Council, when the proposals themselves may well be altered. We must look at this situation realistically. The fact is that the great diversity of national electoral systems which are used within the Community may well make it very difficult to reach a unanimous agreement of the Council on a uniform procedure.

I can assure my noble friends, Lord Swinfen and Lord Beloff, as regards Amendment No. 422, and my noble friend Lady Elles and the noble Lord, Lord Stoddart of Swindon, that the Government have no intention of changing from the simple majority system, which we use for electing representatives to the European Parliament from constituencies in Great Britain. When the Council examines the proposal from the European Parliament we shall, of course, consider it on its merits. I should make it clear—this is very important—that any agreement on a uniform electoral procedure can only be reached by unanimity in the Council.

Lord Holme of Cheltenham

As I had hoped, this has been an extremely lively debate. The Government will probably wan. to take note of the fact that all the speeches from noble Lords who spoke against the principle of proportional representation were from those opposed to the passage of this treaty—

Baroness Elles

I am sorry, no. Will the noble Lord kindly amend what he has just said?

Lord Holme of Cheltenham

I take the noble Baroness's point. What a terrible thing to have said. She is a notable exception to the fact that all the other speeches were from opponents of the Maastricht Treaty. I apologise to her.

Lord Stoddart of Swindon

I did not know that the noble Lord, Lord Hylton, had indicated that he was opposed to the passage of the treaty.

Lord Holme of Cheltenham

I am glad to say that the noble Lord, Lord Hylton, was speaking in favour of proportional representation. I do not know whether the noble Lord, Lord Stoddart, detected that. On the question of a democratic Europe, it would be prudent for the Government to recognise who their friends are.

I do not want to detain the Committee except in one respect: I must advise the noble Lord, Lord Beloff, that what he said about these Benches being deserted was unfair. My noble friend Lord Tordoff has already referred to this. Throughout the debate there have been between two and sometimes up to 12 Liberal Democrats on these Benches. I venture to suggest that in proportion to our membership of this House there has probably been a higher proportion of us sitting here through these debates than is true of the two major parties in this House, so I do not think we have anything to apologise for. The fact that we have not spoken quite as often as some other noble Lords may indicate that we should like to get the treaty through and to stop these Second Reading-type speeches being made for ever and ever. As I have said, I should like to withdraw the amendment although I am sure that we shall return to the subject many times—

Lord Bruce of Donington

Before the noble Lord sits down and since he is discussing proportional representation and the putting into operation of paragraph 3 of Article 138, would he care to take cognisance of the present position whereby the state of Luxembourg, with a population the size of Bristol, has six representatives, and to bear in mind that if that were followed through to the United Kingdom and the same proportionality were involved, the United Kingdom would be entitled to approximately 600 Members of the European Parliament? Would he like to comment on that?

Baroness Carnegy of Lour

Before the noble Lord, Lord Holme of Cheltenham, prepares to answer that, perhaps I may say that I know that the Liberal Democrats are extremely keen that everything should be proportional, but I do not think that he should assume that the number of speakers in favour of proportional representation out of the total number of noble Lords sitting in the Chamber represents the opinion of the Committee because there are a great many of us who are also keen to get the treaty through but who decided to sit quietly and listen.

Lord Holme of Cheltenham

I am sorry, but I am not sure that the noble Baroness and I are speaking about the same thing. Could she clarify the point that she has just made?

Baroness Carnegy of Lour

I am sorry if I was not clear. The noble Lord seemed to assume that because more speeches were made in favour of proportional representation than not—I am sorry, I mean the other way round—because more speeches were made against proportional representation than in favour of it (the noble Lord has confused me), that seemed to be associated with an antipathy towards the treaty. The noble Lord was making assumptions from that. But many of us who want to see the treaty through but who are not too keen on proportional representation were sitting quietly. I hope that he will agree that that was the case.

Lord Holme of Cheltenham

Yes, but the only point that I was making was that, on the whole, the Liberal Democrat Benches have not been as vociferous a:; normal simply because we hope to get the treaty through. I made no comment about the balance of speeches in the Committee save to identify those who have spoken against.

In conclusion, this is a subject to which I am sure the House will return on many future occasions, so I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

8.45 p.m.

Lord Swinfen moved Amendment No. 422: After Clause 6, insert the following new clause: Provision for European elections (" . Before 31st December 1993, Her Majesty's Government shall lay before each House of Parliament a Command Paper setting out arrangements for adopting provisions laid down by the Council in accordance with Article 138(3) of Title II, Article 21(3) of Title 111 and Article 108(3) of Title IV of the Treaty of European Union, but not including any provision for change in the electoral law of the United Kingdom to any system of proportional representation or otherwis,;.").

The noble Lord said: We have already discussed this amendment with Amendment No. 421. but it is such an important matter that I think that I should test the opinion of the Committee. I beg to move.

On Question, amendment negatived.

[Amendment No. 423 not moved.]

[Amendment No. 424 had been withdrawn from the Marshalled List.]

[Amendments Nos. 425 to 427 not moved.]

Clause 7 [Commencement (Protocol on Social Policy)]:

Lord Richard moved Amendment No. 428: Page 2, leave Out line 27 and insert ("calling for the adoption into United Kingdom law of the Agreement on Social Policy").

The noble Lord said: I should tell the Committee right at the outset that we now come to an amendment upon which, unless there is a clear change of heart expressed on the part of the Government, it will be my intention to test the view of the Committee.

Amendment No. 428 is a clear amendment which calls for the eventual adoption by this country of the Agreement on Social Policy contained in the Maastricht Treaty. Its acceptance would mean that Clause 7 would state that the Act shall come into force only when each House of Parliament has passed a resolution calling for the adoption of the Agreement on Social Policy. More nonsense has been talked about this part of the Maastricht Treaty than probably any other part of it. And as your Lordships who have sat through this debate and who have read the debates in another place will know, that is saying a very great deal.

The issue that the Committee has to face tonight is not only that of the opt-out and of the institutional gyrations which that has produced; the issue is really whether or not we should sign up to the social agreement. It raises the whole question of Community competence on social policy. Indeed, in many ways this goes to the heart of one of the issues that we have been considering during the past six weeks.

It is therefore right that we should look at the treaty and see whence comes this competence and whence come the present provisions of the treaty. We go back to the Treaty of Rome and back to the Single European Act. I am looking at Command Paper 455 which incorporates the Treaty of Rome and the Single European Act—at Title III (Social policy), Chapter I (social provisions), Article 117. The Committee should note that we are talking about the Treaty of Rome of 1972—nothing new, nothing modern, nothing being sprung on anybody and nothing that was negotiated at Maastricht.

What was agreed in the Treaty? The article states: Member States agree upon the need to promote improved working conditions and an improved standard of living for workers, so as to make possible their harmonization while the improvement is being maintained". That is a clear statement of aims. There was clear acceptance by the countries which signed up for the Treaty of Rome that we agreed upon the need to promote improved working conditions and an improved standard of living so as to make harmonisation possible.

I remind the Committee of Article 118 because so often in our debates on the social protocol and the social chapter in relation to Maastricht, it has been presented as though it is something totally new and a major departure for the United Kingdom, with the Community trying to take competence and power in areas over which it has not had it before. I hope to satisfy the Committee that that is not true. Article 118 states: Without prejudice to the other provisions of this Treaty and in conformity with its general objectives, the Commission"— I repeat, "the Commission"— shall have the task of promoting close co-operation between Member States in the social field, particularly in matters relating to"— I invite the Committee to note this— employment; labour law and working conditions; basic and advanced vocational training; social security; prevention of occupational accidents and diseases; occupational hygiene; the right of association, and collective bargaining between employers and workers". Those are the areas in which the Community is given competence to act and the Commission is specifically enjoined to act under the original treaty accepted by this country as long ago as 1972.

Article 118A, which follows, was introduced in the Single European Act. That is even more interesting. It introduces the concept of qualified majority voting in that general area in paragraph 2. There is nothing new in the concept of majority voting being brought into social policy. There it is in the Single European Act, accepted by the Chamber and another place. Paragraph 1 says: Member States shall pay particular attention to encouraging improvements, especially in the working environment, as regards the health and safety of workers, and shall set as their objectives the harmonisation of conditions in this area". "Harmonisation" was then considered as the "f" word, although it started with the letter "h". One heard so many speeches at the time against the Commission's activities in respect of harmonisation. But there it is in the treaty accepted by the Government and the country in the Single European Act.

Then there is something that I am bound to say that I find even more interesting. Article 118B says: The Commission shall endeavour to develop the dialogue between management and labour at European level". I repeat, "at European level". In other words, we should encourage a dialogue between European-wide employer organisations and trade unions, which could, if the two sides consider it desirable lead to relations based on an agreement". Where does that come from? It comes from Article 22 of the Single European Act. It is not a new introduction. There is nothing cataclysmic or totally new coming in Maastricht. There it is in the old treaty.

I turn now to Article 119 which refers to equal pay and equal work. That is not a new concept. As I hoped to show earlier, all the concepts in the Maastricht Treaty go back to 1961 to the Social Charter of the Council of Europe which was accepted by this country in 1961 and ratified in 1965. I see the noble Baroness, Lady Thatcher, shaking her head in agreement.

Baroness Thatcher

No.

Lord Richard

I am delighted that we are in agreement on this occasion.

There is no doubt whatever that many of the concepts contained in the Treaty of Rome go right back to 1961. The starting point is 1972 with the Treaty of Rome and the Single European Act.

I now turn to Maastricht and the social provisions that are contained therein. If one looks at it in a fairly objective way, I have to say that it seems to me to be a rather modest and somewhat pallid document. For the life of me, I have never understood the furore that was caused when people actually looked at the treaty and saw what was in it. Many of the same concepts as were in the Treaty of Rome reappeared in Maastricht; and many of the same concepts as were in the Social Charter of the Council of Europe reappeared in Maastricht. It says: The Community Member States shall have as their objectives the promotion of employment"—

Lord Hacking

I am trying to follow the noble Lord's argument. Can he tell the Committee the section from which he is quoting?

Lord Richard

Article 118 of the Maastricht Treaty, which refers to any agreement on social policy concluded between the member states of the European Community with the exception of the United Kingdom of Great Britain and Northern Ireland. I am trying to show the Committee that the opt-out by Britain is, quite frankly, ludicrous. Perhaps we should study further what it says and then we can argue as to whether or not we should have signed it.

Article 1 says: The Community … shall have as [its] objective the promotion of employment". Surely we agree with that, do we not?— improved living and working conditions"— I think that we agree with that— proper social protection"— I assume that we agree with that— dialogue between management and labour"— I believe that we agree with that; at least, we have always said that we agree with that— the development of human resources with a view to lasting high employment"— we agree with that— the combating of exclusion". I am bound to say that I am not quite sure what that means. To this end the Community and the Member States shall implement measures"— I hope that members of the Committee will note the proviso that follows— which take account of the diverse forms of national practices, in particular in the field of contractual relations, and the need to maintain the competitiveness of the Community economy". Anyone looking at that statement of general aims and intent would frankly have to work extremely hard in order to find a point of disagreement.

