European Union: UK Presidency

HL Deb 09 March 2005 vol 670 cc774-815

5.22 p.m.

Lord Dykes

rose to call attention to the forthcoming United Kingdom presidency of the Council of the European Union from 1 July 2005; and to move for Papers.

The noble Lord said: My Lords, I begin by expressing my gratitude for the chance of raising this subject this afternoon. I hope that the debate will be as fulfilling and gripping as the previous one. I am most grateful to all noble Lords for taking part. I believe that the UK presidency period from 1 July this year until the end of the year will provide special opportunities for this country and this government to seize the moment in, unfortunately, a dauntingly growing European Union agenda.

Indeed, this is one of the problems facing everyone in the European Community from now on. The inevitably lengthening agenda and the natural growth in the inputs—often understandably demanding of the 10 new states, although they are a small total addition to gross domestic product—means more and more work by the relevant presidency period national administrations and civil servants and their foreign departments in the Council of Ministers to keep up with all the items on this lengthy list.

The external threat of terrorism, for ever prevalent, has also added hugely to the overall workload. For example, yesterday and today, regarding the stability and growth pact, extremely heavy and deep agendas prevail. That is why I personally felt that it was a good idea to launch this large debate well before 1 July. There is much to think about.

In the spirit of the work being done, I first pay the warmest of tributes to the Government of the Grand Duchy of Luxembourg for their robust energy in tackling huge agendas with the tiniest of the EU's administrative apparatus—apart from Malta, I suppose. They are only nearly half-way through an onerous period and have juggled skilfully with a rolling and sometimes elusive agenda. It is an impressive country indeed, when someone jokingly said that the informal definition of real poverty there was owning two small Mercedes. I believe it is the 11th time that they have handled the presidency, which, when it first started, was a small agenda by present day standards.

This secular growth in the items to be considered by an ever-growing European Union reflects also the facts of the EU coming more into the world outside, due not only to emergencies, such as 9/11 and after, but also to a deeper relationship arising with both the United States of America and with all other continents, including Asia and China—although perhaps not enough with South America, for some reason; but elsewhere, the growth is spectacular.

Luxembourg is rightly attaching high priority to the mid-term review of the Lisbon process for greater Union efficiency and productivity, competitiveness and flexible open markets. I note that the UK Government will pick up these cudgels enthusiastically later this year, armed with the Commission's orientation report. On page 9, paragraph 19 of the update document last September, Her Majesty's Government emphasised that since 70 per cent of modern European Union total gross domestic product is now represented by services of all kinds, rather than the old manufacturing or extractive activities, this must be a priority for opening up markets, with the services legislation needed still, since only 20 per cent—would one believe—of trade between member states is so represented.

Perhaps the Minister can confirm that I am right to say that the European Commission has had another look at the services directive legislation, due to various points that have been put by the member states and, therefore, that we must wait a little longer for the text.

Huge work is still needed in the financial sector. That is also a practical reason why the Government should not delay any longer in joining an increasingly successful and internationally relevant euro. The Government will say that their hands are full with many other more pressing matters. But the single currency is already turning into a stupendous and unbeatable piece of fundamental deregulation. It should bring tears of gratitude to the most flinty of Hayekian fanatics that this deregulation is the best of all. But they do not see it that way in this country and elsewhere, for some bizarre reason.

However, as President Chirac reminded us all during his official visit to London on 18 November last year, and to this House where the ceremony took place at the end of the day, to celebrate the entente cordiale anniversary, an economically more dynamic Union must go hand in hand with Europe's traditional attachment to, I quote his words, "its own social model". I believe that the public here needs more guidance on the huge advantages of the Rhineland model of socio-economic balance, which tragically the USA does not possess in any shape or form. In her kind reply to me of 21 February, the noble Baroness, Lady Symons, the Minister, emphasised Her Majesty's Government's strong support for the Lisbon "mark two", post-Wim Kok review phase, of widening and deepening the single market, through full implementation of existing liberalisation measures, as well as new initiatives". I am still waiting for the Government to follow up by energetic efforts to tackle the residual examples of cartel and restrictive practices that remain in the UK and cite such examples to us. We can then get away from the wonderful fantasy notion that prevails in some of the consumer comics called newspapers in Britain, that we do not have any such naughty practices; only wicked continental countries, of course, have them.

Meanwhile, I congratulate the present Government on offering us last month Command Paper 6450 on prospects for the EU this year and their many plans for the presidency from 1 July onwards.

Apart from the sad examples of bizarre shyness over the euro, the European monetary system and the need for the Government to promote the EU constitution hard—presumably after the election—I contrast the positive tone of most of the ideas in the White Paper with the reactionary, curmudgeonly, chauvinistic, narrow-minded and plain hostile notions contained in many such White Papers in the still painfully remembered period of Tory governments, eight years ago and more. Yes, we still remember the dark period of recent British political history. Manifestly. the UK has returned, under the Prime Minister's enthusiastic banner, to being European-friendly at last. I am grateful for that, as I hope other noble Lords are.

I also very much congratulate the Foreign Secretary on his enlightened approach, despite an horrendous personal schedule of meetings worldwide. In his introduction to the White Paper, Jack Straw expressed the hope that such reports would, stimulate the closer and deeper involvement of all parliamentarians as well as the British public in European Union affairs". The huge practical difficulty is, of course, the sheer length and complexity of this agenda. So I shall focus on only a few key priorities today to give other noble Lords the chance to speak, and I hope that it will not be too late in the day.

There will be some 40-plus Council meetings, including the informal meetings at senior level. plus action plan meetings and the rest, and so a hectic time will be had in the British presidency after 1 July.

From the continuation of the multi-annual strategic programme, concluding, as is intended, with the second presidency period next year under Finland, to the new burdens of the security and weapons of mass destruction strategy now being clamped on an already overcrowded agenda, I have to ask the Minister who is to reply today whether he is confident that every priority will be taken forward. I genuinely have the impression that the "super troika" system is now getting smoother and smoother as more national officials in member states are drafted into the processes. Even Justus Lipsius is apparently getting more used to the continuity work that is needed. But it would be frustrating if disutilities started to creep in to cause the inevitable postponement of some fairly urgent agendas. I believe that one such example is the need for the deepest of common agricultural policy reforms. The Council is always hinting at that but never really properly delivers it.

The abandonment—literally—of the current extravagant and anti-third-world support system of farm produce subvention in Europe is surely unavoidable now, even if the details will take time to work out. This has to be done anyway to accommodate the needs of many of the 10 new members who will require genuine support, perhaps beyond the initial transitional period. At the same time, the US and Japan should also modernise and reduce their own outrageously expensive systems of farm support, which are often worse than the European examples. That is rarely mentioned in the British press.

Lest people in the United Kingdom naively think that we are exempt from such radical prescriptions, we, too, must accept alternative land use rather than endless overproduction. I was pleased to see the recent enthusiasm of farmers for the new ecology measures of the European Commission.

The main themes of the European presidency are, as we know, the fairly bland-sounding notions of security, prosperity and sustainability—not exactly an election manifesto phrase. But they are all more complicated than we may think at first glance. Paragraph 4 on page 3 of the White Paper assures us that climate change will be kept high on the agenda. Perhaps I may ask the Minister and the Government whether the US is now beginning to show a more responsible attitude to this and related matters, pressed by the European Union, I hope.

But just in case that notion makes us feel smug, perhaps I may also ask the Minister, when he replies, to remind us just how many opt-outs we in Britain now have in the current Union compared with other leading, large-population countries. I hope that the answer is "not too many", when apparently we are so keen to say how crucial—and, ironically, absolutely necessary—integration and qualified majority voting are in all single market legislative processes.

Personally, I welcome very much the proposal for a European Grand Committee, referred to in the White Paper, to bring all the scrutiny activities into a modern setting in our two Houses—subject, of course, to the elaboration of further details and the ideas of the two Houses. I note the presence of the distinguished chairman of the European Committee here today. After all, this is mainly a parliamentary matter, with the Government presumably supporting from behind.

Turning to the constitution and the present Bill, I hope that HMG will take strenuous steps, even to some extent, in our forthcoming national election campaign—would I be reasonable to expect something at least?—to rebut and refute some of the rubbish put forward by the anti-EU Neanderthal element in United Kingdom society, and some of the newspapers, which I shall not mention now, about the effects of this remarkable and comprehensive new treaty. It is, after all, the codification and co-ordination of all the previous treaties, right back to the Treaty of Rome, and it also reaches into some important new areas. I suppose that in many ways some of its proposals are very modest and cautious.

So we know that the new constitution is not a "national" one in any way. It does not undermine us in this sovereign British state. We know that it does not give the power to levy new taxes on the UK; we know that our existing opt-outs are not affected; and, of course, we know that the monarchy is totally unscathed by all those suggestions.

Sometimes I so admire the more modern attitudes of some other major countries towards these areas. After all, Spain, too, is an ancient kingdom with 1,000 years of fascinating history—indeed, in effect, is that not true of all of us in Europe? But it was good to see the King and Queen of Spain voting in the referendum polling booth in Madrid on 20 February.

In the raging arguments about the European Union's budget and the financial perspectives for 2007–13, perhaps I may also make the point that the wrangling between 1 per cent, as proposed by the EU five or six, including ourselves, and 1.14 per cent, as proposed by the Commission—some people still stay with the old 1.27 per cent idea—is perhaps less crucial than a sensible compromise agreement when the Commission is grappling with a larger spread of financial commitments. As usual, those commitments have come about as a result of the increasing demands imposed by the burdens of new policy, often put forward first by—guess who?—yes, the member governments themselves.

The security and WMD programme is a good example of that kind of thing. Meanwhile, real tangible cuts in excessive farm support would, in a very few years, provide in part money for alternative policy programmes. It really is essential for the UK Government, if possible, to adhere to the June 2005 date with Luxembourg for the deadline of the political agreement on future financing. That will add considerable practical benefits for the UK in its own presidency period.

By the way, does the Minister expect the full agreement on the Capital Requirements Directive (CAD 3) under the Financial Services Action Plan to he achieved under the UK presidency? If time were available, I would ask many other questions but I shall not inflict those on the House except, in broader geostrategic terms, to express the hope that, after President Bush's recent visit to the European institutions, countries and peoples, the relationship is now based on total equality between the two entities—the EU and the US—and it is not simply the case that we are taking on some of its suggestions.

I suppose that, leaving aside the vital work of EU3 vis-À-vis Iran, the Council of Ministers' foreign policy agenda in terms of broad strategic objectives can be expressed in the following areas: the repair work on EU-US relations, which I have just mentioned; standing up to Russia and stabilising the Balkans; energetic work on the Middle East road map; the fulfilment of the millennium goals; new links with the People's Republic of China; and achieving effective true multilateralism—not an American hegemony—in the new United Nations.

With the Union's new confidence, I believe that those are all realistic aims. I also hope very much that the work needed on the security strategy of the Union and WMD will be carried forward energetically. It must surely be important for the European Union to develop these themes. It must do so as a result of the Thessaloniki decisions. I feel that it needs to avoid unnecessary duplication by liaison with NATO and the UN, but also, a little paradoxically, that it needs to ensure that the budget resources are put up when the decisions are taken forward. Surely it will be essential to resolve the ongoing struggle by the High Representative's WMD spokesperson against the Commission's own WMD unit, which is starved of funds for any serious work.

