DEVELOPMENTS IN THE EEC APRIL-OCTOBER 1975

HL Deb 20 January 1976 vol 367 cc420-57

6.5 p.m.

Lord GORONWY-ROBERTS rose to move, That this House takes note of the White Paper Developments in the European Communities April-October1975 (Cmnd. 6349). The noble Lord said: My Lords, I beg to move the last of the two Motions standing in my name on the Order Paper. The Report which we are debating today was published in November last and covers the period April to November 1975 in accordance with the Government's acceptance of the recommendation that it should report to Parliament on EEC matters every six months. For us and, indeed, for the Community the key event in the period under review was the referendum last June. With the referendum behind us, we have been playing a full part in the activities of the Community.

With the referendum there came a change of gear in our handling of Community matters. No longer were we faced with the prospect that immediate short-term successes or failures would be used in argument on one side or the other to show that membership was good or bad for Britain. It made it easier for us to concentrate on a longer time-scale, operating on the basis of massive popular endorsement for our permanent membership. We have followed and will continue to follow a carefully considered and balanced policy, neither dragging our feet nor rushing into agreements which might prove to be unsatisfactory.

We intend ourselves to take carefully considered initiatives in order to improve the working of the Community and, where appropriate, to extend the area of co-operation between the Member-States. I will refer later to our initiative on the improvement of financial control. In all the matters we handle in the Community we think it better to build well than to build hastily. Equally, we are looking for the sound policy rather than the quick return. Whenever it is necessary we shall not hesitate to criticise proposals for Community legislation and to press for changes, even if that causes some disappointment at the failure to meet a real or imaginary deadline.

There are two particular areas of activity in which the Community looms very large. They are external trade relations and agriculture, both of which are areas in which policy is now conducted very largely at the Community level. In other areas reported on in the White Paper, such as industry, environment, transport or education, activity at the Community level forms so far only a very small part of the responsibilities exercised by the Government, and these I do not propose to deal extensively with in this speech, though I will, of course, try to answer any points raised in the debate when I come to wind up.

If I may speak first of external relations, the six month period under review saw considerable activity. There can be few people, if any, who still think that the Community is inward looking. One has only to look at the agendas of the Councils of Ministers (Foreign Affairs) to see the number of areas in which the Community is striving to improve and develop its economic relations with other countries and organisations. Similarly, the increasing number of areas in which the Nine co-ordinate their foreign policies under the political co-operation arrangement demonstrates a very encouraging trend.

The Government strongly welcome this trend which shows a will to achieve greater co-ordination of foreign policies as well as a desire to improve our understanding of the preoccupations of others outside the Community. May I give one or two specific examples. The most striking example of the Community's openness to the outside world was perhaps the success of the Community at the Seventh Special Session of the United Nations.

This success was achieved not just because the Community had maintained its unity, but also because we adopted a policy of consultation and co-operation which had previously been shown to such good effect in the negotiations for the Lomé Convention. The signature of the Lomé Convention did not mean that contact and consultation ended there. The Convention itself, which I am happy to announce the United Kingdom ratified at the end of 1975, will provide for frequent consultation and discussion between both parties. These consultations will be carried on not only at Government or official level, but also by means of direct contact between Parliamentarians from both Europe and the developing countries concerned—a point which I think my noble friend Lord Davies of Leek is particularly interested in and active about.

The period under review also saw, for example, close co-ordination of the Nine's policies towards Portugal. The Community has shown a genuine willingness to take account of the situation in Portugal and the democratically expressed wishes of the Portuguese people. Following the visit of Sr. Antunes to Brussels at the time of the October Foreign Affairs Council, there has been progress in the discussions of the development of the EEC-Portugal Free Trade Agreement.