Article 2 says: With a view to achieving the objectives of Article 1, the Community shall support and complement the activities of the Member States in the following fields". But what are those "following fields"? They are: improvement in particular of the working environment to protect workers' health and safety". Are we against that? Surely not? We are not against improving working conditions; indeed, I have never heard a spokesman for the Government saying that they were not in favour of improving working conditions. Then there is, the information and consultation of workers". I am sure that we are in favour of that. The Government told me often enough between 1981 and 1985 when I was in charge of such matters in the Commission how much they were in favour of information and consultation as regards workers, although they did not like the particular form proposed. The article goes on to cite: equality between men and women". I assume that we are all in favour of that concept. Then there is, the integration of persons excluded from the labour market …To this end, the Council may adopt, by means of directives", and so on.

Perhaps I may just read to the Committee two other passages: Paragraph 3 of Article 2 says: The Council shall act unanimously". The latter word is one of which the noble Lord, Lord Tebbit, will appreciate the true flavour. The passage continues, on a proposal from the Commission, after consulting the European Parliament and the Economic and Social Committee, in the following areas". What are the areas in which we would have a veto if we had gone in? Well, one of them is, social security and social protection of workers". Then there is also, protection of workers where their employment contract is terminated". We also have a veto on that one. There then follows, representation and collective defence of the interests of workers and employers, including co-determination". There too, we have a veto. Following that there is, conditions of employment for third-country nationals legally residing in Community territory". There we also have a veto. Finally, we have a veto on, financial contributions for the promotion of employment and job-creation, without prejudice to the provisions relating to the Social Fund". Those are specific exclusions set out in the social agreement. To describe them in the terms that they have been described is, frankly, absurd. If Members of the Committee would like the example or just one other proviso, perhaps I may just read from paragraph 6 of Article 2: The provisions of this Article shall not apply"— I emphasise the word "not"— to pay, the right of association, the right to strike or to the right to impose lock-outs". All those have come out. What are we left with? We are left with a series of aims in the field of social policy —that is, aims which are designed to improve the working environment and conditions of workers and the availability of information and consultation for them, equality between men and women and integrating people excluded from the labour market. That is the lot.

If one looks in the Social Charter for provisions which, somehow or other, will affect the whole of British industry and which will be Brussels-imposing upon the industrial lifeblood of this country—terms and conditions that Britain finds basically unacceptable and repugnant—one looks in vain; they are just not there.

Faced with that Social Charter, what did we do? Well, we opted out. But how did we opt out? Frankly, again, in the most absurd way. We said to the other 11, "We don't want to participate, but the rest of you, if you wish, should go ahead and carry on with your social policy; we shall have no part of it". We therefore agreed. I am bound to say that it is the most extraordinary agreement. We agreed to authorise those 11 member states—that is, all the others except Britain, to have recourse to the institutions, the procedures and The mechanisms of the Treaty for the purposes of taking among themselves and applying as far as they are concerned the acts and decisions required for giving effect to the above-mentioned agreement". I am bound to say that I find that a somewhat mind-boggling proposition, so far as concerns the practical effects involved.

What will happen during the United Kingdom presidency? There will be a President of the Council. There will also be a social affairs council and a Social Affairs Minister. During my day I had the pleasure of meeting the noble Lord, Lord Tebbit, at many Council meetings. The Social Affairs Minister will sit at the meetings and someone will say, "Now we are going to discuss the policy under the social agreement". The Minister will then vacate the chair. Presumably someone else—I am not sure who—will sit in the empty president's chair and the other 11 will continue with the discussion. The other 11 may or may not reach a conclusion, I know not.

Let us suppose that there is a proposal for a directive emerging from the other 11 under this extraordinary opt-out. What will happen at COREPER? Is the British Ambassador to the Community supposed to withdraw from COREPER when social policy is discussed? What will be the relationship between social policy being discussed by the 11 under the terms of the agreement on social policy and social policy being discussed under the original terms of the Treaty of Rome? I do not know how it is supposed to work and I do not believe that anybody knows. It is certainly unprecedented and, with great respect, it is totally unthought-out. What will be the relationship between these affairs and competition policy? How is the competition directorate supposed to react to the British opt-out? I do not know what is being said about it and perhaps at some stage the noble Baroness, Lady Chalker, may be able to tell us.

Are we to participate in the health and safety provisions under Article 118a of the Treaty of Rome or are we not? If we are, on what kind of basis? As regards social policy, one leg is in if the label on it is Article 118a of the Treaty of Rome but the other leg is out if the discussion is to take place under the agreement on social policy merely by the other 11. As an example of Britain being at the heart of Europe that almost defies belief.

It is worthwhile putting on record that there are only two political movements in the whole of the Community which are opposed to the agreement on social policy. One is M. Le Pen's movement in France and the other is the British Conservative Party. I am bound to say that the company which the Conservative Party keeps is entirely a matter for itself but I really should have thought that that fact might be one which they would seek to ponder. All the other conservative parties in Europe and all the other members of the People's Party group in the European Parliament have signed up to the social protocol. UNICE, the European employers' organisation, does not object to the existence of the social protocol. Indeed, according to discussions that I have had with some of its members, it believes that the protocol is positively advantageous because there is a point of contact between them and the other social partners. It is also interesting that a recent conference of the European People's Party's heads of government and party leaders commented on the Government's opposition to the social chapter. It stated that it: deplores the fact that the British Prime Minister and leader of the British Conservative Party, took a negative position at Maastricht concerning European political union, particularly with regard to a common social policy". What a position to get this country into. It is not only people such as me and my political allies in Europe who are saying that the Government's position is wrong but every other conservative party in the Community and every other natural ideological ally of the Conservative Party is saying precisely the same thing. I find it difficult to understand why the Government find themselves in this position.

When one goes back to 1961 and looks at the social charter of the Council of Europe one sees that the aims were, if anything, more comprehensive than those set out in the Maastricht Treaty. We accepted that and we signed that treaty. Incidentally, a Conservative government signed the treaty; it was ratified in 1965. In the Treaty of Rome we accepted Community competence in the areas of social policy —and that was done by a Conservative government. In the Single European Act we accepted further competence in the area of social policy—and that was done by a Conservative government. When it comes to Maastricht the policy is suddenly presented as something totally new and utterly unacceptable which will ruin the British economy.

Perhaps I may conclude on this note. If being without the social chapter was so marvellous for the British economy I should have thought by now that we would be the most prosperous country in Europe, we would have the fewest people out of work and the best balance of trade in the European Community. I need not put the comparable figures for the other side of the picture. Our standard of living has fallen to eighth place in the European Community. Our unemployment is the highest; it rose by 65 per cent. between January 1990 and January 1993. Despite Britain having the unique advantages of North Sea oil and gas, only Spain in the European Community has a worse total deficit. That does not say much for opting out of the social protocol. I beg to move.

Lord Rochester

Like the noble Lord, Lord Richard, I have found it difficult to understand why the Government have been so determined not to subscribe to the agreement on social policy reached by the other 11 member states. The Government are rightly concerned about the need to preserve our competitiveness in the face of competition not only from Europe but from the United States, Japan and countries in the Pacific basin. As someone who was employed for many years in a large multinational company, I sympathise with that concern. However, as the noble Lord, Lord Richard, has said, Article 1 of the agreement states specifically that the measures to be implemented should take account of the diverse forms of national practices and the need to maintain the competitiveness of the Community economy. That article could well have been inserted to satisfy the United Kingdom. Much as I dislike some of the Government's recent trade union legislation, there is nothing in the agreement which calls for the repeal of that legislation. Article 2—and the noble Lord, Lord Richard, referred to that—excludes specifically pay, the right of association, the right to strike and the right to impose a lock-out.

There is one clause in the agreement which has troubled me; that is, paragraph 3 of Article 2, which gives the Community competence with regard to representation and collective defence of the interests of workers and employers, including co-determination. There is a danger that that provision could give to representatives of employers and trade unions too privileged a position in the legislative process. However, even that clause requires the Council to act unanimously on a proposal from the Commission so that the Government could easily veto any proposal coming forward under that clause if they so wished.

In my view, it is, to say the least, regrettable that instead of continuing to be in a strong position to fight our corner within the Community, Britain has been excluded by the Government from the agreement on social policy. We are now barred by the protocol from taking part in further deliberations on matters covered by the agreement. Therefore, we shall be unable to influence the future development of European policy to ensure that it is suited to conditions in the United Kingdom.

If we wish to join the club later, we shall find ourselves barred by rules which have been framed without our taking a part in framing them. It would be much better if we were to accept the agreement now and I support the amendment moved by the noble Lord, Lord Richard.

Lord Kilmarnock

I, like the Liberal Democrats have preserved a Trappist silence since Second Reading and I am afraid that I must part company with them on this amendment. The A,greement on Social Policy to which the amendment refers and from which we opted out by means of the protocol pledges the other member states to continue along the path laid down in the 1989 Social Charter.

I was initially fairly relaxed about that document. I questioned its rather grand claim to constitute a: Draft Community Charter of Fundamental Social Rights". However, we already do quite a number of things described in that document. In effect, we have a minimum income through our social security system. We have the right to freedom of association and collective bargaining. We afford European Community citizens the right to training and education courses on the same terms as our own people. We have reasonable health and safety regulations. We protect children and adolescents under various Acts of Parliament and so on. In some respects, we are ahead of our fellow member states. We welcome freedom of movement and I agree enthusiastically with Section 4 of the Social Charter, which refers to the elimination of those obstacles constituted by the non-recognition of certain categories of qualification or occupational skills. We have a better record on that than our neighbours. Try setting up as a doctor in France.

We may fall down on equal pay for equal work by men and women but one wonders what effect that would have on women's employment unless practised sensibly with scales of pay agreed at plant or local level.

The things that we do not do are the daft ones. We do not have a maximum duration of working time per week, which attacks the liberty of the individual and the freedom of contract. We do not have works councils and there is no sign of much demand for them from the Labour Party. There is a present tendency towards smaller production units, where the main hopes for growth lie. Profit-sharing schemes and workers' shares in the company are much more to the point.

When we come to the social agreement to which the amendment refers, we receive slightly confused messages as to what the other 11, without us, have signed up to. On heavy issues such as social security, employment contract and co-determination—which I presume means industrial democracy—unanimity is required. On other matters like equal pay, that is not required. Therefore, overall, I am left with an uneasy feeling that the social agreement to which the Labour Party invites us to subscribe, is backward-looking and smells more of the corporatism of the 1970s than the flexible labour market which the 1990s already demand and indeed impose.

There are other dangers. There have been alarming stories in the press recently about the decline of the EC's share in world trade, about which the noble Lord, Lord Aldington, will know a great deal more than I do. But, if true, then labour costs are likely to lie close to the heart of the matter.

On the employment side the most optimistic forecasts predict 2,700,000 unemployed at the end of the century. Although that is lower in percentage terms than in several Community countries, it is far too high for the health of our public finances and indeed for the health and happiness of the people. Every conceivable effort must be made to reduce that figure. It is far higher than when the committee on unemployment under the chairmanship of the noble Baroness, Lady Seear, started its work in, I believe, 1980, when there was a shock, horror response to 1.5 million unemployed.

The Committee may be interested to know that our long-term element of unemployment, which we so much deplore, is lower as a percentage of the total unemployed than in most of the rest of the Community. The noble Lord, Lord Skidelsky, is not present but he suggested in a recent paper that this may be due to the lower costs of hiring and firing in Britain which make it easier for employers to shed labour in hard times and take it on in good times. British workers may therefore be more vulnerable to short-term but less vulnerable to long-term unemployment than our neighbours. Adopting rules which make it more difficult if not impossible to enjoy this flexibility seems to me frankly misguided. Social protection is fine in principle but not so fine when it is protection against employment.