I could, of course, have gone on with a vast list of points, but relative brevity, even with major matters of policy, remains the highest virtue. After all, there is presumably always the next opportunity, especially in a sensibly administered House such as this one. I beg to move for Papers.

5.38 p.m.

Baroness Royall of Blaisdon

My Lords, I welcome this debate on the forthcoming United Kingdom presidency of the European Union, and I am grateful to the noble Lord, Lord Dykes, for calling attention to this important issue.

The opportunity for shaping the agenda during a presidency is often trumpeted but, in reality, it is limited. However, it is a great opportunity to highlight European issues that are of specific importance to the UK and to raise general awareness about the EU and its policies. The presidency must rightly work within the framework of the EU's 2004–06 multi-annual strategic programme and the more recently agreed strategic objectives for 2005–09, both of which it helped to shape with its partners in the European Council, the European Parliament and the Commission. Such continuity was important for a Union of 15 member states, but it is absolutely essential for an efficient and effective Union of 25. That is why I welcome the provisions in the constitutional treaty for a full-time President of the European Council and teams of three member countries holding the presidency collectively for periods of 18 months.

As the noble Lord, Lord Dykes, pointed out, the list of issues to be addressed by the UK presidency is vast, and so I will focus on just three. First, there is the need to put Europe back on the path to long-term prosperity. The European Union is unique, and it has been and is a huge success. It has enabled an increasing number of countries to work together in partnership to bring peace, stability and prosperity to its citizens. However, enlargement, globalisation and demographics have brought new economic challenges. If we do not rise to meet these challenges, we will not be able to maintain our distinctive model of society, with its welfare, education and health systems. The status quo is not an option if we want greater social justice.

The high expectations raised when the heads of state and government of the European Union met in Lisbon in 2000 and launched a series of ambitious reforms at national and European level have not been properly met. In many ways, the reform package was too complex. The Commission blamed member states for lack of progress and commitment to the process. Member states blamed the Commission. The reality is that political leadership and commitment are needed at both European and national levels to bring about higher growth.

Following the excellent Kok report, both the Commission and the Council have reassessed the Lisbon strategy, and the spring European Council will agree a new partnership for growth and jobs. Launched under the current Luxembourg presidency, it is the UK presidency that must drive this new strategy to unleash Europe's real economic potential. Economic reform and boosting jobs and growth throughout the EU are absolute necessities if we are to remain competitive in the face of ever-increasing challenges from countries such as India and China, as well as to improve people's lives and well-being in an ageing society. Our economic prosperity is also, I believe, inextricably linked with the stability of the Union that the recent enlargement has helped to consolidate.

Thanks to the Chancellor's effective economic management, Britain is an economic success, with solid growth, low inflation and high levels of employment. The UK, during its presidency, is well placed to lead on a European growth plan. As we do so, however, we should heed and learn from the often-ignored economic successes of some of our partners. No member state has all of the solutions, and we have to learn from each other's best and worst practice. Germany has sluggish growth and very high unemployment, partially due to the economic burden it has carried since reunification. According to the OECD, however, when it comes to measuring productivity, 11 of the pre-enlargement 15 member states have higher productivity levels than we do.

Urgent action is needed in each of our 25 countries in order to halt economic decline and to ensure sustainable economic development. I know that the Government well understood the importance of the Lisbon agenda, and were frustrated by its lack of progress. I would be grateful if my noble friend the Minister could assure me that, during the UK presidency, the Government will do their utmost to pursue the new growth plan, encouraging all member states and the European Commission to co-operate more closely in delivering the often painful reforms. Individual member countries cannot reach their full economic potential unless they are part of a successful Union; yet the success of the Union depends on the economic success of each member state. The sum of the whole is certainly greater than the sum of the parts.

My second issue is an integral part of the growth plan: the need to improve European and national regulation. This is essential for business and consequently for growth and prosperity. I am sure we would all agree that the existing regulatory environment in the EU is overly complex; that the cumulative impact of individual pieces of legislation is costly; and that sometimes the impact of draft EU legislation is not properly assessed. I believe that the situation has improved in the past couple of years, but I certainly welcome the new better-regulation package proposed by the European Commission. Most importantly, this will simplify regulation and it will also cut red tape by withdrawing and/or amending EU laws which prove to be excessive.

I trust that my noble friend can assure me that this particular proposal will be processed speedily and implemented. Excessive and obsolete laws are not just bad for business: they are bad for the reputation of the European Union. I hope that, under the UK presidency, efforts will also be made to find a methodology for impact assessments that is acceptable to both the Commission and the Council. The introduction by the Commission a couple of years ago of an impact assessment for all draft proposals was a huge step forward. Unfortunately, the Council does not fully agree with the methodology used, and consequently questions the results of each impact assessment. An agreed common methodology would be more efficient and would instil confidence in the process.

As a realistic but very committed European, I acknowledge that some European legislation has been excessive; but I take this opportunity to remind those constant critics of the so-called "Brussels red tape" of three things. If the internal market is to function effectively and provide the much-needed and desired level playing field for business, there have to be common standards, and therefore rules and regulations that are common to all. It is much easier for a business selling goods to other parts of the EU to grapple with one set of rules rather than a separate set of rules for each country with which it trades.

I know that the Government are mindful of the problem of gold-plating, but it still exists. It is not just a British disease, although we suffer more than most. Shortly before the Dutch presidency, I had a meeting with the head of the Dutch CBI, who spoke of horses designed in Brussels that had turned into camels before they reached the streets of The Hague. It is extremely important to have an open and transparent transposition process. I welcome the fact that most government departments now usually produce transposition notes when implementing legislation, but I regret that too often they are not available or accessible to the public.

Finally, I turn to an issue about which I feel passionately—democratic engagement. I recently made the case for providing people with more information about the system of governance in which they live, in order to enable them to participate in that system. I now extend that case to information about the European Union and its policies. The European information gap is legendary. It is regrettable at any time but, as we near the campaign for a referendum on the constitutional treaty, it is one that has to be met. Before people vote in a referendum, there must be an informed debate; but that debate can take place only if people have access to the facts about the European Union as well as facts about the constitutional treaty.

I am not suggesting a propaganda exercise. That would be both wrong and counterproductive. However, people need factual information. Indeed, they have a right to factual information about what the EU is, what it does, why it does it, and how it affects their lives. The UK presidency of the European Union provides an excellent opportunity for the Government to meet their duty of explanation, and I would be grateful for an assurance from the Minister that this opportunity will not be lost.

5.48 p.m.

Lord Maclennan of Rogart

My Lords, I begin by welcoming the initiative and the good fortune of my noble friend Lord Dykes in securing this debate on the forthcoming United Kingdom presidency of the European Union. I also warmly embrace the sentiments expressed by the noble Baroness, Lady Royall of Blaisdon, in a very powerful and sensible conspectus of the issues we face.

The adoption of the Multi-Annual Strategic Programme by the EU Council in December 2003, setting out the Union's agenda for 2004–2006, and the assumption of responsibility for carrying the priorities forward by the six member countries involved in the presidency during this period, show the awareness of the Union's leaders that it does not make sense to change direction every six months, on the assumption of the presidency by a new member state. If the gulf between rhetorical setting of goals and the effective delivery of ends is to be bridged by the European Union, then continuity of purpose is essential.

The Prime Minister made it a principal aim to have that need recognised in the constitutional treaty. In the provisions for the continuing presidency contained in the treaty, it may be seen that he was successful. That achievement deserves warm appreciation. However, it follows that there are no startling innovations of policy for the European Union adumbrated in the recent White Paper, Command Paper 6450, on the prospects for the EU during our presidency.

It is none the worse for that, as, increasingly, the problem with the European Union is its adoption of grandiloquent, unexceptionable strategies without the means or, perhaps, sometimes even the will to implement them. By way of example, I take the strategy for Russia, which Sub-Committee C of the European Union Committee, to which I have the honour to belong, devoted attention some months ago. To be candid, that Russian strategy did not live up to its original billing. It was so devoid of concrete results for Russia and those who would invest in Russia that it cannot be surprising that President Putin appears uninterested in the Union, preferring bilateral dialogue with individual members where necessary and increasingly withdrawing from a policy of developing co-operation with the Union to a policy of self-dependency for Russia. That is not a desirable development. It has come about as a result of wholly inadequate institutional arrangements for carrying forward the original strategy, with responsibility divided and, for the most part, unco-ordinated and entrusted to relatively low-level officials lacking clout.

I leave aside the issue of the financial resources required to give meaning to the strategy for Russia, although I have something to say about money in the context of the current discussion about the Union's financial perspectives, which are to run from 2007 to 2013. The Government have opposed the Commission's proposal for a budget worth 1.26 per cent of European Union gross national income. The agreement on future financing is supposed to be reached by June. In this cold financial climate, the European Union will have to be cold-eyed about what it intends to spend on its millennium programmes and grand strategies. If it is not prepared to spend the money, it should refrain from proclaiming grand commitments. That simply leads to disillusionment all round.

To take a particular example, it would be tragic if the optimism of the Ukraine about association with the Union was replaced by despair due to misapprehension about what it might expect of the Union. The readiness to finance the Union's broad schemes should be related to its citizens' willingness to pay for them. The governments of the member states might make a new beginning and seek to explain the potential dividends from such broad projects as the backing of the Ukraine. They might be surprised, as they clearly were by the public's most generous response to the tsunami disaster, by the readiness of Europe's citizens to see those larger responsibilities accepted by their governments on their behalf.

I conclude by turning from the broad prospect to a particular matter of immediate and sharp importance. The White Paper describes 2005—this year—as a crucial year for development and states that, in particular, Africa will be a priority of the United Kingdom's EU presidency. Even now, in the small country of Togo, with its 3.5 million people, there is an opportunity for the presidency to act to end 40 years of dictatorship and impoverishment. The Government will be aware that following the death of Eyadema, who had held his country under a brutal subjection for decades, his son attempted a coup d'état a month ago.

That has been followed by a promise of an election, but one conducted in accordance with the constitution drafted by the late dictator to ensure that the principal opposition candidate, Gilchrist Olympio, the son of a founder of that country, was excluded from standing. Having been gravely wounded in an assassination attempt during the run-up to a previous election, Gilchrist Olympio had to seek security outside his country, but I understand that he is still the favoured candidate of the opposition coalition. If he were to be prevented from standing for election due to the retention of the disgraceful constitution of the late dictator, that would be a clear denial of democracy.

The Government have great authority in this. France, in particular, as Togo has long been under France's wing, but also our Government must move to secure a truly open election in that small country. If our Prime Minister's concern for governance and poverty, expressed in the setting up of the Commission for Africa and in the White Paper, is to have meaning and demonstrate commitment, action now is required in this matter. Let us not be guilty once more of rhetoric without follow-up. Let us show that the European Union is capable of influencing by its own action the spread of its values of justice and democracy in Africa, which can help to secure development and prosperity in that continent.

5.56 p.m.

The Lord Bishop of Oxford

My Lords, I am very grateful to the noble Lord, Lord Dykes, for initiating a debate on this important subject. As he and other noble Lords have said, there is a whole range of subjects that we could consider under this heading. I am especially anxious that the UK should use its presidency to enthuse and motivate others with its commitment to development.