I am in favour of convergence and the main economic indicators set out in the treaty, whether they lead to a common currency or not, because they must help towards achieving a more stable economic environment for businesses and trade. The Chancellor of the Exchequer said this in his recent Mansion House speech. I agree with him. However, I am much less in favour of convergence on social policy because that is the area of freedom we at present retain to deal with the results of the globalisation of the market in our own way.

We have a big debate coming up on social security and the welfare state. It is quite wrong in my view that we should surrender any freedom of action in that area to a supranational regulatory body. This is a field in which we have a right and a duty to make our own democratic experiments and grope towards our own solutions—which is what a number of individual states in the United States of America are currently doing.

On all these grounds my earlier relaxed view of the Social Charter as something we could rub along with and live with not too unhappily has hardened into support for the protocol. As I said on Second Reading, it may erode under challenge in the courts but it is worth trying to preserve. I believe it was an important achievement on the part of the Prime Minister.

If the Labour Party presses and wins this amendment, as it well knows, it risks losing the treaty in its entirety. I gather that that is not the policy of the Labour Party. Gesture politics would cost the Labour Party dear. That is no doubt why that party would be supported by the noble Lord, Lord Tebbit, and his noble friends, who want precisely that. Unholy alliances have their costs. I shall be helpful to everyone this evening, except perhaps to the noble Lord, Lord Tebbit, and his noble friends. If there is a Division I shall vote against the Labour Party's amendment, which it does not in fact seriously want to win —I do not see how it can want that—and I shall enlist as an irregular guerillero in the ranks of the noble Lord, Lord Hesketh, on a temporary basis of course, to assist him in winning a Division he wants and needs to win.

9.15 p.m.

Lord Cockfield

I start with what may be regarded as a purely technical point but I believe there is substance in it. I wonder whether the noble Lord, Lord Richard, has succeeded in drafting his amendment correctly because, if one amends the words of the Bill, one still retains in line 26 of page two the words, has come to a Resolution on a motion". In ordinary English usage one can come to a negative resolution just as well as one can come to a positive resolution. I know that the noble Lord, Lord Stoddart of Swindon, has assured us time and time again that we must not look at the way he has drafted his amendments because he had to draft them the wrong way round to enable him to debate particular points. However, the noble Lord, Lord Richard, is a distinguished lawyer and I should have thought he could at least have got his drafting right. It is not that I wish to attack his professional competence, which is of the very highest order; it is simply that if he has his drafting wrong, possibly he has his arguments wrong too.

It was always a matter of enormous relief to me that when I was in Brussels I never had to deal with the question of social policy. That was simply because while I produced the single market programme in six months, it took my colleagues another four years before they produced the Social Charter and by then, by the kind offices of my noble friend Lady Thatcher, I was safely back in the United Kingdom and could shelter behind the barricades. One may have excellent policies but there can, of course, be occasions on which the best of policies can be taken too far.

In this country we have a very long and honourable tradition of social policy, running right through the Factory Acts, to the recognition of trade unions—which was introduced by Disraeli, a Conservative Prime Minister—to the establishment of the welfare state. It was not the Liberal Party of Mr. Lloyd George which invented the welfare state. The welfare state was invented by Otto von Bismarck, the Iron Chancellor of Germany, who was normally regarded as a Right-wing conservative, although I do not know whether he was as Right-wing as my noble friend Lord Pearson of Rannoch.

It was Bismarck who introduced the concept of insurance against unemployment, sickness and old age. He did so on a very valid principle that we ought always to bear in mind. In those days, he faced the growth of communism and socialism. I do not equate the two; I am simply saying how Bismarck saw the situation. He felt that the best defence against socialism and communism was for the state as a whole to look after its citizens in times of difficulty and distress. We then moved that system to the United Kingdom when Mr. Lloyd George was Chancellor of the Exchequer in the early years of the present century.

I said earlier that even the best of policies can be taken too far. Perhaps I may give the Committee a specific example. When I was young and earning a great deal of money. the top rate of tax on earned income was 97.5 per cent.

A noble Lord

It must have been a Labour Government!

Lord Cockfield

No, it was not. That was under a Conservative Government, with Mr. Winston Churchill as Prime Minister. I am sure that not even my noble friend Lord Aldington would regard Mr. Winston Churchill as a socialist or a supporter of the Labour Party.

As time went on, it became recognised in the country generally that rates of taxation of that kind on personal income were insupportable and did great economic damage. It is to the perpetual credit of the Liberal Party that twice it forced the Labour Government to reduce the standard rate of income tax. If one ever wants an argument in favour of a hung Parliament, that is the only one I can think of.

Therefore, however valid, right and proper social policies are, they can be pushed too far. I am very sorry that the noble Lord, Lord Richard, did not complete his story of what was happening in Europe because even if one reads the memorandum which was produced by Jacques Delors (for whom I have the utmost admiration and with whom I had a very close and effective working relationship) for the Summit at Copenhagen, one will see the doubts creeping in about the competitiveness of European industry.

Much more importantly, yesterday the ruling Christian Socialist coalition in Germany decided to cut government expenditure by a figure which would rise to 50 billion deutschmarks a year. Being up to date I would have thought that that would have been on the tip of the tongue of the noble Lord, Lord Richard. Not even the British Government have remotely had the courage to cut government expenditure in this country by a figure approaching that level. That has been done because of a recognition that the burden of social security has reached a level that even German industry, with its great competitiveness—and it is highly efficient—can no longer meet the competition it is having to face in the world. In other words, progress on social policy has reached the point where it is imposing a burden that cannot be borne without doing serious economic damage. To me, the only question is whether it would have been better for us to be inside the Community advancing that argument and seeking to get sense; or whether we are better off outside, saying, "A plague upon all your houses. You go your way and we'll go ours".

It is a difficult issue. I do not seek to answer the question. But to me that seems to be the essential issue. It is not a question of defending the present social policy at the barricades. Something has to be done about it; there is no question about that. It is purely a question of what is the best way. In the present difficult circumstances the line that was taken by our own Government may well have been the best line to take, in particular having regard to the vulnerability of British industry. I wish at times that we were a little more honest about our own failings. We have great strengths but we also have failings. Possibly, from time to time we ought to face up to them. We are in a more vulnerable position than many of the countries on the Continent. It may well be that in those circumstances the judgment of the Prime Minister was right.

Lord Ewing of Kirkford

Having listened to the noble Lord, Lord Cockfield, perhaps I may say as kindly and gently as I possibly can that if it was a great relief to the noble Lord during his period of office in Europe that he had no responsibility for social policy, that is absolutely nothing to the great relief of workers and people in this country that he had no such responsibility.

It has been noticeable in the debate that claims that this country should have freedom from the conditions of the social protocol have implied—it has not been stated explicitly—that that is so that our Government may hold down wages and earnings and have the freedom later this year, when a unified budget is 'presented to another place in November, to modify and reduce social benefits. It has never been stated by the Prime Minister or any other Government representative or supporter, including the noble Lord, Lord Kilmarnock, that the opt-out was obtained in order to improve the social conditions of the people of this country. The Government talk about the need for flexibility. Their approach to flexibility is totally different from mine. My approach would be that described from the Front Bench by my noble friend Lord Richard. We ought to agree to the social protocol: to work to improve working conditions.; to improve employment prospects; to improve employment levels; and to meet the target of equal pay for equal work between men and women.

How on earth the Prime Minister can claim that to negotiate the opt-out of this country from all those provisions in the negotiations was an outstanding success on his part is beyond belief. Traditionally, a Conservative Government have sought to depress wage costs and other benefits by their unremitting attack on the trade union movement through the various trade union Acts, and amendments to those Acts.

Recently we had the astonishing situation on the trade union Bill where, on Third Reading., a rnajor amendment was introduced which took away further rights from workers. Local authorities were forced to contract out to private companies. Employees of the local authorities would have the choice of going to work for the private company or accepting dismissal.

That is the method that has been used by Conservative Governments since 1979 and which will go on being used in this country until a change of Government. It has nothing to do with the social contract. The CBI talks about the burden that the social contract would place on British industry, but it has failed to produce a single piece of evidence to show that it would do that. It does not happen. In the four or five key elements of employment costs, the United Kingdom has the veto. The elements have to be approved unanimously and therefore our country has the veto.

We are forced firmly to the conclusion that the reason why the Government want flexibility is not in order to meet or better what our 11 partners are doing in Europe but to depress living standards, wages and social benefits in this country because of the mismanagement of the economy over the years.

I wish to respond to two points raised by the noble Lord, Lord Kilmarnock. The whole question of the maximum number of working hours is clearly misunderstood, particularly by the noble Lord. The agreement does not state that working people can only work 48 hours. What it says, and what the Government astonishingly object to is that an employer cannot force an employee to work more than 48 hours in each week. That is totally different from saying that an employee can only work 48 hours.

I have heard it said that there is no demand for works councils. There are some in the United Kingdom, but I regard them as domestic works councils. However, the works councils that are being discussed in the context of this debate and of Europe are those which are set up across the boundaries of member states of the EC. Through them, we may deal with the situation where companies—and this is particularly true of American companies—set up plants in different countries in the EC. Hoover is an excellent example: it established a plant in Dijon in the south of France and one in Cambuslang, near Glasgow, in Scotland and played one group of workers off against the other. Both factories have finished up with the worst of all worlds.

The protocol suggests that works councils should be set up across the boundaries of Europe so that workers in all factories can get together and discuss problems relating not only to their plant but also to the company as a whole. It is no great credit to the British Government that they have opted out of the social compact. Recently, the Department of Trade and Industry ran those disgraceful advertisements in Germany where posters published two league tables, one of earnings in this country and the other of earnings in Germany. The tables showed that labour costs through earnings in this country were only about two-thirds of those in Germany. It was meant to be a credit to the United Kingdom, but how insulting!

I point out to the Government that that difference had absolutely nothing to do with the opt-out and the social chapter. The labour cost differential has been there for the past 14 or 15 years but is nothing at all to do with Maastricht. For the Government to try to present that as evidence in support of their position on opt-out is misleading beyond belief. I do not know whether the noble Lord, Lord Kilmarnock, was speaking for all the Cross-Benchers; I am assuming that he only speaks for himself—

Lord Kilmarnock

Perhaps I may ask the noble Lord to give way for a moment—I know that he has not been with us for very long. All Cross-Benchers speak strictly for themselves.

Lord Ewing of Kirkford

I understood that all Members in this Chamber spoke strictly for themselves—at least, that is the impression that I have gained during the debates on this Bill. I hope that what I have said has been able to attract support for the amendment of my noble friend Lord Richard from parts of the Committee other than the Liberal Democrats and the Labour Benches. We would be far from defeating the treaty if it were passed tonight. There is no point in the noble Lords, Lord Cockfield and Lord Kilmarnock, saying to the Labour Party: "If you support the social contract and it is carried by the House tonight, you will wreck the treaty". That is saying that the Prime Minister is prepared to abandon absolutely everything else that we negotiated at Maastricht on this one single point. I do not believe that for a minute, and I do not ask the Committee to believe it either.