It may be suggested by some that the role of the presidency is simply to try to create a consensus among European countries. Of course, that is an important part, but the role of the presidency is also to set a lead. I am very much looking forward to the United Kingdom setting a lead in the area of development.

I briefly mention the question of debt, because that really belongs to the G7 group of countries—of which, of course, the UK will also be president. The United Kingdom has agreed to remit 100 per cent of debt servicing from 2005–15 and it could persuade other countries in the European Union, such as France, which is rather resistant to it, or the Netherlands, which is resistant to the idea of revaluing IMF gold, to follow its own example and commitment in that area.

There is another aspect of that which is not directly related, but is of particular concern to many non-governmental organisations. That is the way in which so many stolen assets, especially from African countries, have found their way into banks. Can the UK use its presidency to encourage the European Parliament to insist on the co-operation of the banks in investigating those stolen assets? I have been very brief on debt, but I hope that that brevity will not be taken as any indication that I regard remission of debt, especially for the poorest countries of the world, as anything other than a priority.

Secondly, equally briefly, on aid, we need more and better aid. The figure of 0.7 per cent of gross national income has been around for many decades now. The European Union might commit itself to achieving that target by 2010 as a collective entity. Why is it that, 35 years after that figure was first put forward, countries are still setting such low targets? Better aid is indicated by greater coherence and consistency between policies on development and trade and policies related to aid. It is no good putting in a lot of aid if trade relationships are fundamentally flawed.

The aid needs to be well targeted. It has been suggested that at least 20 per cent of aid needs to go directly on the social services of developing countries, but most countries are putting in less than 10 per cent in that area. Many countries tie their aid to reciprocal arrangements whereby that country is forced to buy goods and services from the country that is giving the aid. The United Kingdom is not an offender in that respect: all its aid is untied; but Italy, for example, has 92 per cent of its aid tied and a good number of other countries have 50 per cent or more.

My next point is not directly related but still crucial. We know that in many of those countries there is endemic conflict involving arms. How do the arms get there? Do we have an effective arms treaty at the moment and effective regulation of arms brokers? I suggest that we do not and that that may be another area where the United Kingdom could use its presidency to good effect.

I do not regard aid as anything less than a priority, but I want to spend a few minutes on trade. In an ideal world there would be no need to remit debts and to give massive amounts of aid because people would be able to trade with mutuality: mutual giving and receiving. We need to remind ourselves that the European Union is responsible for 20 per cent of the world's trade. It is the biggest importer and the second biggest exporter of agricultural goods. That is a huge share of the world's market and much of it is in relation to the developing world.

As the noble Lord, Lord Dykes, emphasised, the common agricultural policy is a continuing scandal. There is no other word for the way in which food is dumped on other countries and agricultural products are so subsidised that other countries' economies are ruined. We all know the example of the tomato industry and rice products in Ghana. Markets and industries are decimated because of heavily subsidised goods from outside.

The aid agencies are particularly concerned at present about the economic partnership agreements. It has been suggested that they will involve a great deal of liberalisation of trade and that 90 per cent of all trade should be fully liberalised within 10 years. Yet it is also recognised that that may not be in the best interests of the developing countries, not least because total liberalisation, particularly if conditionality of other kinds is attached to it, has been shown to be not in the best interests of those developing countries.

I should like to spend two or three minutes of my time on the economic partnership agreements. Although the Trade Commissioner, Peter Mandelson, has suggested that we may have to reconsider the economic partnership agreements and that there may be other ways of engaging in trade relationships, there are still a number of concerns. There are concerns about the nature of the negotiations; for example. that they are being undertaken by the department dealing with trade rather than the department dealing with development.

It is unclear where the trade department's expertise in development comes from and whether the developmental aspects of the EPAs are receiving due scrutiny by development officials at European Union and member country level. There is an imbalance between the negotiating partners and the fact that no public reassurances have been given to the African, Caribbean and Pacific countries that rejection of the EPA proposals will not impact on future EC aid flows.

There is a lack of any specific clearly defined alternatives to the economic partnership agreements despite the commitment to offer such alternatives; and the Commission is unwilling to provide well-defined alternatives in the immediate future. So there are concerns about the negotiations. There are also concerns about the content of the proposals.

First, there is the presence of the so-called Singapore issues—trade facilitation; competition; investment; and government procurement—in the EPA negotiations despite their having been rejected at Cancun in the WTO negotiations and the extension of the proposals beyond the terms rejected at the WTO.

Secondly, there is the demand for reciprocity: the opening of ACP markets to EU goods in exchange for the opening of the EU market. As I have indicated, there is a great deal of concern that the African, Caribbean and Pacific countries will be compelled to liberalise their markets leaving them open to floods of EU goods with which they cannot hope to compete.

Thirdly, there is the inability of the poor countries to offset the loss of tariff revenues that result from the lowering of the tariffs. There are issues of debt and aid, but I have focused on trade and trade justice: making trade work for the poor; giving poor farmers in developing countries a chance to trade their way out of poverty by immediately eliminating all EU export subsidies; significantly reducing trade distorting subsidies; supporting the right of developing countries to protect their sensitive agricultural sectors; and ensuring that market access concessions work in favour of the poor.

Finally, the EU should stop pursuing potentially damaging economic partnership agreements in their current form with the African, Caribbean and Pacific countries. They need changing in order that the needs of those countries can be taken into account. I believe that the presidency of the European Union at this time offers a huge opportunity for the commitment and enthusiasm in this area shared by so many in this country to be shared also with other countries in the European Union.

6.7 p.m.

Lord Tomlinson

My Lords, I too would like to express my gratitude to the noble Lord, Lord Dykes, for his initiative in giving us this opportunity to debate the forthcoming British presidency this afternoon. Although I am not going to talk about development, I particularly appreciated the contribution of the right reverend Prelate. It reminded me that when I left the Ministry of Overseas Development where I was a junior Minister in 1979 we were closer to achieving our 0.7 per cent target than we are today. I have to say—not being too party political—that we went a long way down during the previous administration and we are working our way back up, but it shows how seriously we have been remiss as regards an obligation that we accepted so many years ago.

The presidency, which we will occupy the second half of this year, is important. One of the things that we have to avoid is creating too high an expectation of what can he achieved by our leadership in six months. All political leaders make the mistake, which we have to resist during our presidency, of claiming that they can do so much by leading from the front and being at the heart of Europe.

The pattern for the presidency is already set and fixed. We have only to read paragraph 2 of the February 2005 White Paper to see how precisely it is fixed in the form of an increasingly rolling multi-annual programme. So let us not hear too much from the Government about leading Europe; perhaps a little more about collegiality and the importance of working together.

That does not mean that the Government should not have clear aims and objectives of things that they want to do. The major aims and themes for the presidency will include issues, such as security, prosperity and sustainability. From that important agenda, if we are to do anything by way of leadership, we need to create the domestic climate in which we can persuade the British people to face up to two decisions that they will be obligated to make—one perhaps a little more closely than the other.

We will have to face the imperative of making a decision in a referendum on the constitutional treaty and, at some other stage, a decision in a referendum on our membership of the euro. Based on the common agenda that we have with our European partners in relation to security, prosperity and sustainability, we should use that as the springboard for domestic political activity to persuade the electorate to the right frame of mind in which they can meaningfully participate in those referenda.

First, as regards the referendum on the constitutional treaty, we must show that this is a fairly limiting treaty. It is a defining treaty that is based on a concept of conferred competences. We have to show that we have a European Union that does not have any autonomous competence of its own. It only has competence in so far as the sovereign decision of sovereign member states has transferred that competence to the union. Any competence not so transferred remains with the nation state. So we have a constitutional treaty which demonstrates that and defines what we should do together, but, at the same time, underpins the role of the national state and enhances the role of national parliaments by, for example, the proposals that are made in relation to subsidiarity.

Therefore, during our presidency, we must use the opportunity to show that there is no greatly increased power to the centre and that the Tory argument about "a state called Europe" is not merely wrong, but is conceptually nonsensical. I hope that during the British presidency we will find some dormant, no longer useful or relevant directive and get it repealed. That would have enormous symbolic significance. There must be something in the 80,000 page acquis communautaire that is no longer of use to man or beast: get rid of one and that will be a major British achievement in the presidency, which shows that not all decisions permanently reside there.

Secondly, as I said, shortly after, at some time, we will have to face the matter of a euro referendum. Let us not forget that the Government are committed in principle to join a successful single currency. It is subject only to those economic tests. We have got, I believe, only a subjective decision to get over. But, without prejudice to the economic tests, during our presidency the Government must start more urgently, more systematically and more directly to spell out the benefits of euro membership.

We all know the arguments. We have been over them so many times before: for example, reduced transactional costs in circumstances where more than 55 per cent of our exports go to the European Union; greater certainty about export contract pricing; and more transparency concerning transnational comparisons of price. All of those things have to be spelt out, and the presidency gives us the platform to do that domestically. Forget about taking the lead in Europe: take the lead of the argument at home. Then there is the opportunity to win two referenda.

The presidency will require us to do other things, of course. One of the items on the agenda is future enlargements, including Romania and Bulgaria in the relatively short term; Turkey, a bit further down the line; and others further downstream—former Yugoslavia and even the Ukraine. People have aspirations. Future enlargements will be on our political agenda during the British presidency, not for determination but for discussion.

I make a special plea that during our presidency we should be particularly concerned about external borders and their security. I am one of the few freaks in the Labour Party—I say to the Minister—who walks around with a pledge card in his pocket. My pledge card for the next election says, "Your country's borders protected". But I say to my noble friend that you cannot do that unless you have secured the external borders of the European Union.

When we have an enlargement agenda that could wind up with us having common borders with Syria, Iran, Iraq, Belarus and Russia, we have to be a little bit more serious in some of the work that we do on securing external borders than perhaps we have been in the past. I say that particularly in the context of the debate that we have had during the past couple of days. Security on our external borders is imperative, not only for tax and economic security, not only for illegal immigration, including people trafficking, but also for arms and drugs trafficking and their relationship to terrorism.

My final point relates to a major internal issuefinance—which will be seriously on the agenda. We will have to get to grips, because it will not happen under the Luxembourg presidency, with the next financial perspective for the years 2007–2013. The Commission ambition is for a perspective based on 1.26 per cent of Community gross national income. We, together with Germany, France, the Netherlands, Austria and Sweden, are convinced about the merits of the argument for a 1 per cent of EU gross national income.

In the context of that, there will also have to be an own-resources decision. The Commission has quite clear proposals for a medium-term European Union tax. To my noble friend, I say that I hope we have his clear assurance that that will be resisted. Such a tax, as all own-resources decisions, will require unanimity. We expect a budget based on 1 per cent. Anything else needs to be resisted.

Horse trading based on the idea of surrender of the United Kingdom rebate in whole or in part should also be resisted. That is not because we want anything, or everything, for ourselves, but because there is a better way of getting rid of the British rebate; namely, get rid of the maldistribution of resources from the common agricultural policy. Mathematically, the need for a rebate then works itself out of the system.

I give my noble friend a challenging agenda where we can be at the heart of decision making, but leading the British people to circumstances in which we can get a majority in the necessary referenda.

6.18 p.m.