Baroness Carnegy of Lour

I must say to the noble Lord, Lord Ewing, that during the late 1970s and the early 1980s I was representative of the Scottish local authorities on the Manpower Services Commission, which was responsible at that time for employment services and employment related training. It was a very great struggle to try to improve things at that time. In the late 1970s industry was desperately uncompetitive in comparison with our European friends, the United States and Japan. The markets were there, but it was hard to win them. We had what was called "the British disease". Civil servants, as the Committee may well remember, talked of their job being "the orderly management of decline". The conventional wisdom, even in my own political party, was that there would never be so many jobs again, and we must simply accept that.

Then, in 1979, there was a general election and my noble friend Lady Thatcher took over the reins. Before long the Manpower Services Commission was being asked to work to a completely different set of assumptions. I remember one of the trades union representatives on the Manpower Services Commission coming back from a meeting with my noble friend and saying: "Believe me, the parachute brigade has arrived". High employment was not now seen as inevitable. The markets were there. The problem was inflexibility in the labour markets, in our jobcentres and employment services, and in our employment practices and skills. The problem lay in lack of incentive to employ people.

My noble friend and her employment Ministers, to whom I was responsible—first my noble friend Lord Prior and then my noble friend Lord Tebbit—were very determined indeed in their demands upon the commission. We were extremely surprised at their optimism. But it began to work. We saw it on the Manpower Services Commission and, I say to the noble Lord, Lord Ewing, we saw it equally on the Scottish Economic Council, of which I was also a member.

We have come a long way since those days. We have improved our productivity and work practices as well as the energy and enthusiasm of our workforce. A million more women came into the workforce during the 1980s, yet unemployment overall was halved. World recession has been a setback in our markets. But the productivity and potential of our business is there, ready to respond to the markets as they return. More than half those markets are within the European Community.

The social chapter threatens all that. It seems to me that Parliament owes it to our workforce not to reverse what has been so hard won by the workforce and the employers. Were we in any doubt of what the social agreement will mean in that respect, we need look only at the comparative figures for the non-wage employment costs across a number of countries. In Japan and the United States they are 24 per cent. and 27 per cent. respectively of the whole of employment costs. In the United Kingdom—not much worse than those figures now—those costs are 30 per cent. In Germany, France and Italy the figures are 46 per cent., 47 per cent. and 51 per cent. respectively.

The noble Lord, Lord Cockfield, reminded the Committee of what is happening in Germany. There may be changes in that respect. It may well be that there will come a moment when the social agreement changes and we shall be extremely glad to take part in it. It seems to me that at the moment Parliament owes it to the British workforce to opt out of that agreement.

Baroness O'Cathain

I fear that we are in danger of being lulled into believing that the Treaty of Rome, the Single European Act and the Treaty of Maastricht are all one when it comes to the social contract. Certainly the marvellous rhetoric of the noble Lords, Lord Richard and Lord Ewing, made me feel that there is perhaps not much difference between them.

The noble Lord, Lord Richard, went through Article 118 of the Treaty of Rome and Article 118A of the Single European Act. Let me repeat to the Committee the words in the extracts that he read: member states agree upon the need to promote … shall act in close contact …shall make studies delivering opinions and arranging consultations …shall consult … shall encourage … encourage improvement". But the Maastricht Treaty states: shall adopt by means of directives".

Lord Richard

I am sorry to interrupt the noble Baroness but I am sure that she will not wish to mislead the Committee. I ask her to look, please, at Article 1 of the Maastricht Treaty. It talks about "the promotion of".

Baroness O'Cathain

Yes, but there seems to me to be a measure of coercion in Maastricht. I believe that we are right to opt out in this respect. The other measures "encourage" and "promote" and there is definitely a method which states that it, shall adopt by means of directives". The Maastricht Treaty also says that such directives: shall avoid imposing administrative, financial and legal constraints in a way which would hold back the creation and development of small and medium-sized undertakings". It says nothing at all about large undertakings. It seems to me that the difference between the Treaty of Rome, the Single European Act and the Treaty of Maastricht is that there is compulsion and that there will be discrimination against large organisations. I believe that that is not right. As I pointed out at Second Reading, the imposition of the additional higher social charges, which would be equivalent to the social charges in the mainland European countries at the moment, as the noble Lord, Lord Kilmarnock, said, would impose an enormous burden on our industry and indeed on our major companies.

The noble Lord, Lord Richard, said also that of all the political parties in the European Community, only two did not agree to the social contract; namely, the party of Le Pen and the United Kingdom Conservative Party. That may be true of political parties, but the reality is different with businessmen on the ground. One can find a large measure of agreement between the businessmen in Germany, France, Belgium and in this country in regard to the imposition of social charges and the huge burden which would emanate from the Maastricht Treaty.

At Second Reading I referred to those charges; and in practically every case—certainly in the cases of Germany and France—the figures were over 70 per cent. compared just over 30 per cent. in terms of the United Kingdom. As the noble Lord, Lord Cockfield, said, it is important that we maintain the competitiveness that has been won in such a difficult way over the past few years. British industry is much better that it was. It is winning the markets. Let us not do anything that will militate against it. The UK Government have done the right thing in opting out, and I hope that the amendment will not be accepted.

9.45 p.m.

Lord Tebbit

I agree with the noble Baroness, Lady O'Cathain. But she also made another valuable point (perhaps unintentionally) in regard to the progressive nature of the duties which have been imposed with the succession of treaties. We can all assume that the next treaty will go in the same direction.

I should like to say something also which may be helpful to the noble Lord, Lord Richard. I am sure that he does not expect that and will be slightly hesitant when I offer it to him. Contrary to what my noble friend Lord Cockfield said, the amendment of the noble Lord, Lord Richard, makes good sense from his point of view. After all, he speaks of two essentials in the debate. First, that he wants the treaty to be ratified; secondly, that if possible the social chapter should be part of it when it is ratified. My feeling is that, at the end of the day, if push came to shove, he would take the treaty without the social protocol rather than lose the treaty. Therefore his amendment is well judged. If he required that the outcome of the Motion concerning the protocol on social policy had to be one which came down against the social policy, he would have lost the social chapter. If the vote came down against the social policy, he would have lost the treaty. Therefore, from his point of view, the amendment is logically constructed.

However, I take a different view. As the Committee will know, I am opposed to the social chapter for the excellent reasons set out by the noble Baroness, Lady O'Cathain, among others. In any case., I am against matters in this sphere being decided outside this Kingdom. Whether or not we should have a 48-hour week should be decided by British people in Britain and not in a forum where we are in a permanent minority. I know that that is not the view of all Members of the Committee. There are many who feel that they have a better chance in that larger forum; that is, they have an instinct that the British people would not do what they wanted and therefore they will look for their will to be imposed on the people of these islands by foreigners.

I take a contrary view, and I have the feeling that in that I would have the support not only of most Members of this House but the overwhelming majority of the people of these islands who are still attached to the idea that they like to pick their own governments and to make their own laws to the maximum possible extent. But I want also to say why I think that the social protocol, as it is in the treaty, is not of any great protection to us in the United Kingdom.

Let me put it this way. If that protocol was not in the treaty, if there were no mention in the treaty of social policy, we would be back to the situation winch was described by the noble Baroness, Lady O'Cathain. Now let us consider the manufacture of widgets in, shall we say, Lyon. Under those circumstances—that is, the circumstances of today —if he finds that he is losing business to a manufacturer of widgets in Birmingham, he might feel that the competitive field was not fair and that it was slanted towards Birmingham rather than towards Lyon. But if he were to go to the court and say, "My Government imposes these costs on me which the British Government do not impose on my competitor in Birmingham", I think that the European Court would say, "We have the greatest sympathy with you but that is not a consequence of European law". If the treaty is ratified, even with the protocol, that same widget maker would go to the court and the court would say, "Ah, yes, it is European law which is imposing these costs upon you; European law which applies only to 11 states but nonetheless it is European law. And it is European law that is allowing the field of competition to be sloped against you". Now the court would not say, just like that, "We shall impose the whole of the social chapter", but it would be what I referred to this afternoon as the growing salami—slice, by slice, by slice, until we had got the whole sausage, one judgment after another, on grounds of competition, or perhaps of health and safety, until we had got the lot. So I take the view that we would be better off without that protocol.

I acknowledge that we shall not be able to get it out of the treaty because we have the saga, of which I shall remind the Committee as briefly as I can, of Amendment No. 27 and its successors in the other place. Let me remind the Committee that on 27th January Members in another place were told that, if they enacted Amendment No. 27—the famous Amendment No. 27—which said that the social chapter should not be part of the treaty, two things would happen. First, in doing so they would impose the social chapter on the United Kingdom; and, secondly, they would destroy the treaty by making our treaty different from that signed by the other 11 and that therefore it would require a new round of negotiations.

Enormous pressure was put on Conservative Members of Parliament over that issue at the end of January—all manner of threats were made against them—because it was said to be such a vital issue. It had been explained with great clarity by my right honourable friend the Minister of State, Mr. Garel-Jones, in exactly the way I have described. But on 15th February it had all changed. The Attorney General was produced and my right honourable friend the Foreign Secretary appeared. He said that Amendment No. 27 was totally ineffective and that it really did not matter a scrap. Because of the Royal Prerogative, it did not matter what the other place said or indeed what we say; and the Government would ratify, under the Royal Prerogative, the treaty which they signed at Maastricht. Since there was no discordance in British domestic law it did not matter a scrap. Incidentally, Amendment No. 27 would not have the effect of bringing the social chapter to Britain.

That is why we have in the Bill, on page 1, the little note, excepting the social protocol. We are told that it is just a little piece of flummery which does not matter. I shall not go through the whole process, but in consequence we also have in the Bill Clause 7 which the noble Lord, Lord Richard, would amend. That clause requires that the Act will not become effective until after there has been a debate on a Motion on the social policy. That has been described by some people as the ticking bomb under the treaty and by others as an issue which does not really matter because it does not matter which way the vote goes as the treaty will be ratified anyway.

I wish to help my friends in government. It seems to me that the debate which is provided for by Clause 7 has some rather severe risks for the Government and that is why they did not want Clause 7 in the Bill. It was not their idea to have this debate; it was forced on them. If Parliament should vote to adopt the Protocol on Social Policy, the Government will have a very nasty problem. What should they do? Should they simply defy Parliament? I believe that to be very difficult indeed. So should they adopt the social chapter and say to our partner countries "We should like a very quick adjustment to the treaty"? I am sure they would agree to that without too much trouble. We shall all then have the social chapter.

I should not like that to happen—nor indeed would the Government. I believe it was this afternoon that I asked my noble friend—the days spent on this debate merge one into the other at times, but it is now almost over—whether she would say that it was a vital British interest to ensure that the social chapter was not imposed on us. She managed to avoid saying that. She escaped by saying "We have arranged it all by having the protocol". But is it a vital interest in the Government's view? If the vote went the wrong way for them, which would they abandon—their commitment to oppose the social protocol and social chapter or their commitment to see this treaty ratified? Which way would they jump? I do not know, and I very much doubt whether my noble friend the Minister will tell us. I should be very surprised if she did.

But I have a way of saving my friends in government from all this potential embarrassment—and that is for them to join me and my friends in voting against Clause 7 standing part of the Bill. That is what the Government wanted in the other place. I have given them the opportunity to achieve it in this place. Whether they join me or not, I shall vote this evening for what they believe in.

10 p.m.

Baroness Williams of Crosby

I was riveted by the discourse of the noble Lord, Lord Tebbit. I was waiting to see just what rabbit would come out of the hat. I am waiting with even more anxiety to hear the Minister's response because the noble Lord asked the 64,000 dollar question, to which we should all like to get a reply. I should add that the debates may all merge, day by day, one into the other, but each one is lightened, coloured and infused by the tenacity and determination of the noble Lord.

I should like to follow the noble Lord on one other point, and to underline something that he said. I believe it is of great significance and that we have talked about it only briefly. I refer to the possible "salami tactics" which he described when the decision by the British Government to abandon or move away from the social protocol is tested under competition policy in the European Court. I suspect that the noble Lord, Lord Tebbit, was not entirely wrong in believing that under the terms of competition policy it might be extremely difficult to retain the advantages that the Government believe that they will get by opting out of the social chapter. Indeed, it is difficult to believe that the court would not find some elements of that to comprise unfair competition. Such advice as I have been able to take from very expert people in this area suggests that there may be a good deal in what the noble Lord, Lord Tebbit, said on that point.

I should like to refer to two other contributions to the debate. I refer first to that made by the noble Lord, Lord Kilmarnock, for whom I have great respect. I should like to underline what the noble Lord, Lord Ewing, said with regard to the misunderstanding about the 48-hour week because it was an important and significant misunderstanding. This House often refers to that particular directive as if it were related to a decision stating that employees could not work more than 48 hours a week. That is not the case. The case is that they cannot be obliged to do so. I should have thought that anybody who declares themselves in favour of the right of individual choice would regard that as upholding, not overriding, individual choice. It must be right that people cannot be compelled to work more than 48 hours a week. To oblige them to do so is a form of abuse that I should have thought that we had put behind us a very long time ago.

Lord Monson

I am grateful to the noble Baroness for giving way. Is it not the case that what she has described applies only until 1999, after which the 48-hour week will he obligatory?

Baroness Williams of Crosby

I believe that is correct. But that is not the point at issue in the present discussion. The argument which I am about to put forward is that as members of the social chapter, we would be in a very strong position to influence that discussion which has not yet in any way been concluded. It is not the case at present that we would be bound in the way in which the noble Lord, Lord Kilmarnock, suggested.

The noble Lord, Lord Kilmarnock, for whom I have the greatest respect, said another thing which I do not believe to be quite accurate as he put it. He mentioned the advantages enjoyed by states in the United States as a result of being able to operate flexible labour markets. He is not wrong in that respect, except in three ways which are very close to the social chapter. Federal law determines that there shall be a minimum wage payment. Federal law determines that there shall no discrimination between men and women on the grounds of the amount that they are paid for equal work. Federal law determines that there shall be no discrimination against people of ethnic minorities on the grounds of the pay or conditions for which they work and to which they are subject. Those three sweeping provisions do, I think, go quite a long way to cast doubt on the claims for flexibility in the United States that the noble Lord, Lord Kilmarnock, made. In that context he specifically referred to equal pay.

I should now like to spend a few moments on the remarks made by the noble Lord, Lord Cockfield. I have the greatest admiration for the noble Lord. I have always found him a consistent and logical arguer and thinker in every context. He arid I worked together for many years. However, for once, I have to say that I did not find his argument convincing. As the noble Lord, Lord Richard, pointed out, both the original Treaty of Rome and the Single European Act made specific reference to health and safety, working conditions, equal pay and other social provisions. To all of those the noble Lord, Lord Cockfield, was in one sense or another party, either as a Commissioner or as a member of Her Majesty's Government. Therefore, we have to ask ourselves why he now regards the social protocol as something in respect of which we should stay outside. However, I felt that his argument was very finely balanced.

Perhaps I may press the noble Lord for just a moment. The argument that he has consistently put forward is that the United Kingdom should attempt to influence the European Community from inside and that that is the proper place for it. He has advanced that argument in this Chamber and in other places time and again in respect of the position and the active involvement of the United Kingdom. However, that suddenly comes to a stop with regard to the social chapter. I do not understand why.

The noble Lord, Lord Richard, pointed to many of the provisions in the social chapter which go a long way to meet the interests of the United Kingdom. However, there are two declarations to which he did not have time to refer, one of which makes it plain that those provisions shall be minimal and that they shall have full regard to the needs of small and medium-sized industries. Time and again in the chapter reference is made to flexibility, to the need for there to be a response to the needs of small companies and, in many other ways, the whole provision of the social chapter is expressed in extraordinarily moderate terms. If the noble Lord, Lord Cockfield, is right—he may well be—that we are now about to enter a major discussion of the social costs that any modern economy can bear, then surely it is better that we should be inside the Community to debate such issues and not outside.

It is by no means clear that the greatest economic advantages invariably go for one side of the argument about ideology. Perhaps I may give the Committee just two instances. The noble Baroness, Lady Carnegy of Lour, referred to unemployment. I do not think that she was quite right in suggesting that it had been halved since 1979—at least, that is not my impression of the statistics. However, there is one respect in which, undoubtedly, the Community countries of the Continent have a major advantage over this country. Perhaps I may take the examples of France and Germany. In both cases, the levels of youth unemployment compared to the general levels of unemployment are very much closer than they are in the United Kingdom. That is not because of what is called "flexible labour policy"; it is because the Federal Republic of Germany and the other countries of the Continent have had worked-out and detailed apprenticeship policies which mean that the great bulk of young people in those countries are trained in a way that they are not in this country. That is a major advantage for those countries which believe in social policy.

Before I conclude, I shall refer to another instance. There is one area in which the United Kingdom has shown an immense level of social efficiency compared to most other countries. The National Health Service costs just over 6 per cent. of gross national product. The health services of the United States cost just over 13 per cent. of GNP; that is, more than twice as large a proportion of GNP, although 32 million American citizens are not even covered.

I simply wish to point out once again that the United Kingdom could make a major contribution to the discussion on social policy. There are steps that we have taken which would assist us in keeping public expenditure down without doing it at a cost to the most disadvantaged people in our society. I believe that we are right to believe that we should remain members of the Community and of the social chapter. I believe that we should have great reason to want to be part of a discussion which the noble Lord, Lord Cockfield, believes will take place and that we have much to contribute to that discussion.

Lord Eatwell

A number of references have been made to the likely impact of the social protocol on the competitiveness of the Community and the UK. We have heard today of the impact of the heavy social costs in France and Germany on the competitiveness of those countries. Since the share of world trade of France and Germany have stayed the same or increased since 1979, where the share of world trade of the UK has fallen, it seems to me that the impact of those social costs has not obviously inhibited their competitiveness vis-à-vis the UK.

The real reason why there is a discussion about the issue of competitiveness and why at the Copenhagen Summit, referred to by the noble Lord, Lord Cockfield, there was a degree of nervousness about European competitiveness is, to paraphrase a famous document, that there is a fear stalking Europe. It is the fear of the Pacific rim countries and the competitiveness of the European Community as a whole vis-à-vis the Pacific rim. That fear is being used as the pretext for the dismantling of social provision in this country and in other European countries; looking backwards at the gains that have been made and looking forwards with respect to resisting the implications of the social protocol.

I wish to refer specifically to the argument that the social protocol will result in a loss of competitiveness for the EC as a whole. Perhaps I may say as an aside that even if that is true —and for reasons which I shall sketch out I do not accept that argument—the impact on Community competitiveness of the common agricultural policy, which the Government accept, is vastly greater than any impact there might be of the social protocol.

I turn to the question of competitiveness and the role of the wage costs in competitiveness. Let us suppose that the technology used in Europe is the same as the technology used in the Pacific rim where wage costs are lower. One might expect that because wage costs are lower the prices are lower and that those countries are more competitive. That is true at any given exchange rate but it is not true when the exchange rate can adjust between Europe and the Pacific rim to balance the competitiveness which derives from different wages. That is exactly what has happened during the past 100 years as industrialisation has spread from one region of the world to another.

The real issue in the difference in competitiveness between ourselves and the Pacific rim countries is not wage costs but the fact that in many cases their techniques are superior. It is not the price of Japanese cars which ensures their competitiveness but the quality. It is not the price of video recorders which ensures Japanese dominance of the market but the fact that they are the only producers of video recorders. In particular, it is not the wage costs involved in Korean steel—wage costs are an extremely small proportion of the total cost—that have allowed the Koreans to steal markets from the US, but the quality of the steel that is produced. We have, therefore, the fear of the competitiveness of the Pacific rim. We should focus not on wage costs but on technique and skill. Investment in the labour force is a vital ingredient of technological superiority.

I suggest that the social protocol is a simple measure designed to protect individuals, yes, but especially to give them a stake in the system and to create a framework within which a high quality labour force can be developed.

As the noble Lord, Lord Cockfield, pointed out, in a period of change Bismarck saw how important it was to give the labour force a stake in the system. In providing that stake the social protocol is an assistance to competitiveness and not a barrier. It encourages the commitment of the labour force to technological change; it encourages the labour force to invest in itself; and it encourages change and progress. The social protocol can be part of a competitive recovery for Europe. It is not a threat to that competitiveness.

10.15 p.m.

Lord Harris of High Cross

Taking part in a debate at this hour recalls the schoolboy joke about the noble Lord who dreamed that he was making a speech in the House of Lords and woke up to find that he was. I have not partaken of any discussion in this Chamber at this hour and it is impossible to do justice to the many issues that have been raised.

I recall the winning way in which the noble Lord, Lord Richard, introduced these amendments. He described them as trivial, trifling matters in the Treaty of Rome, the Social Charter and successive statements which should not trouble us. He asked why the Government should oppose them? The exact reverse question is: why should we be so concerned about them if they are so trivial? I have the answer. I hesitate to deploy it because it may provoke the noble Lord, Lord Cockfield, into a further instructive disquisition. However, the answer that I have, I have from him.

At an earlier stage in the debate the noble Lord, rather uncharacteristically, harshly chastised the noble Baroness, Lady Thatcher. He said that she had caused all the trouble by signing the Stuttgart Declaration in 1983. He went through that declaration and remarked on how radical the noble Baroness had been to have assented to what is described as a "solemn declaration". He listed the great statements of the vision of a united Europe, social progress, political and monetary union and so on. He said that the noble Baroness should have understood that 1983 sealed our fate. I am paraphrasing his words. The noble Lord is part of the Euro-mafia which sees those matters more amiably than some of us can manage to do.

The noble Lord said that Maastricht was quite trivial and he asked what all the fuss was about. He kept extraordinarily calm, as he usually does. He said that it is merely dotting i's and crossing t's and that it does not amount to anything. The noble Lord, Lord Bruce of Donington, explained how Ministers often find documents in their boxes and they occasionally initial them without understanding fully what has been placed before them by their civil servants. However, the fact is—and this explains the often uncharacteristic depth of feeling that has now divided friend from friend in this wretched debate—that we have watched the story unfold since Stuttgart and before. We have seen the devious and slippery ways in which the Commission has taken advantage of certain words, terms and expressions in order progressively to create the sausages that the noble Lord, Lord Tebbit, keeps waving about.

From very general expressions about improving working conditions and developing and promoting various matters and so on, we get down to detail about hours of work, conditions of part-time working and all of that. We will shortly approach the proposal of a uniform European bedtime. That would be fair. We should have a level playing field. We should all pack up at the same time and not leave these industrious Germans and Italians to go on through the night.