Lord Russell-Johnston

My Lords, we have been much entertained by the speech of the noble Lord, Lord Tomlinson. Of course, I agree with him very much on his final remarks and will come back to that. I am peculiarly and particularly pleased to speak in a debate introduced by my noble friend Lord Dykes. Aeons ago, even before sunset, I was, for about a decade, the Liberal Party spokesman on Europe in the other place. We had endless debates—I remember Maastricht, that merry occasion—and I made endless speeches. Usually, facing me, smiling beatifically, was the face of the good Lord Dykes who, at that time, was misplaced within the Conservative Party. He has now seen the light—the sunrise—and he is clearly a happier person. It was awfully interesting when I used to make pro-European comments, which I did frequently, and he would smile or nod. Immediately the people all round him would glare blackly at him. I felt that he was almost certainly due for a row from the Whips when the debate was over.

I am a completely unrepentant federalist. I know that the F-word is banned—even within the Liberal Democrats these days. I was a federalist not only before the United Kingdom accession in 1973, but prior to 1957 and the Treaty of Rome. I was never affected by the strange view of the Thatcher and Major years that somehow federalism was a centralising concept—it never was and never has been. That is why successive British governments introduced federal systems into their colonies as they shed them—and into Germany, for that matter. So the dream of an economically and politically united Europe, which continued to rejoice in its cultural and linguistic diversity, and which inspired me in the 1950s, still holds me in thrall. As somebody said, "If you don't have ideals you will never achieve anything".

There are five issues that I wish to touch on briefly. First, I refer to the constitution. We owe both the noble Lords, Lord Tomlinson and Lord Maclennan, a great debt. The Eurosceptics appear to have fled the battlefield. I know them fairly well: I know the sound of their voices.

Lord Stevens of Ludgate

I am here, my Lords.

Lord Russell-Johnston

Fear not, my friend.

The constitution is portrayed by the sceptics as a great threat to our national independence. As the noble Lord, Lord Tomlinson, rightly said, that is rubbish. From a federal point of view, I could say that the constitution is timid, hyper-cautious and not forward looking, but, as a threat to the nation state, it is about as threatening as a mouse in the Albert Hall. That is nonsense.

One of its other shortcomings—I could develop the point considerably, but I shall not—is the failure to deal with the issue of devolution. As we are slowly knitting together in Europe, the individual nation states are devolving at the same time. Within the United Kingdom, we have devolved to Wales and Scotland, and efforts are being made to find something suitable within England. The same is happening in France and Italy. Germany already has a federal system. There is no developed way of responding to that at a European level.

My second point refers to the rebate. I agree again with the noble Lord, Lord Tomlinson, that it has to do with the CAP. We should remember that Mrs Thatcher got the rebate because our colleagues in the European Union accepted that the working out of the CAP meant that we were unfairly treated Financially. In approaching the matter now, the Government should not argue on defending a British advantage, but on what is a fair way of doing things. We are now a bigger European Union, with a number of countries that are poorer than us having joined. They deserve the solidarity of European Union support.

Thirdly, I refer to human rights. The European Union's most important exports to the world are human rights and the setting of democratic standards. I ask that the Government oppose completely the sale of arms to China. The huge vote against such a proposal in the European Parliament towards the end of last year cannot and should not be ignored. It is not simply because Tiananmen Square was a long time ago, or even that not very much contrition has ever been shown for what happened then; it is the present situation of Taiwan, which mainland China continually threatens, and which is developing democracy in a way that we should admire.

We should also be quite direct with Russia. A couple of days ago, Aslan Maskhadov was shot and killed. When I was president of the parliamentary assembly of the Council of Europe, I spoke to him a couple of times. I was always persuaded that he was a separatist leader, not a terrorist in the sense of targeting civilians, such as Basayev, for example. After all, one remembers the Russian's promise to work for a peaceful solution when joining the Council of Europe, which it promptly broke.

I have two final points. First, the WEU is being knitted into the European Union, and that process is taking a little while. In particular, there is the question of how national Parliaments, such as ours, will have the continued opportunity to comment directly on defence matters that are decided at the European level. Again, that decision process is slow.

The simplest way would be to make the existing Western European Union Assembly a European Union institution. That would be a simple and pragmatic way of enabling national Parliaments to continue to give advice—after all, it is only an advisory assembly. I do not say "only" pejoratively. It is important to maintain that conduit.

Finally, there is a continued and ongoing dispute that the extension of the European Union threatens the existence of the Council of Europe. I do not think that it should do so. The two each have a place well into the future, and the Government should make it clear when they take over the chairmanship of the European Union that they do not wish the removal of the Council of Europe. Its work in democracy building—especially in the countries outside the European Union, but not exclusively so—remains of the greatest importance.

6.29 p.m.

Lord Stevens of Ludgate

My Lords, I, too, am grateful to the noble Lord, Lord Dykes, for calling attention to the United Kingdom presidency of the Council of the European Union.

I feel somewhat isolated but undeterred in my views. Shortly following the presidency, we shall have in 2006 the referendum on the EU constitution. One hopes, therefore, that the UK presidency will seek to clarify a number of issues so that the electorate can have a clearer idea what they are voting about, in view of the conflicting opinions of European leaders.

I note that the Prime Minister's colleague in the other place, who is in charge of the negotiations, considers the constitution to be a tidying-up exercise. Others may differ from that definition. I see no point in contesting the definition, but let us consider what is being tidied up.

Jean-Luc Dehaene, vice-chairman of the convention which drew up the document, in June 2004, said that, the Maastricht treaty with its social laws and single currency had delivered a socio-economic Europe"— whatever that is— in the early 1990s, now the constitution was delivering a political Europe which would need to be further thrashed out in the years ahead". Our Prime Minister stated that the text agreed in Brussels demolished myths about Britain surrendering authority to a federal super state. It will have its own full-time President, Foreign Minister, diplomatic service; its own anthem, flag and Europe day.

Germany's Minister for Europe said last week, the constitution is, in spite of all justified calls for further regulations, a milestone. Yes it is more than that. The EU constitution is the birth certificate of the United States of Europe". The Spanish Foreign Minister said: We are witnessing the last remnants of national politics. We must now give up sovereignty in the dual areas of foreign affairs and defence". The Spanish Prime Minister stated last week that the EU constitution would create a diplomatic service for the EU which would eventually replace national embassies. This is tidying up, according to our Government.

The Prime Minister's former Europe adviser, Mr Liddle—now adviser to the European Commissioner, Mr Mandelson—said: the constitutional treaty enshrines the transformation of Europe from a single market to a political union". He also said this week that the Prime Minister should be more honest with voters and admit that Britain was handing more and more power to Brussels and that the constitution was a political project and not a free trade society. Mr Monnet would have been delighted with these remarks.

Our Foreign Secretary says that the constitution marks an end of the transfer of British sovereignty to Brussels; thus far and no further. At least he admits it will and has taken place. But this, of course, ignores the general flexibility clause that allows the EU to adopt new powers not set out in the constitution at any time. There is also the power to set up a European public prosecutor.

Our negotiators tabled 275 amendments and achieved 27 of them, but the Foreign Secretary said that we delivered on every one of our red lines. I assume these were not red lines. However, we lost out, for example, on the creation of a European mutual defence pact and a common asylum and immigration system.

The new constitution gives more power to the European Parliament and a say over the [...]100 billion budget—if that is indeed the budget—but it does not identify any powers that might be returned to national governments, even though the European convention was specifically asked to do so.

However, for the first time, a European treaty gives any member the right to withdraw from the European Union. This implies that the Union is a voluntary association of nation states. Also, if the EU as a whole cannot agree to do something, one-third or more of the member states can agree to do it on their own. National parliaments can vote down new proposals from the Commission if they think that it can be done better at a national level. If one-third reject, Brussels has to review the proposal. This, however, is valueless as Brussels can still go ahead if it wants to.

The Prime Minister may boast that he has protected his lines on tax, defence and foreign policy, but we seem to have given way on practically everything else. Small wonder when you consider the views of other European leaders, which I have expressed.

On the "Today" programme on 19 January 2005, at 7.14 a.m.—I was actually up and I heard it—the Prime Minister said: Europe remains a nation". He then corrected it to, Europe remains a union of nation states". His actual words were: Europe remains a nation—uh, uh—a union of nation states". This sums it up. This is really more than a tidying-up exercise, but even the Prime Minister does not want to admit it.

The White Paper issued in February 2005 touches on many aspects of the EU and contains some statistical information. It refers to applying the union rules effectively across the enlarged union but what about the un-enlarged union? It states that the UK has complied with 70 per cent of the Lisbon directives, which is above the EU average of 58 per cent.

Mr Wim Kok, the Dutch former Prime Minister, has said that urgent and serious action needs to be taken to meet the Lisbon targets. The stability and growth pact is more noted for its breaches than its compliance. We are to have an integrated life-long learning programme within the EU when in this country we cannot even agree on our domestic schools' examination schedule. We are to have even more legislation on gender equality and equal treatment. The list goes on.

Much more emphasis should be placed during our presidency on what the member countries are expecting from the new constitution and on clarifying what their expectations and objectives are. They appear to be diametrically opposed to what our leading politicians seem to be telling us, sadly not for the first time. The objective of the founders of the EU was always political and economic unification. We need to recognise and admit that, unless we tackle this desire now, that is where we will end up. The Prime Minister should clarify the position during his presidency. Health and safety is yet another area where our negotiators agreed and then discovered that it invades every area of our lives.

I very much hope that many of those in favour of even more political, social and economic integration in the EU, and those against, will be able to raise the level of the debate in the coming months from insults and generalisations to something more carefully thought through and presented. To describe Euro-sceptics as xenophobes, as the Trade Minister did last week, does not get us very far. We, like Mr Liddle, are seekers after the truth, and our presidency should be used to clarify these issues.

6.37 p.m.

Lord Lea of Crondall

My Lords, shall I rise to the bait? I think my noble friends would be disappointed if I did not say, "Yes".

Europe is the league we are in. I do not know whether the noble Lord, Lord Stevens of Ludgate, is still with us in spirit, but perhaps I may respond to what he has said. The noble Lord did not address the fact—he may not have noticed—that the European Union is a great magnet for attracting countries that wish to join. As Chelsea proved last night, the league we are in is one in which we can win. That is obvious at the level of the demotic, but it is not yet obvious at the level of the political.

The noble Lord, Lord Stevens of Ludgate, also did not address the question of why it would be dangerous for Britain to be isolated. It seemed to me that the noble Lord's speech added up to saying, "Stop the world, I want to get off". It is blindingly obvious that a policy of, "Fight them on the beaches and fight them in the hills" will not get Britain anywhere.

The six-month presidency will be suspended if the treaty is ratified, but we hold it for the moment and it is a golden opportunity—the noble Lord, Lord Tomlinson, made this point—for us to ask basic questions and to have them answered in a language that everyone can understand. We should not rely on focus groups, which are a contradiction in terms. All that focus groups do is prove that there is 99 per cent ignorance and then ask the people—as if they were as wise as Aristotle, Plato and every philosopher in Greece and Rome put together—to provide a strategy on international development. Clearly that is a contradiction in terms. We have to show leadership and explain at the same time.

Where do we want Europe to position itself in the world? Should we not try to get away, do we not want to get away, does the noble Lord, Lord Stevens, not want to get away from the American coalition of the willing? If we do want to get away from that, what do we do? A new chapter opened up a couple of weeks ago when President Bush went to Brussels—he did not come to London this time—and said that he supported European unity in being a great strength for stability and progress in the world. That does not come naturally to someone from Texas. We hope that the penny has dropped in Washington. Even the US can feel isolated. That is a negative perspective. But we have to pursue positive aspirations for democracy and other desiderata—and development—together, as the right reverend Prelate emphasised.

I would like to give another example of how Euro-sceptics—and let us call them by their proper name, Europhobes—miss the way the world is going. Let us take the enormously important development of negotiations through the EU big three on Iran's attempt to build on its nuclear power programme and weapons-grade materials. That is contrary to the Non-Proliferation Treaty. The stuff that history is made of has occurred in the past six months. History does not necessarily come in the most obvious, overt big jumps. It comes through Jack Straw, M. de Villepin and Joschka Fischer saying that we ought to lead the negotiation with Iran together. Last November they started systematic reporting to the Council of Ministers for the first time. It is very important that an agreement is reached. If it fails and we go down the Security Council road, we will end up with somebody bombing Iran's nuclear facilities. That could be even more dangerous than Iraq. The EU is now taking the lead on that matter. I do not know whether the noble Lord, Lord Stevens of Ludgate, does not want the EU to do that, but it an important thing to do in the world at the present time.

Everybody is confused and schizophrenic about the development of common foreign and security policy. People are schizophrenic because they do not know that unanimity means unanimity. It means that you can anything as long as you agree to do it and you cannot do anything unless everybody agrees that you do it. That is relatively simple but it causes a lot of people a lot of confusion on whether we have a European foreign policy, a European diplomatic service, a European this, that or the other. There is no reason why we cannot develop in that direction if we do it together with unanimity. That is the agenda in the treaty.

After the election, on all these matters the Government should throw caution to the winds. If we work on the assumption that a Labour Government will be returned—and most people do so, including most of the people on the Conservative Benches—we have to throw caution to the winds and start to raise our game in explaining what we are doing from the appropriate date in May.

I would like to pick up on the financial position and the issue of the rebate. I welcome the report of EU Sub-Committee A. The chairman of the European Select Committee, the noble Lord, Lord Grenfell. is going to make a contribution in a few minutes. I welcome the suggestion that there is a trade-off between the cost of the common agricultural policy and our rebate.

My noble friend Lord Tomlinson does not like the idea of horse trading, so I will not call it that. It does not make much difference what we call it—as Shakespeare said, A rose by any other name would smell as sweet". If we think back to The Hague in 1969, there has been a direct connection between the way in which Customs duties and the financing of the agricultural policy works with our trade pattern relative to the French. That has always been the implicit trade-off that some time had to be addressed head on—and we do address it head on.

I am not sure that we can stick to figure of 1.00 per cent. A figure nearer to 1.14 per cent will come out of the negotiations because we have to go with a lot of the aspirations of the EU on development policy. Many of those proposals are predicated on the figure of 1.14 per cent. This is a negotiation, but we have to get real on it very quickly after 1 June.

I am attracted by the suggestion of the noble Lord, Lord Tomlinson, about repealing something. It would be nice if there were a "bent banana" directive because then we could repeal it. If we start a competition, I am sure that we will find something similar but I have not yet been able to identify it.

When people start to address the problems of the detail of so-called redundant directives they do not get very far because the acquis communautaire has, in general, stood the test of time. In the field of employment law, the quality of contracts of employment for everybody in this country—be it in transfers of undertakings, equality of opportunity, migrant workers, information consultation—has passed the test of time.

I have given the Minister notice of this point. If the services directive goes ahead, it must be accompanied in the Warwick agreement by the Temporary Agency Directive. We must reassure people that the freedom to operate services is not incompatible but goes side-by-side with protecting people working on sub-contracts. That is an important part of the agenda for the next six months.

6.47 p.m.

Lord Watson of Richmond

My Lords, I would like to join in congratulating my noble friend Lord Dykes on securing this debate. I have known him since Cambridge. His record as a consistent, comprehensive and enthusiastic advocate—indeed, champion—of European union is exemplary. At Cambridge I left the Conservative Party and joined the Liberals. It has taken him four decades to achieve the same decision, but we on these Benches congratulate him on that.

The debate has produced some interesting contributions. The noble Lord, Lord Stevens, has introduced a new theory of conspiracy—the "uh-huh" theory. It joins a long series.

There have been many good points. I was particularly interested to hear my noble friend Lord Russell-Johnston refer to his federalism. He made the point that federalism is normally understood to be about the devolution of power, not the concentration of power. I vividly remember being invited to address a meeting in Munich. A rather enthusiastic Bavarian came up to me afterwards and said the he found the British position of federalism very difficult to understand because he believed it to be the most important element in securing the independence of Bavaria. So federalism is understood differently in different places.

It is in some ways slightly esoteric to discuss the UK presidency before the general election. We know that the UK will hold the presidency but we will not finally know what political personnel will hold it until the people decide. I would like to suggest three areas in which whoever happens to be there might be able to make a distinctive contribution to European thinking and planning during those six months.

The first stems from the draft constitutional treaty. That treaty, which is long and complex, and which sometimes appears to please no one because it has not delivered the whole of the argument to any side—personally, I believe that that is one of its great virtues—enshrines the principle that, in future, national parliaments should review all Commission proposals. If one-third of them take the view that a Commission proposal, in effect, ignores or contravenes the principle of subsidiarity—some blueprint for a federal super state—then that Commission proposal falls.

That is a significant proposal. It is a great invitation and challenge to national parliaments to become much more seriously involved in European legislation. As the noble Lord, Lord Kerr, has written, how we respond to that invitation will be an important test of the British instinct for democratic and parliamentary control. During the UK presidency it would be very useful to test how European national parliaments can take up that challenge.

We have a system of reviewing European legislation in this House and in Westminster to which changes are being made. If we are to be effective in reviewing Commission proposals, there has to be a new degree of co-operation, a new level of efficiency, proficiency and speed of response in the way in which national parliaments consider such proposals. It would be very valuable if, during the presidency, the UK tested the areas of possibility. After all, one of the great reputations that we have within the European Union and one of the reasons that people like Monnet so welcomed British membership is that it is believed that we will add a new dimension, a new toughness, to democracy within the European Union. I would be interested to hear from the Minister whether something could be done.

There is an important additional dimension to that matter. Within a European Union of 25 countries, the review of proposed Commission directives and so on, takes on quite a different complexity. An obvious example could be a harmonisation proposal that affects food hygiene. What would be appropriate for Spain in the summer would not be appropriate for Finland in the winter. Therefore, a level of diversity and complexity has to come in to national parliament's review of Commission proposals. The constitution hands national parliaments an initiative and a potential that they have not had before. It is very important that this country leads the way in responding to that.

Secondly, I agree with the remarks that have been made about the US President's visit to Brussels. In some ways it was a slightly bizarre visit, but it was an important, useful and hopeful one. During the presidency, the UK could take a lead in pursuing some of the initiatives and ideas that came out of that visit on mending the transatlantic relationship. How do we move from slightly statuesque conferences, which are meant to bring together a transatlantic, US and EU perspective, to make that more of a reality?

It is urgent that we do so, because although we were treated to the somewhat unusual spectacle of the President listening, there is a background to the situation; for example, Condoleezza Rice, before the inaugural speech of the President, listed—not in alphabetical order—six outposts of tyranny: Iran, North Korea, Burma, Cuba, Belarus and Zimbabwe. During his speech, President Bush quoted Abraham Lincoln: Those who deny freedom to others, deserve it not for themselves; and, under a just God, cannot long retain it". On previous experience, we have an administration in the United States which might just believe that God should be given a helping hand and that there should be some facilitation, perhaps through the deployment of force in some way, in bringing in the just rule of the Almighty. Given the perilous world situation in which we live, it is critical that the transatlantic relationship is improved in quality, in detail, in speed, and in regularity.

The final area in which I believe that the UK could make a positive difference during the presidency is, as a number of noble Lords have already pointed out, on the Lisbon agreement and its implementation. A real problem with that is that it defines almost everything as a priority. Looking at the original Lisbon agreement, one sees that priority is to be given, for example, to research and development; policies for the information society; structural reform for competitiveness and innovation; completion of the internal market; modernising of the European social model; investing in people; combating social exclusiveness; and funding the right means for the right macro-economic political mix, among other things. An old adage is that if everything is a priority, nothing is.

One area where the United Kingdom could place great emphasis, because of its importance to this country and our track record, is on the urgent need to enhance Europe's research and development capability. The facts of the situation are that 2.67 per cent of the United States GDP is committed to research and development, whereas only 1.83 per cent of the enlarged EU's GDP is committed. That is very dangerous for Europe and for us.

I declare an interest in that I chair the Chemistry Advisory Board at Cambridge. I noticed that the Vice-Chancellor of Cambridge University, Alison Richard, a very fine and outstanding vice-chancellor, responded to the president of the European Commission who was publicly bemoaning the fact that in Europe we have no MIT. She wrote a letter saying, "What about Cambridge?". That is fine, but at Cambridge we have an excellent state-of-the-art chemistry ability, which is generously privately supported, but in other universities, chemistry departments are closing. If, over the next couple of years, we do not take seriously the R&D challenge within Europe, we shall lose out significantly. I believe that that is an opportunity that will occur under the UK presidency.

Six months is a short period of time. There is not much time. There will be a huge EU agenda to deal with and the danger is that it will submerge any sense of priority or any distinctive initiative. I would urge on the Minister and on whatever government emerges after the election that it is important that what we do during our presidency adds value, is characteristic of the best of our political and economic capability and makes a positive difference in Europe.

6.59 p.m.

Lord Grenfell

My Lords, I, too, congratulate the noble Lord, Lord Dykes, on the very wise and timely choice of topic for this debate. I also congratulate him on his good fortune in that the subject popped out of the hat for today's debate. With the likelihood that certain political events of high importance will occur during the run up to the presidency, I can only hope that the House will not be too distracted from the serious business of monitoring closely the Government's leadership of Europe from July to December.

I intervene as chairman of the Select Committee on the European Union to draw attention to some matters relating to the presidency, and to give the House a flavour of the kind of work that the committee is already doing in this preparatory stage. I have discussed today's debate with members of the committee and, as chairman, I will of course represent the views of the committee as best I can.

There are two matters which I will not address. The first is the referendum on the constitution, on which I will say only that I hope that the presidency programme will help inform the referendum debate in the country, and that preoccupation with the presidency will not deflect the Government from their stated intention to set out all the facts about the constitution before the British people, a point forcefully made by the noble Baroness, Lady Royall.

Secondly, I shall not be addressing the important question—and it is an important question—of the proposed mechanism for parliamentary monitoring of the application of the subsidiarity principle as set out in Protocol 2 to the constitution. The Select Committee is due to report to the House shortly on this initiative.

I therefore turn to my substantive remarks. It goes without saying that all seven sub-committees of the European Union Committee will keep up their scrutiny work as usual during the presidency; and yes, as the noble Lord, Lord Watson of Richmond, said, it is becoming more complex in a Union of 25.