The proponents of Maastricht really must understand that we are not merely tilting at these particular proposals, but we are full of fear and foreboding about the progressive, accelerating speed of development. Some Member of the Committee on the Government's side of the Chamber talked about the change in the mood at the Copenhagen summit which enabled our Prime Minister to return home without having been battered and bullied as the noble Baroness, Lady Thatcher, had been in the past. But still our man is isolated. He is still in a minority of one. The noble Baroness, Lady Thatcher, lost her job for being in a minority of one. It was said her bat was being broken. 'Who is breaking Mr. Major's bat, because he is still in a minority of one? The difficulty is that there is a totally conflicting vision not merely about Europe and the future but about the nature of competition and the nature of a market.

I only have time to touch on a couple of points because I do not see how anyone can get past the position of the noble Baroness, Lady O'Cathain, that social costs, non-wage employment costs, on her figures, are double in Germany and France what they are in this country. We are discussing labour costs per unit of output, other things being equal. The noble Lord, Lord Eatwell, referred to employment., investment, technology and training. Those latter aspects may be of help in some period ahead but here and now we are faced with loading those costs on to our production and we are not in a position to bear those costs and as the noble Lord, Lord Tebbit, said, we do not want that kind of decision to be made in a foreign land.

I have rehearsed my final thought many times and I wonder whether everyone will break into a respectful silence and say "Hear, hear". The greatest vehicle in history for the transformation of standards of living has not even been technology; it has been trade and commerce. Trade and commerce are the means by which all other contributors to efficiency and progress are transmitted around the world more quickly through competition and all the rest of it. Trade and commerce are the ways in which we can achieve these objectives of the social chapter and the Social Charter. The noble Lord, Lord Richard, referred to improved working conditions and higher standards of living. However, all he can think of is that the Government must achieve those aims and the Government must enforce better conditions. He believes the Government must take more power to do that.

The noble Lord, Lord Ewing, believes that standards of living are still on the edge of indigent poverty, but they have risen through the market. The market after all is not such a remarkable thing, it is people who have sought to benefit their own position and in the process have benefited the position of others. If we have a vote and it is held at a reasonable hour, I hope that we shall absolutely reject this nonsense from the noble Lord.

Earl Russell

The noble Lord, Lord Harris of High Cross, has a wonderful gift for exaggeration. He said it was so late at night he felt he was addressing the Chamber in his sleep. I must tell the noble Lord he has seen nothing yet. He has not taken part in the debates on the Education Bill. The latest time at which I have addressed this Chamber is twenty to nine in the morning. I am extremely glad not to be beating that record on this Bill.

I shall not deal with the noble Lord's other exaggerations, as it would take too long. I support this amendment and I support the social chapter with the same reservations as my noble friend Lord Rochester. It is not a perfect social chapter. In this world very few things are. However, we believe that it is much better to support it than not to do so.

I listened with great care to the very impressive speech of the noble Lord, Lord Cockfield. Listening to it, I was reminded of a story my father told of standing on the watershed between the St. Lawrence and the Mississippi. He said that it was flat ground so far as the eye could see, yet the water that fell on his left boot ran into the Gulf of Mexico and the water that fell on his right boot ran into the North Atlantic. The noble Lord, Lord Cockfield, and I are very close indeed, but the water that falls on the boot of the noble Lord, Lord Cockfield, will run into the Not-Content Lobby and the water that falls on my boot will fall into the Content Lobby.

There are arguments both of pragmatism and of principle. To me, one of the most important arguments is I believe, that we should accept existing treaty obligations. I agree with the noble Lord, Lord Richard, in his reading of Articles 117, 118a and 118b. I listened with great care to the noble Baroness, Lady O'Cathain. If the Committee will forgive a repetition, I was reminded of a passage from the Renton Report on the drafting of legislation, which I quoted in the Chamber yesterday, describing with the noble Lord's usual clarity the differences between the methods of British and European legislation. The noble Lord said that the key in understanding European legislation is to establish the intent. When one has the intent, the rest follows in explanation, clarification and interpretation. The intent of harmonisation is expressed in the Treaty of Rome. When I ask the Committee to accept that, I am not asking the noble Lord, Lord Tebbit, to accept any foreign law. I am asking him to accept the European Communities Act 1972 as passed by this Parliament.

There is the further obligation that under the general principle of the Single European Act we are bound to equal competition, in which there is a social dimension. The 48-hour directive comes under the health and safety provisions of the Single European Act. I accept that the Government have a doubt whether it properly belongs under the health and safety provisions. I ask the noble Baroness the Minister only one question on this. When the European Court comes to give judgment on this matter, will the Government undertake to accept the judgment of that court and to implement it?

I am surprised that it should cause so much concern whether the length of hours of work can properly come within health and safety. I had thought that that principle had been established when this Parliament passed the 10 hours Act in 1847. Exactly the same speeches were made then about the appalling burden on business costs and the disastrous consequences that would follow. But so far as I can see, they did not.

Under the principle of the single market, there has to be equal competition. I share, as does my noble friend Lady Williams of Crosby, the doubts of the noble Lord, Lord Tebbit, about what the European Court will do when asked to consider our position in the light of the doctrine of equal competition. I shall not use the phrase "level playing field". I cannot see how a party led by my right honourable friend the Member for Yeovil can possibly do that. I remember Yeovil Town's sloping pitch. I shall say that the whole of the single market rests on the principle of equal competition. I cannot see how we can accept that without accepting the social dimension in some form or other.

It is argued that the key point is acceptance that we compete within the global economy, and that we face competition from the Pacific rim and from other countries. That argument is true. But I shall also ask noble Lords opposite to agree that in accepting that argument as true we do not have to accept it as the end of the matter. It is not the only argument to be taken into account. I take the point that the noble Lord, Lord Cockfield, made about the need not to go too far in developing social policy. That is a powerful point. But it applies equally to the need not to go too far in the policy on which the Government have embarked of cutting labour costs.

We have said that we live in a global economy. In that global economy there has to be demand or there are no markets and there is no employment. The image that used to be used regularly a few years ago of the locomotive pulling the world economy has some force in it. If we take the power out of the locomotive, it does not matter how many cattle wagons we tie on at the back; the train will not move.

I believe, too, that attempting to lower one's social costs below those of one's competitors in the end becomes a form of protectionism. It is then open to all the objections which are usually made against protectionism: in effect, that it therefore reduces the total bulk of world trade; and that it therefore reduces the total size of the cake which we have to divide up. It is an argument which the Conservative Party has found familiar. I should like to ask the party to consider the argument in the circumstances.

I was very glad that the noble Lord, Lord Eatwell, said what he did about competition. Competition is not only in terms of price. Free marketeers much too easily think that it is. Competition is also in terms of quality. If we consider quality, I shall not at this time of night go into the question of trade. I shall only say that what my noble friend Lady Seear has "told us three times is true". Costs do not involve wage costs only. We have to think about health costs. My noble friend Lady Williams reminded us of that. Forcing wages down so that people may become ill may generate extra costs. Forcing them down so that people become dependent on benefits again may generate costs; and because those costs fall on the taxpayer they fall on all of us. That includes business.

I am very far from convinced that wage costs are the only costs that we have to take into account, or even necessarily that they are the biggest factor. In any case, we have accepted the principle already and we could not get out of it if we wished to do so.

10.30 p.m.

The Lord Bishop of Worcester

I am sorry that no one from these Benches has contributed anything during two days of great debate. Even at this eleventh hour I wish to speak. I cannot possibly represent the Church of England; no one man could do that. I am relieved that we are not expected to express any view other than our own.

The Earl of Onslow

That is subsidiarity.

The Lord Bishop of Worcester

Subsidiarity is a theological term.

When I attended the Committee this week I thought that I would vote against the amendment. First, I actually wish to see the bus moving. It is only when the vehicle moves that one is able to find out whether the gears work and one can then steer it. One cannot steer a stationary vehicle. Furthermore, I believe that we are European; we should be in Europe. We have fought many battles on the soil of Europe in the past. Now we have to fight them, not with cold steel, but with ideas, with battles of the mind, even with moral battles. Therefore I wanted to see this legislation go through.

Secondly, I was of the opinion, when Maastricht was first spoken of, that many of the Eleven voted for the social chapter without thinking about it. I have no interest in anyone voting for something merely for the sake of it and then ignoring it. Furthermore, I do not take a great deal of notice of anyone who says to me: "You've got to vote for this, all the others are doing so". That would be to do the right thing for the wrong reason. I also heeded the warning that, if we put up our social costs, we should be uncompetitive and British industry, which is at present going through a fragile and vulnerable emergence from the recession, would be knocked.

However, I am now of the opinion that, if this Chamber and the Government were to accept the social chapter, that would not involve a major re-run of the debate in Europe. I believe it would be accepted gladly and we should be able to go forward. Further, if other nations have voted for it mindlessly, without looking into it, how better to bring them to a further consideration of the social issues than by being there ourselves, involved in the debate, on all fours with the others?

There will be many debates and negotiations in the years ahead. There is no way in which we can work together in Europe as I believe we should, though in an uncertain world we have a common culture, a common faith and, to a certain extent, a common experience of democratic institutions. That is something which we might well preserve for the world. Let us be there to help do that. There will be minute particulars of which we must take account. I do not believe that accepting the social chapter will set matters in concrete. There are bound to be meetings and proper compromises.

Then there is the question of whether we can afford it. I go along with those who say, "There is not only one kind of cost". On every management course to which I go—and I go to quite a few—there is much talk of the importance in a company or institution of the good feeling, the achievement of participation and commitment among the members of that company or institution. Here I repeat, possibly as many times as the noble Baroness, Lady Seear, repeated a phrase which I had not heard before, self-interest often dictates that which justice demands. There is no way that we can rebuild the economic prowess and success—

Lord Vinson

Will the right reverend Prelate give way? I am sure he is deeply concerned about unemployment, but does he realise that a 10 per cent. increase on productivity costs could possibly, taking the nation as a whole, put another 100,000 people out of work? That would be the penalty for adopting the social chapter at the moment. Would that concern him?

The Lord Bishop of Worcester

I was glad to give way. Of course that concerns me, but I do not believe that we can rebuild an economy on cheap and under-rewarded labour. I agree with the noble Earl, Lord Russell, that the cost of that might be too great in trying to achieve success in the competitive markets.

With those thoughts in this fascinating debate, I conclude that not to pass the amendment would be to suggest all the wrong things, give all the wrong signals, and to indicate a curmudgeonly approach to the whole participation in Europe which I believe lies with the future.

Baroness Seear

I shall be very brief at this time of night; but I want to make one or two points that arise out of the issues which have been raised, and mention some points which have not been adequately raised, although the noble Lord, Lord Eatwell, touched on the issues which I believe are of primary consideration.

There is no doubt that countries of the European Community, including our own, will be up against very tough competition in the global economy of which we are now part. The competition will get tougher. The noble Lord, Lord Eatwell, implied that it had very little to do with labour costs. That is only partially true, as I believe the noble Lord knows. He must know that many companies nowadays send a great deal of their less skilled work overseas because the labour costs are lower. That is not something that we can afford to ignore. Europe will find it very difficult to hold its own.

The growth rates in China only last year were 12 per cent. in GNP. When that great country takes off, the competition that it will present to Europe as a whole will be enormously difficult to meet. That means that there must be very drastic economic cha:nges in all the European countries if we are to meet that competition.