All sub-committees have examined the Commission's annual work programme and have considered their own work programmes in the light of that. Specific questions on the programme are being put to the Commission for early answer. The Select Committee has also considered the operational programme agreed between the UK and Luxembourg, covering their two presidencies. The joined-up planning between the UK and Luxembourg in setting the two presidencies' programmes for 2005 is a welcome contribution to efficiency, but the committee has asked the Minister for Europe how this spirit of practical co-operation can be maintained as we move towards team presidencies. Given that it is envisaged that the next UK presidency will not be until 2017, it is important for us to hear from the Government that they intend to contribute fully to the policy planning process over those next 12 years.

The committee has also noted that there are signs of a more strategic approach by the Commission and of a desire to work with the Council in forming strategic plans. We have asked the Government whether such changes will signify a change of approach over the term of the Barroso Commission compared with its predecessor.

We have also asked Her Majesty's Government how the Commission's work programme is being prepared in co-ordination with declared presidency priorities. I was referring to the 2005 programme—the first iteration of the 2006 programme has, I understand, now appeared, without any great fanfare, on the Commission's website. It would be interesting to know what hand the UK has had in the preparation of that document, too.

The committee has also asked the Minister for Europe how we can best begin to get an overview of plans for the UK presidency. We have invited the Minister to talk to us in general terms, well before the presidency begins, and in particular to talk through with us proposals related to the Lisbon agenda and better regulation—two highly important issues.

In the mean time, we have read the Minister's reply to a Written Question in another place, setting out the Government's priorities for the General Affairs and External Relations Council during the presidency. Our committee is currently looking at how procedures for scrutinising CFSP matters can be made much more effective than they have so far been. So the Written Answer is of interest, but there are many other areas on which we will need information.

The Minister for Europe and his predecessors have always made themselves available to the committee for detailed scrutiny, although diary pressures in recent months have meant that some commitments have not been met. I hope the Minister will be able to confirm today that opportunities for detailed scrutiny will continue to arise in the coming months. Personal appearances by the Minister and his colleagues are not just very valuable; they are essential and are, in my committee's view, the core of parliamentary scrutiny and accountability. I quote from the committee's annual report 2004, which I commend to the House, where we indicated that, the Select Committee will in particular seek an early opportunity to present the House with a ministerial overview of the Government's intentions for its Presidency". May I add, however, that recent proposals from the Government for enhanced provision of information to Parliament before and after Council meetings are greatly to be welcomed. The replacing of a series of ad hoc arrangements for ministerial letters and Commons answers by a robust and systematic series of Written Ministerial Statements in both Houses will both improve efficiency and allow all Members of the House to have access to better information.

Turning to specific questions, I can inform the House that the EU Committee and its sub-committees have already raised a number of issues with the Government. with a view to informing the presidency. I do not expect the Minister to answer these today as that is a matter for the Government's responses to the relevant reports. but I hope that the House will find three examples of interest. First, are the Government satisfied with the content and direction of the Hague programme—the five-year EU programme of work on justice and home affairs? Which of the elements of the Hague programme will be examined as a matter of priority during the UK presidency?

Secondly, in its recent report on EU climate change policy, the committee pressed for intra-EU aviation emissions to be incorporated into the EU emissions trading scheme as soon as possible. In response, the Government say that taking aviation into the trading scheme is a top priority of the UK presidency. We greatly welcome this, and we will watch out for concrete action.

Thirdly, the committee's report on defence rights—procedural rights in criminal proceedings—calls on the Government to ensure that the outcome of negotiations on the framework decision is "something worthwhile" and that the proposal is not watered down. According to the Hague programme, the deadline for the adoption of the draft framework decision is the end of 2005, so this is clearly a matter for the UK presidency.

In addition, the committee is publishing a number of reports over the next two months, some of which—for example, the report on the controversial Services Directive and the report on reforming the deeply flawed common agricultural policy—will be making further specific recommendations to the UK presidency, although I cannot, of course, leak our findings today.

I am sure, however, that many noble Lords will have noted reports in today's papers on the future of the committee's report, published today, on the future financing of the European Union, the financial perspective for 2007–2013. Since, as the noble Lord, Lord Tomlinson, pointed out, negotiations on the financial perspective will spill over into the UK presidency if agreement is not reached during the current Luxembourg presidency, which is a real possibility, we hope that the Government will take good note of the conclusions and recommendations in our report.

Turning briefly to other issues relating to the presidency, the decision on Turkish accession will be a clear priority. The Prime Minister's Statement to Parliament after the December European Council noted: Turkey's performance, including in relation to respect for fundamental freedoms and human rights. will be closely monitored". My committee has therefore asked the Government to answer a number of questions on how that monitoring is to be handled. There have been queries about the length of time proposed for negotiations, which is significantly greater than for previous accessions. We have asked the Government what it is about Turkey that justifies, in their view, making this "a different order of accession" and whether this is to become the rule rather than the exception with future enlargements.

Given the timing of the decision on Turkey, due on 3 October, it would be particularly helpful for the committee to know whether Her Majesty's Government will ensure that the necessary documentation will be deposited in Parliament for scrutiny before the Summer Recess. That is perhaps a matter on which the Minister could answer today.

These same December European Council conclusions also called for EU policies "to provide added value". We have asked Her Majesty's Government to explain precisely what they see that as meaning. How does "added value" differ from respect for the principle of subsidiarity?

I also intend to invite my committee to consider whether, in the months leading up to the presidency, we look at the whole area of better regulation. Much is spoken about this, and there seems to be a genuine willingness to improve things, but what in practice does it mean? What practical steps are being taken to deliver this, and how will their success be monitored? How will all the institutions of the European Union be effectively engaged? Commission vice-president Verheugen, who holds the competitiveness portfolio, has stated that better regulation is at the top of his list. That is good, so let us hold him to it. I hope that my committee will agree to look into these matters.

Last for mention, but by no means least, is the role our Parliament will play in hosting inter-parliamentary events during the presidency. There are exchanges of views on European matters between national parliamentary committees in a number of fora, and the jewel in the crown is the meeting of European affairs committees—COSAC—at which more than 150 parliamentarians from the member states and the applicant countries will be getting together here in Westminster in October.

My committee will work with our co-hosts in the other place to ensure that the meeting of COSAC which our Parliament will host here will indeed provide sensible and practical discussion for our parliamentary colleagues from all the other member states. That will make a fitting contribution to what we all hope will be an excellent presidency, marked by realism, pragmatism, and above all inspired by the art of the possible.

7.10 p.m.

Lord Wallace of Saltaire

My Lords, this has been in many ways a very odd debate. I miss the strength of the Euro-sceptics, who are so often a major part of what we have here. I am therefore extremely grateful to the noble Lord, Lord Stevens, for his particular contribution. The sense in which we have a deep suspicion of everything that foreigners "do to Britain" is a very important part of the British debate. It has been rather underplayed today. In a week in which the noble Lord, Lord Pearson, has informed me that Christopher Booker wrote a very complimentary piece about me in the Sunday Telegraph, I miss their presence even more than usual. I also note the remarkably empty Conservative Benches. But I think that there is a different reason for that—the embarrassment of so many Conservative Members of this House at the current policy of their party on the European Union, which no doubt makes it easier for them to stay away from this as from a number of other debates.

The development of the presidency over the past 30 years has been one of the most interesting things in the European Union. I think that my wife was the first person to write something on the development of the Council presidency, which was happily followed by a number of very enjoyable conferences in countries that were due to take the presidency in six months' time or whenever. I particularly remember a conference in Dublin just before the first Irish presidency, about which, as some noble Lords may remember, Henry Kissinger said that he could not conceive having to discuss transatlantic relations with the Irish Foreign Minister, of all people. Garrett FitzGerald then conducted an extremely successful Irish presidency and took us towards the whole development of the way in which national governments share this role.

However, as a number of noble Lords have clearly said, the complexity of the presidency now is such that it would be entirely wrong for a national government to come in and attempt to hijack the agenda. As the noble Lords, Lord Maclennan and Lord Tomlinson, have said, it is a multi-annual programme which has to be set well in advance of each government taking over. The pattern for the second semester of 2005 is already set.

I am slightly puzzled that Her Majesty's Government have not taken more time to have a broader consultation on what they think the priorities should be. I recollect, 18 months ago, attending two conferences in the Netherlands in the run-up to the Dutch presidency in which the Dutch Government pulled in a number of people from other countries. It happens that those conferences were about Turkish entry and transatlantic relations. I should have thought that Her Majesty's Government might have wanted to generate a sense of collective enterprise rather more actively and rather more openly than their executive dominance and secretive style allow.

We can, however, hope that Ministers will lay particular emphasis on parts of the agenda—that they will attempt to narrow the gap between the grandiose rhetoric and the poor practical implementation which is one of the underlying weaknesses of the European Union; that they will engage in promoting a European Union-wide debate on what our shared priorities and choices should be; and that they will take this opportunity, as a number of noble Lords have said, to promote, at last, a more informed debate within the European Union.

It has been one of the greatest disappointments, even failures, of this Labour Government that we have had no consistent or coherent British policy towards European institutions. We have had six Europe Ministers since 1997. I think that that is about as many changes as we have had in any other office. With our presidential style of government, we have a European policy when the Prime Minister is focusing on it; but, as was often said in Paris under the later years of President Mitterand, "When the President is not well, France does not have a foreign policy". I sometimes fear that, when the Prime Minister's mind is on transatlantic relations or on the Middle East, we do not have a coherent European policy.

The position of the Foreign Secretary and the Foreign Office on European matters has been rather unclear. The European Secretariat in the Cabinet Office has attempted to hold things together—with some disquiet, as we have heard, since his resignation, from the former head of that secretariat, Sir Stephen Wall. The efficiency of the machine cannot compensate for the weakness of political leadership. We need a coherent British presidency and a collective presidency—the sort of thing that cabinet government, if we still had cabinet government, might be able to provide.

French presidencies of the European Union have, sadly, been among the most disastrous, often because the President and the Prime Minister could not entirely agree, as some noble Lords will remember happened at the Nice European Council. One could make a number of British comparisons with that.

First, we need a much more coherent domestic debate. We need Ministers from the Prime Minister downwards to explain and to educate, and to use the British presidency to do that. I entirely agree with the noble Lord, Lord Tomlinson, that the most important way to lead is not to talk about leading on the Continent but to lead here and to use the presidency for that, and to explain that this is a collective enterprise, not one against 24, as it used to be one against 14. It is not a zero-sum game in which the language is "Britain wins" or "Britain loses".

As to European priorities, it seems to me that there are a number that we should ask the Government to emphasise. I say to the noble Lord, Lord Grenfell, that breathing life into the role of national parliaments which is promised in the new constitutional treaty, and about which the Prime Minister used to enthuse, is a very important matter and something that we could do. The British meeting of COSAC could become an opportunity for that.

A number of us here are veterans of COSAC meetings. We bear the scars, have enjoyed the food and have been bored out of our minds by the poor content of the consultations. I am told by some that the meetings are getting a little bit better and a little bit more constructive. However, Her Majesty's Government could come forward to this Parliament with proposals on how we should be more actively and collectively engaged in the process of following European developments. Perhaps the Prime Minister or others could also address other parliaments about how the strengthened role of national parliaments could be developed.

A number of Members have talked about the Lisbon agenda. I regret that our Chancellor so often talks about America as the land of enterprise and the Continent as offering security. The Lisbon agenda, after all, is about striking the right balance between enterprise and welfare—between enterprise and happiness, as the noble Lord, Lord Layard, so often puts it—in which the American model is not the complete answer. But we have to find ways of making Europe and the European continent rather more open to competition. I hope that the Government will not shrink from robust criticism of the failings of others in this regard, in particular of the German Government, the Italians, the Greeks and the French.

I strongly support again what the noble Lord, Lord Grenfell, said about pushing for aviation taxes. My party is particularly convinced of the need for common policies on environmental matters. That clearly is something which we cannot do on our own as a national policy. I also strongly agree with him on the importance of taking further the five-year Hague programme. I think that there must be a couple of dozen of us who know what the five-year Hague programme is about. There is a good deal of room for public education on why anti-terrorism, trans-national crime, drug smuggling and people smuggling require more effective common European action in Britain's national interests.

Above all, I hope that Her Majesty's Government will stress the importance of external relations and a common foreign policy as a higher priority for Europe. This has been the area where, most of all, there has been a gap between grandiloquent rhetoric and poor implementation and where our Prime Minister's major speeches on foreign policy have either been in Britain or in the United States rather than on the European continent. There is a great deal to do: our relations with Russia, redefining the relationship with the US, breathing new life into the Barcelona process, talking about democracy promotion and, as the right reverend prelate the Bishop of Oxford said, making a more coh erent approach to the developed world than we get from one bit of the Commission negotiating one set of issues and others negotiating others.

Most of all, however, we should not oversell the British role or British singularity. European integration is a partnership based on shared interests. The British presidency should reflect that rather than the outdated English rhetoric of "us versus them".

7.21 p.m.

Baroness Rawlings

My Lords, I too am grateful to the noble Lord, Lord Dykes, for introducing this important debate today. It is always a privilege to contribute to these impressive debates. I feel very humble replying from these Benches after a list of many well-informed and distinguished speakers, with understandably strong feelings and strongly held opinions, as we heard in the detailed speech of my noble friend Lord Stevens regarding the constitution, which I shall not touch on today.

With the parallel presidency of both the European Union and the G8 falling to the UK, 2005 offers us a unique opportunity to drive forward the reforms in both institutions that are vital if those institutions are successfully to adapt to the changing geopolitical climate, the demands of the 21st century and the consequences of enlargement. I am sorry that so many noble Lords on the Benches opposite seem to think the Government will not be able to achieve much during the British presidency. I well remember a successful presidency under Prime Minister John Major and the Conservatives.

The Government seem to have failed to recognise the challenges that face the European Union.

Lord Tomlinson

My Lords, I will be very quick. The noble Baroness refers to the successful presidency under John Major. Was that not the Edinburgh summit, when the British Government conceded that not only should the European Parliament meet in Brussels, but Strasbourg should also be kept going, which is one of the biggest waste factors we have seen?

Baroness Rawlings

My Lords, I would love to debate that further, as I feel quite strongly about it, but this is not the time. What a shame. Another time.

The European Union has instead attempted to centralise more, to forge Europe into a new bloc, when the era of blocs may well be over. Regrettably, this has continued to make the EU even more remote from the citizens of its member states. I shall return to this later. The priorities set out at Laeken have yet to be seriously addressed, and the Lisbon agenda, as mentioned by the noble Lord, Lord Watson, central to the future economic direction of the EU, has been half-heartedly and haphazardly pursued and implemented.

It is worth remembering what the citizens of member states expect from the EU, and what it exists to do. It was never meant to interfere in the day-to-day lives of citizens. The founders' aims were to create stability and security in Europe, and to generate the economic prosperity for member states and their citizens. The noble Baroness, Lady Royall, drew the House's attention to the fact that the EU has been successful in helping to create political stability within Europe. It has also broadened the base of prosperity to levels unknown within Europe in previous centuries.

We should not forget the fact that many new members have recently joined, and that others in Europe are aspirant members. This is surely a testament to the European Union's success, and, consequently, the appeal of membership. The prospect of joining has proved an important spur to major reforms in many countries. Bulgaria, for example, as mentioned by the noble Lord, Lord Tomlinson, is well along the road to membership, while Turkey has made impressive reformist strides. If she holds firm to the course she has set and retains the secularism, particularly in education, that is at the heart of her constitution, we look forward to welcoming Turkey into the EU in the future, as we heard from the noble Lord, Lord Grenfell

However, while successful in securing a stable and secure continent, the EU has, regrettably, proved less successful at creating a competitive economy, able to compete in today's tough global economic environment. Enlargement has been successful, and is very important, but it has also served to bring into sharp relief the economic and structural challenges facing the EU today—challenges we will have to address during the British presidency.

We have long argued that one of the key ways in which the EU can he made more relevant to people is more clearly to deliver economic benefits. Europe remains far too reliant upon an expensive, high-tax, high-regulation, outdated social model, which, in an age of tough global competition, is quite simply holding Europe back. Every day additional regulations flow from Council meetings in Brussels. More often than not, they tend to strangle business and our ability to be globally competitive.

Lord Lea of Crondall

My Lords, with her critique of the European social model, could the noble Baroness remind the House whether it is the euro area that has devalued by 20 per cent in the last year, or the dollar?

Baroness Rawlings

My Lords, I was talking about regulations, not currencies. That is a different argument, like the one I will have later with the noble Lord, Lord Tomlinson.

It cannot be disputed that the pursuit of common-sense reform designed to promote deregulation is an urgent priority if the EU is to meet today's challenges. I beg to differ here with the noble Baroness, Lady Royall, on one point in her very good speech. We were always brought up on mutual recognition rather than straight harmonisation for success in the market. I would add to this list the need for the growth and stability pact to be adhered to by all its member countries, large and small alike, if it is to mean anything.

Enlargement continues to place strains upon the EU's finances, largely due to the workings of the structural and regional funds distribution system, the common agricultural policy and the failure to achieve long-term reform. Is it not time the Government realised that what we have been saying for so long is correct? This could be our moment, while holding the presidency. to revisit and radically reform the basis of the EU finance as well as the CAP, as mentioned by the right reverend Prelate the Bishop of Oxford in his wide-ranging speech that also covered aid, trade and, importantly, trade justice.

I wonder whether, at this late stage, I might add a small idea arising from our recent debates in this House regarding the Immunities and Privileges Bill—soon to be debated in the other place—especially as the noble Lord, Lord Triesman, was so helpful during the Bill's passage. This was mentioned too by the noble Lord, Lord Wallace of Saltaire. Our debates stressed the need to support the necessary reforms so that this outdated treaty, drawn up in the 1960s in a different geopolitical climate, should be placed on the agenda for discussion for reform during our presidency.

I support the noble Lord, Lord Maclennan, in drawing attention to the election in Togo, and the plight of the brave and remarkable man, Gill Olympio. In Europe, we find ourselves and our continent at a crossroads. With the presidency of the European Union, the United Kingdom has a unique opportunity to shape its future direction and drive forward reform. The only way in which that can be achieved is by distributing serious information and involving as many people from as many walks of life as possible.

This reminds me of an old Chinese proverb, which goes, "Tell me and I'll forget, show me and I may remember, involve me and I'll understand". We hope that the Minister will be able to tell the House that this Government will ensure that 2005 is the year of genuine understanding and EU reform, thus creating a successful partnership for the 21st century.

7.30 p.m.

Lord Triesman

My Lords, I thank the noble Lord, Lord Dykes, for introducing the debate, and all other noble Lords who have taken part tonight. Almost all of them have very distinguished records in their roles in Europe and many, like the noble Lord, Lord Dykes, have had major honours awarded in Europe. I am also grateful for the occasional Chinese proverb to set me on my way in the course of an evening.

I am delighted that the United Kingdom will assume the presidency on 1 July. 1 t will be the first time that we take the lead in an EU of 25 member states, following the welcome accession of the 10 new countries last year. As all noble Lords have made clear, there will be a lot of business for the United Kingdom to take forward with our new and old partners. I hope that I shall address some of the crucial points and do not miss too many of them.

The Government will look to deliver progress right across the EU agenda by running an effective, impartial and business-like presidency. We are working closely with Luxembourg, as the current presidency—and I share the congratulations of the noble Lord, Lord Dykes, on what Luxembourg has done—and with Austria, who will take on the presidency after us. I guess that Austria will be up for it again in 2018, if I have my sums right. We want to ensure continuity.

The noble Lord, Lord 'Tomlinson, is certainly right in recognising the scope and scale of what we may need to do and the need, too, to be serious and modest about the amount that we can do—not because we lack ambition but because six months is a short time and some pretty big things must be done. We shall focus first and foremost on the EU agenda that we inherit from the Luxembourg presidency, including the negotiation for the next EU financial framework, if necessary. We have played a key part in shaping the agenda and it is positive for the United Kingdom. The EU is moving in the right direction, delivering on the issues that matter to people: jobs, security, and promoting peace and prosperity globally, as well as at home.

At this point, I thank the noble Lord, Lord Grenfell, for the work of his committee, which he introduced with objectivity and to the great benefit of your Lordships' House. He is right to say that the long-term strategic thinking that he demands is essential, and I have no doubt that we shall want to do much more on that. I confirm here tonight that opportunities for detailed scrutiny will be available, and his detailed questions will be answered so that the committee's work can proceed in timely manner. I know that the noble Baroness, Lady Rawlings, was keen that that should be the case, as she was in saying that the presidency should take forward and promote, as the EU has always intended, security, stability and sustainable prosperity.

The Prime Minister is also committed to using the opportunity offered by our twin presidencies of the EU and the G8 group of industrialised nations to make real progress to address the real-life concerns of poverty in Africa and environmental concerns for us all, such as climate change. Addressing climate change will have an impact on all of us far beyond the boundaries of the EU. As our understanding of the issue changes, we will want to ensure that we will be dealing with it with our partners.

The Commission for Africa will report in a few days. We expect it to put forward a comprehensive and challenging set of proposals, driven by the needs and plans of African governments and people themselves. It should give us a chance to put Africa back at the top of the international agenda. Our presidency will be an opportunity for us to take the lead on an EU agenda that reflects the interests of the United Kingdom and the future of all EU citizens. The EU's economic reform programme is designed to create jobs here and throughout the EU, which is always the best form of social protection and the best way to lift people out of poverty. A number of noble Lords, such as the noble Lords, Lord Tomlinson and Lord Wallace, and the noble Baroness, Lady Rawlings, have made points about the importance of doing that work publicly.

I also want to tell my noble friend Lady Royall that we shall of course be supportive of the constitution and shall want to ensure that it is discussed fully during the period of our presidency. The Foreign and Commonwealth Office is leading a programme of activities on the EU and facts about the constitutional committee, which is managed in-house with support from external agencies. The new constitution and the new Commission itself have to recognise that there is a great distance between the EU and its peoples. We need to overcome that to achieve far greater levels of understanding.

It is at this point that I must confess that I cannot agree with what the noble Lord, Lord Stevens, said about these matters, which will not surprise him. I do not believe that we are seeing the birth certificate of the United States of Europe. We control our own borders and our economy, security and foreign policy. As on other occasions, I can tell the House that when we can work together with everyone else, it would be foolish not to do so. But when our interests are absolutely distinctive, our path will be our path. We should not, then, have a catalogue of fear in that regard; it would be a great pity if we were to do so.