I argued in favour of, and not against, the social policy. If one is to make drastic economic changes of the order that will be required, one will get acceptance for them only if the people who are involved in those changes—it will mean people having to change their jobs, losing their jobs and retraining for new jobs—see that for them there is something in the changes. If one is able to offer them social policies and policies of retraining on a very large scale, and if they can see that those policies offer hope and a future, then they will accept drastic economic changes.

We have not yet begun to contemplate the scale of the changes that will be necessary. Therefore we need good social policies, ones which will convince the people who will be affected that it is worth their while to go through all the pain of change in order to get advantage in the longer run.

We may ask whether those social policies will be the same as we are talking about at the present time. I believe it may well be that we shall have to allocate the resources that we have for those changes in rather different directions from those that we have taken in the past.

I went a very long way with what the noble Lord, Lord Cockfield, had to say. The noble Lord knows a great deal about the matter and his argument was very convincing. But at one point towards the end I completely part company from him. If these changes are to be effective, they have to be carried out on the basis of the Community working together. Of course the changes will be drastic. It is essential that we should be there taking part in the formulation of the new types of social policy that will be needed to meet the new economic challenges.

Noble Lords

Hear, hear.

10.45 p.m.

Baroness Chalker of Wallasey

Amendment No. 428, put down by the Labour Front Bench, as we know, seeks to amend Clause 7 of the Bill—the clause which my noble friend Lord Tebbit would like to see be deleted from the Bill. We accept that clause is the result of a new clause put forward by the Opposition during the Committee stage in another place. We shall come in a few moments to the questions that the noble Lord, Lord Tebbit, asked.

It was the requirement to consider the question of adopting the protocol on social policy that requires us to come to a resolution on a Motion before the Act enters into force. The reason that the Government accepted that new clause was not that we were afraid to debate the issues. We are debating them now, and we shall debate them again. We are confident that a majority in both Chambers favours Britain's opt-out from the social agreement. If we joined it, the social agreement would do a number of very serious things. It would transfer more power from Westminster to Brussels. I believe that it would price British workers out of jobs, as the noble Lord, Lord Kilmarnock, intimated, and it would make Europe as a whole less competitive. If there were no reasons other than those three, they would be the grounds on which we should have our opt-out from the social agreement. It will do nothing to help solve the unemployment to which many noble Lords pointed on Second Reading as one of the greatest challenges facing Europe.

The Labour amendment would require a government Minister to table a Motion abandoning the opt-out. We have no intention of doing so. It is already open to the Opposition to table an amendment to the Motion that the Government put forward under Section 7 (as it would be post Royal Assent) as it currently stands. I understand that a Labour spokesman in another place made it quite clear that they intended to do that.

The United Kingdom's opt-out contained in the social protocol is in any case an integral part of the treaty. That treaty has already been ratified by 10 of our partners. An amendment of this kind has no place in the Bill because it tries to prejudge future negotiations not consequential upon the present treaty. It is therefore outside the purpose of the Bill as stated in the Long Title, which may well be why similar amendments tabled in another place were not selected for debate. The change should not be made.

Clause 7 already gives both Houses of Parliament the opportunity to debate the social protocol. I am sure that we shall be doing that before long.

Perhaps I may say to my noble friend Lord Tebbit, who has notified the Committee of his intention to oppose the Motion that Clause 7 stand part of the Bill, that as it stands Clause 7 is a commencement provision. Instead of coming into force the day that the Bill receives Royal Assent, it is to come into force only when each House of Parliament has come to a resolution on a Motion considering the question of adopting the protocol on social policy. As I said, the Government accepted the clause because they recognised that the other place wanted to hold a further debate on the social protocol. They are therefore prepared to see the inclusion of this clause in the Bill.

I turn to what my noble friend Lord Tebbit called his 64,000 dollar question. He asked whether the social chapter opt-out was vital in the national interest. I remind him that at Maastricht my right honourable friend the Prime Minister took the view that we could not sign up to the social chapter that the other 11 members wanted.

My noble friend asked what the Government would do after the Clause 7 votes. Was opting out of the social chapter a vital national interest? I have to tell him that the Government are confident that there is a majority in both Chambers in favour of our opt-out, as I said a few moments ago. Therefore, the question that he posed does not arise. I shall not speculate, as he tried to tempt me to do, about his wrecking tactics.

I should like to turn to some of the many excellent contributions made in the debate. But perhaps I should deal with the proposer of Amendment No. 428 before I deal with anyone else. I give way to my noble friend.

Lord Tebbit

I am grateful to my noble friend for giving way. I am at a slight loss to understand quite how a proposition to do in this Chamber what the Government wanted to do in the other place, but ran away from doing because they did not believe that they could carry the vote, would be an act of wrecking. It would be an act of kindness—not wrecking.

Baroness Chalker of Wallasey

My noble friend sorely tempts me to enter into a wider debate with him, but because of the lateness of the hour I shall not do so. However, there will surely come a time when my noble friend might get rather more than he bargained for.

In proposing the amendment the noble Lord, Lord Richard, quoted extensively from the social agreement. However. I noticed that he did not mention Articles 3 and 4. He also asked me a number of questions. The agreement of the 11 to the social agreement allows for a wide range of legislation in social affairs by qualified majority voting. That is contained in Article 4, to which he did not refer. The potential cost of that may be substantial, as was pointed out by the noble Lord, Lord Kilmarnock, and the noble Baroness, Lady O'Cathain.

It is impossible to predict what proposals are likely to come forward under that agreement, but perhaps I can take some of the potentials. The following is merely an illustrative list of a few improvements in particular of the working environment to protect workers' health and safety. That provision goes beyond the limits of minimum standards for health and safety of workers to include, perhaps, facilities for the welfare of workers. The working conditions go into working patterns, minimum paid annual leave, parental leave and special leave. They continue into atypical work, pro rata access to all terms and conditions of employment for part-time, temporary and fixed term workers.

It is easy enough to ask, as the noble Lord, Lord Richard, did: are we against good working conditions'? But there are matters, as many Members of the Committee have said tonight, that should be decided at national level. European-level agreements in areas such as these social areas are likely to put up our labour costs and increase labour market inflexibility. That means, as my noble friend Lord Vinson said in his interjection, putting people out of work. We already know that Europe's competitiveness is declining against the United States and the Far East. The last thing we should do—and that was the point of the debate at the Copenhagen summit—is to accelerate the process. That would be not only thoroughly unwise, but it would set a pattern which I do not believe the Community, for all its sensible policies (of which there are many), would be able to arrest.

The noble Lord, Lord Richard, asked also how the United Kingdom would be able to participate in the EC social affairs activity. I can tell him. We will continue to participate in the activity in the social field under the Treaty of Rome. We remain committed to a sensible policy in this area; for example, a sensible policy in the area of health and safety. And we expect the Commission to continue to bring forward proposals for legislation by the 12. But the social agreement allows the 11 to go further, if they so choose, on a qualified majority voting basis.

We agreed to the 11 using the institutions of the Community when they discuss the measures brought forward under the agreement between the 11. It will be obvious whether or not a measure is being brought forward under the Treaty of Rome in which we are involved, or under the agreement in which we are not, because the measure would say so. It would cite as its legal base an article of the agreement of the 11, if that is what it came under, rather than an article of the treaty.

The noble Lord, Lord Kilmarnock, said that the protocol might not stand up to challenge but it is still better than nothing. I took a note rather quickly, but I think those were his words. I have no reason to think that the protocol will not be effective. But I agree with him that even if it proved not to be a complete shield, the protocol would be worth having. As my noble friend the Foreign Secretary put it in another place: just because a burglar may climb over your fence, that is no reason to open your gate to him.

The noble Baroness, Lady O'Cathain, referred to the concerns of business about excessive social legislation. I shall never forget that when I was a Member of another place the trade unionists in one of my local factories came to me and begged me to fight against the social protocol because of what it would do to their work and their opportunities for working. That is the story one hears when one talks in simple straightforward terms about the social. protocol to workforce after workforce. This Government's decision has been wholeheartedly supported by the CBI throughout British industry. The President of UNICE, Mr. Carlos Ferrer, referred to the working time directive along with the other social policy measures currently before the Council. He said: It seems very wrong—especially al a time of high unemployment—to be pressing forward with such measures which will destroy jobs and bring virtually no benefits in return". He went on to call for some negative action. It was an appeal from the heart, on behalf of the millions of companies which UNICE represents. He said we should, stop taking measures which unnecessarily destroy jobs". He went on to list those. He said that it was time the truth were told about the directive—the directive which disregards subsidiarity; the "top-down" measure from Brussels for rigid application in the four corners of Europe. He noted that it took no account whatever of the views of companies nor of existing practice. He said that it would not improve information and consultation of workers; rather, it would damage existing systems. He said that, above all, it would reduce competitiveness by seriously delaying the freedom of companies to take vital decisions in good time.

There is much more that one can say cif this. But the most important question is: are we doing what is right for growth in this country and employment in this country? Were we to accept the amendment of the noble Lord, Lord Richard, we would not do so.

The noble Earl, Lord Russell, winding up for the. Liberal Democrats, used the phrase, "In legislation, intent is all". That is not so. It makes a great difference what legislative powers are given to carry out that intent. That is exactly why the Prime Minister chose to draw the dividing line and say that this is a protocol we cannot accept.

We have had a long debate. The hour is late. Clause 7 as it stands will provide the opportunity for both Houses of Parliament to hold another debate and vote on these issues. At the same time Amendment No. 428 would only serve to cause unnecessary complication. In fact, it would do us no good in our obligation to this nation, which is not only to get people back to work as quickly as possible but to make sure that vie do not put unnecessary barriers in the face of people seeking to provide employment as well as those who want it. If the amendment is pressed to a vote, I urge the Committee to reject it because it is in the best interests of Britain that it should be so rejected.

Lord Richard

I shall be extremely brief at this hour of the night. I wish to make but three points. Perhaps I may say to the noble Baroness, Lady Chalker, that her representation of the social chapter was a travesty of the wording of the treaty and that her flesh-creeping as to how it would come out was overdrawn, exaggerated and inaccurate.

I wish to take up two points on the speech of the noble Baroness, Lady O'Cathain. She chided me with the fact that I had not quoted part of the Treaty of Maastricht and she said that the wording in Maastricht was worse than the wording in the Treaty of Rome. I have to tell her that she is wrong. I do not want to spend a lot of time going through it tonight but perhaps she would be kind enough, in the still wee hours of the night when we are all sitting up poring over our Maastricht Treaty at three in the morning because we cannot sleep for worrying about the effects of the social charter on production costs in the United Kingdom, to look at the wording that she quoted and compare it with the equivalent in the Treaty of Rome. She will find that not only are they virtually identical, but that Maastricht is actually weaker than the Treaty of Rome. In that treaty it says that the Council "shall" produce directives, but in the Maastricht Treaty it states that the Council "may".

There is one major difference in which Maastricht is actually a step back from the position contained in the Treaty of Rome. It is not a step back which I particularly enjoy, but since we are being textual about this—as we should be about these very important treaties—we should get them right.

Secondly, the noble Baroness, Lady O'Cathain, talked about the non-wage costs. The figures that she gave prompted me at least to ask one question: if our non-wage costs are so much better than those of Germany, why is Germany doing so much better than we are?

Noble Lords

They are not!