Throughout our presidency we shall work closely with the Commission, the European Parliament and our EU partners. I hope that through holding the presidency we shall be able better to explain these institutions, as I have said. Few people know about the powers of the newly democratically elected European Parliament. Now that we have a new Commission under Jose Manuel Barroso, which has set out its programme for the next few years, underlining its main priority in terms of economic reform, we have the best chance to advance that case.

If our presidency can dispel the idea that it is Brussels that tells us what to do, as if we did not have a hand in decision-making and were not in any way party to it, that will be a very welcome development. I hope that our presidency will demonstrate the breadth and depth of our interdependence with the rest of the EU and the practical benefits brought about by membership. The EU is already a big part of our lives, delivering day-to-day benefits to United Kingdom consumers, be it through cheaper phone calls, lower air fares or cleaner beaches, or many issues of security in the world. It is in many parts of our lives. Whether in agricultural or other respects, as the noble Lord, Lord Watson, said, the EU will have to take into account the diversity in those respects and therefore have a fine-grained approach as well.

Reducing the barriers to trade and free movement within the Union has been the EU's greatest single driver of economic growth, job creation and productivity. But barriers remain to the free movement of workers, goods, capital and especially services in some areas. It is therefore important for us to push harder for real delivery on economic and regulatory reform. As president of the European Council we shall take that work forward. We welcome the report published by the Commission on 2 February which demonstrated the new Commission's commitment to delivering growth and jobs for EU citizens. As I have said, jobs are the best form of social protection. My noble friend Lady Royall made exactly the same point. In that light, it is right to say that we would not accept the imposition of any single tax, and I can tell the House that we would not accept the imposition of what we would regard as an unacceptable budget—that is, above 1 per cent, including our abatement. I add that in case there are any doubts about the matter.

We shall work to ensure that before legislation is proposed the EU has made a full assessment of its impact on business and international competitiveness, and that those impact assessments are then acted upon to reduce the burdens on business. We shall want to continue the work of the Commission to identify legislation ripe for repeal or simplification. My noble friend Lord Tomlinson will probably get his wish. No regulation is ever written in indelible ink. Something is always possible. Growth and stability are among the areas where it is always worth ensuring that we stick to the rules and do not vary them, as the noble Baroness, Lady Rawlings, said. But no regulation is ever beyond further scrutiny. I welcome the promise made by the noble Lord, Lord Grenfell, on further scrutiny of the regulatory matters, too.

We want to build on the work done by the Dutch and Luxembourg presidencies on the services directive. The noble Lord, Lord Dykes, asked me to confirm that we were still working on it, which is the case. The proposal aims to open up trade in services across the EU. Services account for an estimated 70 per cent of GDP of the EU, but only 20 per cent of intra-EU trade. By extending the external market to services, we hope that the measure will have far greater and lasting effect. We want to ensure that the remaining dossiers in the financial services action plan are adopted efficiently in a form that protects and promotes the competitiveness in financial services of the UK and the EU; again, the noble Lord, Lord Dykes, made that point.

We will take forward the debate on post-FSAP agendas, with a focus on implementation and effectiveness in existing legislation, and in line with the views of the major stakeholders. We will work with the Commission to ensure that legislative proposals are brought forward once they fully meet better regulation tests. I agree with my noble friend Lady Royall that more consistency across those tests would be helpful.

The right reverend Prelate the Bishop of Oxford, the noble Baroness, Lady Rawlings, and others mentioned reform of the CAP. There is obviously general support for greater reform and greater movement. During the presidency, the EU sugar regime is the next element in the ongoing process of radical reform. It is likely to fall within our presidency to complete its reform. We want to achieve consensus among partners that sees a reduction in the price of sugar for consumers and manufacturers, and a consensus on the market-based liberalising reform in line with the changes already agreed.

I entirely understand the right reverend Prelate's points about free trade in that area, as in many others. It is clear that the whole process of economic partnerships and liberalisation, driven by the WTO as much as anything else, will be asymmetric. Time frames will be needed to make sure that people can adjust in a way that is practical and realistic, given the circumstances from which they start. However, it would be hard to say that the process as a whole is unlikely to go ahead or would not involve reciprocity. No partnership is mandatory. I have no doubt that bilateral arrangements will continue to exist, in ways that I hope are favourable.

The Doha development agenda will also be a major reason for a ministerial trade meeting in Hong Kong, in which we will take a full part. I do not want to add greatly to what I have already said on Africa, but we have made it clear that it is a priority for us in the EU and the G8. The Commission for Africa, in its report on Monday, will want to take forward the recommendations of our EU partners on aid, trade and peacekeeping.

In the area of development, which is so important to this House, we will represent the EU through the Prime Minister at the UN millennium summit in September. The EU is the largest world provider of development assistance. We will continue to work with our European partners to ensure that the EU provides the leadership and the quantity and quality of aid needed to tackle global poverty, and to achieve the millennium development goals.

The whole issue of the environment and sustainable development—also mentioned by the right reverend Prelate to great effect—will be essential to the meetings that we hold during the presidency, aiming for political agreement across the whole agenda, including on the vital new chemicals strategy. In the course of that, I cannot believe that we would do other than urge on other nations in the EU—as on nations throughout the world—the same approach to debt in relation to the poorest countries.

I will not dwell extensively on climate change, because we have said repeatedly in this House that it will be a major focus of our presidency, and of the presidency of the G8. I shall add one thought in response to questions that have arisen this evening. It is obviously important to develop the work that we have done through the Kyoto process, but it is also true that a key nation with which we have a close relationship—the United States—is not party to it. In those circumstances, we must do all that we can to ensure consistent discussion with the United States, looking for a new approach across the problems. That issue cannot and will not go away.

The relationship with the United States was raised by many speakers, including the noble Lords, Lord Watson and Lord Dykes. It is very important. We want to build on the value of the transatlantic agenda. In particular, we will seek areas of concrete cooperation and action with the United States, building on the successful visit of President Bush to Europe last month. In his speech on 21 February, he was clear that he wanted a new approach to partnership as well. Across Europe, we must seize the opportunity and not let it slip at this vital moment.

All that is also about security and stability. Twenty-five countries working together can contribute to stability and prosperity in an increasingly globalised world. Security and prosperity are linked. We can create better and safer lives for the citizens of the EU and others by working to reduce poverty. That is why I am proud that the EU—not just us, but the EU—is the largest contributor to aid. We should see ourselves in that context, as part of it.

The justice and home affairs agenda will be carried forward in the EU's counter-terrorism action plan and the Hague justice and home affairs work programme, particularly to meet the negotiating deadlines on key measures such as the European evidence warrant and data retention. We want to see the completion of the strategy on radicalisation and recruitment by terrorist organisations, and progress towards increasing the security of EU travel documents. With the European security and defence programme, we have seen the first EU rapid-reaction battle groups coming on stream, a civilian headline goal being developed, and the European Defence Agency starting to work properly in 2005. We want to work with partners to make sure that all those developments take place.

The issue raised by the noble Lord, Lord Grenfell, on Turkey is very important. We will work to ensure the successful launch of accession negotiations with Turkey on 3 October. I am not certain when, but the documents will be available to his committee as soon as possible. I hope that some will be available well before 3 October. It is an important step overall for the European Union. It is obviously important economically, and it is important to bring another nation into the family of more stable and prosperous nations with greater respect for human rights. It is enormously important because it will show that we can have a secular state in our Community with a majority-Muslim population. That is no small matter in global historical terms.

Having seen the disturbing television footage of the demonstration in Turkey a few days ago, however, my honourable friend in another place, Denis MacShane, has made known directly the disquiet we feel about how that demonstration was handled and how it reflects on human rights issues. Announcements have been made in Turkey of action in connection with any of those against whom it can be proved that violent oppression occurred. That is probably a helpful step in a rather unhappy circumstance.

There has been a huge amount of work across the European neighbourhood policy on Iraq, work by the quartet—including the EU—on the peace process in the Middle East, work on Iran, and work on the western Balkans where the EU is a decisive factor in bringing stability and peace. I could not address all those points tonight. but I want to say to my noble friend Lady Royall that there is not widespread evidence of gold-plating in this country. The guidance issued by Whitehall departments on EU directives stresses the importance of avoiding it, and we will continue to do so.

I shall try to reassure the noble Lord, Lord Maclennan, on Togo. With our EU colleagues, we were quick to condemn on 5 February the unconstitutional actions in Togo following the death of its last president, which led to his son being installed as president. We applaud the decision that he should step down and call for presidential elections as set out in the constitution, and we want free, fair and open elections in which all the appropriate candidates are able to run for election to the government of that country and its presidency. If more detail is needed, I will happily provide it.

I say to the right reverend Prelate that there is much more to be done on banking co-operation. I am convinced that we will do it. As he says, aid in our country is not tied to commercial considerations. We will urge others to take the same view.

I can tell my noble friend Lord Tomlinson that we will work hard to ensure that the further borders of the new Europe are properly maintained. Wider membership should ensure that we have closer collaboration on crucial cross-border issues—drugs, illegal immigration and people trafficking. But it is plain that we will have to address that with detailed care, given the extent to which those borders now go.

I shall write to the noble Lord, Lord Russell-Johnston, on the WEU Parliamentary Assembly, because there is much to be said and I would not manage that successfully this evening. I apologise for that.

Regarding the points made by my noble friend Lord Lea of Crondall, on the agency workers directive, the services directive is under discussion. This is an early moment in that discussion, but we must ensure that it emerges at the end of that to be in line with fundamental protections, including those relating to the rights of contract workers, covered in the Temporary Agency Workers Directive. Those remain our firm objectives.

I apologise if I have missed points that have been raised. It has been a wide-ranging debate on a large issue. Most of all, I want to say to noble Lords who have taken part in this fine debate that it is essential for us that the people of our country are involved in these debates. It is essential for us that our Parliament is involved in these debates. If we carry matters forward in detail, we must ensure that both Houses of Parliament have that opportunity. The Foreign and Commonwealth Office will publish a White Paper on the presidency in June, which my right honourable friend Jack Straw hopes to launch with a Statement.

The Government look forward to briefing the Foreign Affairs Committee and the European Scrutiny Committee on their intentions. If that process is to be successful, in my view, it is vital that the views of all noble Lords are fed into the process. These are not closed loops in which a few of the cognoscenti take part. If we are serious that we want everyone to take part, let us show some evidence that we do—as we have this evening—because I believe that that is the way to the healthiest debate that we can achieve.

7.52 p.m.

Lord Dykes

My Lords, while sympathising with the bizarre and peculiar isolation of the noble Baroness, Lady Rawlings, and the noble Lord, Lord Stephens, in their arguments—although the noble Baroness tried to be broader in her approach—the other contributions have been first-class and I, as the initiator of this debate, am particularly grateful for that and for the replies given by the noble Lord, Lord Triesman. Even when he is reading many points from a ministerial brief, he gives me the impression of being an enthusiastic European and I hope that I do not cause him any embarrassment in his distinguished career by saying that. As a result of this multi-faceted debate, which has covered so many points, I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.