Lord Richard

Over the past 25 to 30 years and under successive administrations, is it seriously being argued that the German economic performance has not been better than ours? Could it be—

The Earl of Onslow

Will the noble Lord give way?

Lord Richard

No. We should come to a conclusion on this debate. Could it be perhaps that the Germans have a better trained and more highly skilled workforce than we have; that they have greater technological investment in their industrial processes and that they have perhaps a better informed and better consulted workforce? Dare one say in this Chamber that perhaps they might even have better management?

The last point I wish to make concerns the noble Lord, Lord Cockfield. He made a speech in which he marginally came down in favour of the opt-out. That seemed to run counter to almost everything else that he has said in relation to this treaty. His theme, and that of many other noble Lords in this Chamber who have been in favour of it, has been that if one wants to influence the way in which the Community is moving one has to be involved in the discussions which are taking place. On the one issue alone where that is focused; namely, in the social chapter, the noble Lord feels that perhaps the Government are marginally right to persist in their opt-out.

I say to the noble Lord, Lord Cockfield, that he put his argument with great skill, but his conclusion lacked the conviction that his conclusions usually have. We have come to the end of this debate and I do not propose to take up any more time on it. The issue is simple: do we want this country to sign the social chapter and participate in European social policy or do we not? For our part and that of the party which I represent in this Chamber, we want this country to participate in the formation of European social policy.

11.2 p.m.

On Question, Whether the said amendment (No. 428) shall be agreed to?

Their Lordships divided: Contents, 63; Not-Contents, 129.

Division No. 1
CONTENTS
Archer of Sandwell, L.	Mclntosh of Haringey, L.
Ardwick, L.	Mallalieu, B.
Barnett, L.	Merlyn-Rees, L.
Blackstone, B.	Milner of Leeds, L.
Blease, L.	Monkswell, L.
Brooks of Tremorfa, L.	Morris of Castle Morris, L. [Teller.]
Carmichael of Kelvingrove, L.
Carter, L.	Murray of Epping Forest, L.
Castle of Blackburn, B.	Nicol, B.
Cledwyn of Penrhos, L.	Peston, L.
Clinton-Davis, L.	Pitt of Hampstead, L.
David, B.	Plant of Highfield, L.
Dean of Beswick, L.	Rea, L.
Desai, L.	Richard, L.
Dormand of Easington, L.	Rochester, L.
Eatwell, L.	Rodgers of Quarry Bank, L.
Ewing of Kirkford, L.	Russell, E.
Gallacher, L.	Seear, B.
Gladwyn, L.	Sefton of Garston, L.
Graham of Edmonton, L. [Teller.]	Serota, B.
	Shackleton, L.
Gregson, L.	Shepherd, L.
Healey, L.	Strabolgi, L.
Hollick, L.	Taylor of Blackburn, L.
Hollis of Heigham, B.	Tordoff, L.
Howell, L.	Turner of Camden, B.
Howie of Troon, L.	Varley, L.
Hylton, L.	Williams of Crosby, B.
Jay, L.	Williams of Elvel, L.
Judd, L.	Williams of Mostyn, L.
Longford, E.	Winchilsea and Nottingham,
Lovell-Davis, L.	Worcester, Bp.
McCarthy, L.

NOT-CONTENTS
Aberdare, L.	Bruntisfield, L.
Ackner, L.	Burton, L.
Aldington, L.	Butterworth, L.
Alexander of Weedon, L.	Caithness, E.
Annaly, L.	Campbell of Alloway, L.
Archer of Weston-Super-Mare, L.	Campbell of Croy, L.
	Carnegy of Lour, B.
Arran, E.	Carr of Hadley, L.
Astor, V.	Chalker of Wallasey, B.
Astor of Hever, L.	Clanwilliam, E.
Attlee, E.	Clark of Kempston, L
Barber, L.	Cockfield, L.
Belstead, L.	Coleraine, L.
Blatch, B.	Colnbrook, L.
Blyth, L.	Colville of Culross, V.
Brabazon of Tara, L.	Cranborne, V.
Braine of Wheatley, L.	Crickhowell, L.
Brightman, L.	Cumberlege, B.
Brougham and Vaux, L.	Darcy (de Knayth), B.

Denham, L.	Murton of Lindisfarne, L.
Denton of Wakefield, B.	O'Cathain, B.
Dudley, E.	Oppenheim-Barnes, B.
Elles, B.	Orr-Ewing, L.
Elliott of Morpeth, L.	Oxfuird, V.
Elton, L.	Park of Monmouth, B.
Faithfull, B.	Pender, L.
Ferrers, E.	Perry of Southwark, B.
Flather, B.	Platt of Writtle, B.
Foley. L.	Plumb, L.
Fraser of Carmyllie, L.	Prentice, L.
Gardner of Parkes, B.	Prior, L.
Gilmour of Craigmillar, L.	Pym, L.
Gisborough, L.	Raglan, L.
Goschen, V.	Reay, L.
Hacking, L.	Rennell, L.
Hailsham of Saint Marylebone, L.	Renton, L.
	Rippon of Hexham, L.
Harmar-Nicholls, L.	Rodger of Earlsferry, L.
Harmsworth, L.	St. Davids, V.
Hayhoe, L.	Seccombe, B.
Henley, L.	Selborne, E.
Hesketh, L.[Teller.]	Sharples, B.
Hives, L.	Sherfield, L.
HolmPatrick, L.	Simon of Glaisdale, L.
Hooper, B.	Skelmersdale, L.
Howe, E.	Slynn of Hadley, L.
Howe of Aberavon, L	Stewartby, L.
Jellicoe, E.	Stodart of Leaston, L.
Johnston of Rockport, L.	Strathclyde, L.
Kilmarnock, L.	Strathmore and Kinghome, E. [Teller.]
Kimball, L.
Kintore, E.	Swinton, E.
Lawrence, L.	Thatcher, B.
Long, V.	Thomas of Gwydir, L.
Lucas, L.	Trefgarne, L.
Lucas of Chilworth, L.	Trumpington, B.
McColl of Dulwich, L.	Ullswater, V.
Mackay of Ardbrecknish, L.	Vinson, L.
Mackay of Clashfern, L. [Lord Chancellor.]	Wakeham, L. [Lord Privy Seal.]
Macleod of Borve, B.	Waverley, V.
Mancroft, L.	Weatherill, L.
Marlesford, L.	Whitelaw, V.
Masham of Ilton, B.	Wise, L.
Monk Bretton, L.	Wolfson, L.
Montgomery of Alamcin, V.	Wynford, L.
Mottistone, L.	Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

11.11 p.m.

On Question, Whether Clause 7 shall stand part of the Bill?

Their Lordships divided: Contents, 156; Not-Contents,16.

Division No. 2
CONTENTS
Aberdare, L.	Bruntisfield, L.
Ackner, L.	Burton, L.
Addington, L.	Butterworth, L.
Aldington, L.	Caithness, E.
Alexander of Weedon, L.	Campbell of Alloway, L
Annaly, L.	Campbell of Croy, L.
Ardwick, L.	Carnegy of Lour, B.
Arran, E.	Carr of Hadley, L.
Astor, V.	Carter, L.
Astor of Hever, L.	Chalker of Wallasey, B.
Attlee, E.	Clanwilliam, E.
Barber, L.	Clark of Kempston, L
Belstead, L.	Cledwyn of Penrhos, L.
Blackstone, B.	Clinton-Davis, L.
Blatch, B.	Cockfield, L.
Blyth. L.	Coleraine, L.
Brabazon of Tara, L.	Colnbrook, L.
Braine of Wheatley, L.	Colville of Culross, V.
Brightman, L.	Cranborne, V.
Brougham and Vaux, L.	Crickhowell, L.

Cumberlege, B.	Mottistone, L.
Darcy (de Knayth), B.	Murton of Lindisfarne, L.
David, B.	Nicol, B.
Dean of Beswick, L.	O'Cathain, B.
Denham, L.	Oppenheim-Barnes, B.
Denton of Wakefield, B.	Orr-Ewing, L.
Desai, L.	Oxfuird, V.
Dormand of Easington, L.	Park of Monmouth, B.
Dudley, E.	Pender, L.
Eatwell, L.	Perry of Southwark, B.
Elles, B.	Peston, L.
Elliott of Morpeth, L.	Pitt of Hampstead, L
Elton, L.	Platt of Writtle, B.
Faithfull, B.	Plumb, L.
Ferrers, E.	Prentice, L.
Flather, B.	Prior, L.
Foley, L.	Pym, L.
Fraser of Carmyllie, L.	Reay, L.
Gardner of Parkes, B.	Rennell, L.
Gilmour of Craigmillar, L.	Renton, L.
Gisborough, L.	Richard, L.
Goschen, V.	Rippon of Hexham, L.
Graham of Edmonton, L.	Rochester, L.
Hacking, L.	Rodger of Earlsferry, L.
Hailsham of Saint Marylebone, L.	Rodgers of Quarry Bank, L.
	Russell, E.
Harmsworth, L.	St. Davids, V.
Hayhoe, L.	Seccombe, B.
Henley, L.	Seear, B.
Hesketh, L. [Teller.]	Selborne, E.
Hollick, L.	Sharpies, B.
Hollis of Heigham, B.	Sherfield, L.
HolmPatrick, L.	Simon of Glaisdale, L.
Hooper, B.	Slynn of Hadley L.
Howe, E.	Stewartby, L.
Howe of Aberavon, L.	Stodart of Leaston, L.
Howell, L.	Strathclyde, L.
Howie of Troon, L.	Strathmore and Kinghorne, E. [Teller.]
Hylton, L.
Jellicoe, E.	Swinton, E.
Johnston of Rockport, L.	Taylor of Blackburn, L.
Kilmarnock, L.	Thatcher, B.
Kimball, L.	Thomas of Gwydir, L.
Lawrence, L.	Thomas of Swynnerton, L.
Long, V.	Tordoff, L.
Lovell-Davis, L.	Trefgarne, L.
Lucas, L.	Trumpington B.
Lucas of Chilworth, L.	Turner of Camden, B.
McColl of Dulwich, L.	Ullswater, V.
Mclntosh of Haringey, L.	Wakeham, L. [Lord Privy Seal.]
Mackay of Ardbrecknish, L.
Mackay of Clashfern, L. [Lord Chancellor.]	Waverley, V.
	Weatherill, L.
Macleod of Borve, B.	Whitelaw, V.
Mancroft, L.	Williams of Crosby, B.
Marlesford, L.	Winchilsea and Nottingham, E.
Masham of Ilton, B.	Wise, L.
Monk Bretton, L.	Wolfson, L.
Montgomery of Alamein, V.	Wynford, L.
Morris of Castle Morris, L.	Young, B.

NOT-CONTENTS
Belhaven and Stenton, L.	Onslow, E.
Beloff, L.	Pearson of Rannoch, L.
Bruce of Donington, L. [Teller.]	Skelmersdale, L.
	Stoddart of Swindon, L.
Hamilton of Dalzell, L.	Swinfen, L. [Teller.]
Hardinge of Penshurst, L.	Tebbit, L.
Harris of High Cross, L.	Vinson, L.
Monson, L.	Willoughby de Broke, L.
Morris, L.

Resolved in the affirmative, and Clause 7 agreed to accordingly.

[Amendments Nos. 429 and 430 not moved.]

Clause 8 agreed to.

House resumed: Bill reported without amendment.