In the Euro-Arab Dialogue, which is conducted through the political co-operation machinery because it extends over a number of areas which do not fall within the coverage of the EEC Treaties, we have ensured full co-ordination with Community policies in Brussels. Some Arab countries already have formal relations with the Community through the LoméConvention, and the Community is negotiating other agreements under an overall Mediterranean policy as described in the White Paper. A meeting of experts in Abu Dhabi in November made considerable progress towards finding areas of possible mutually beneficial co-operation: for example, industrialisation, infrastructure, agriculture and rural development in the Arab world.

Another country in the Mediterranean area has already made an application to join the Community; that is to say, Greece. This application was welcomed by the British Government and we look forward to seeing the result of the Commission's detailed consideration of the Greek application. There will inevitably be a number of technical discussions to be carried out covering both the agriculture and the economic situation before the Community and Greece will be able to reach agreement on this further enlargement of the Community. But I am confident that when the details have been hammered out and Greece, as the noble Baroness said, is ready to join, the Community will welcome her membership. This is by no means an exhaustive list of areas where real progress has been made in political co-operation and the development of the Community's external relations. It is not easy to establish common positions, to balance the interests of Member-States, the Community's interests, and the interests of other countries. This is a very long process, as we heard in a previous debate this afternoon, in a speech made by my noble friend Lord Gordon-Walker. Here, as in the interior of the Community, unity does not mean uniformity, and inevitably vital national interests arise and have to be defended from time to time. This country is allowed, I hope, from time to time to have regard to its own national interests and to stand up for them. But the six months under review have shown that we are embarked on the right road. The Government welcome the fact that in his report on European Union (to which I shall refer again later) M. Tindemans emphasises the need for the Community to be outward looking.

I turn now to the Community's internal policies. In the agricultural field, the Government contributed actively to the stocktaking of the agricultural policy. This was originally a German initiative, I suppose, and certainly the United Kingdom contributed substantially to the promotion of what we now call the stocktaking of this policy. Our aim throughout these discussions has been to improve the operation of the common agricultural policy, in particular by ensuring better market balance and prices geared to the needs of the modern and efficient farm, avoiding the creation of unnecessary surpluses and waste—mountainsand lakes, about which I do not need to go into scarifying detail. Of course, these changes cannot be secured at once. But discussions on the stocktaking will influence the conduct of this year's farm price review.

In the economic field, the White Paper shows that the Community, in the face of the persistent world economic recession, has undertaken to co-ordinate action in the attempt to fight inflation and unemployment. The Community has yet to find a distinctive rôle in the industrial field, but ideas are being discussed, and in particular the Commission's report on the aircraft industry is being closely studied. This autumn also saw the first allocations from the Regional Development Fund, and by the end of last year the United Kingdom had taken un its full quota, to an amount of £35.9 million.

To turn to the institutions and structure of the Community, we are all aware that during the period under review M. Tindemans completed the consultations which he had been carrying out throughout1975 with Member Governments and others with a view to submitting a report on what is called European Union. M. Tindemans presented his report before the end of the year, and its recommendations are now being actively studied in the various Member-States of the Community, with a view to their possible discussion at the next meeting of the European Council, probably in March. Noble Lords will not expect me to comment in any detail on these proposals. I can say, however, that we welcome the realistic approach which M. Tindemans has shown and in particular his proposal that we should build on the basis of the existing institutional structure, which has been accepted by the Parliaments in all the Member-States.

The other major institutional development during the period was the continuing discussion of the introduction of direct elections to the European Parliament in line with the commitment in Article 138, paragraph 3 of the Treaty of Rome. At the European Council meeting in Rome at the beginning of December Heads of Government agreed that direct elections should take place on a single date in May or June 1978, but that any Member-States which was unable to meet that deadline would be allowed to continue for the time being to nominate its representatives in the Parliament as it does at present; and perhaps I might make it clear in passing that there was no suggestion that in our case this should exclude Members of this House, who have served this Parliament and the European Parliament so well. The Prime Minister made it clear that the Government required more time for further consultations in this country before we could agree to a precise date by which we could commit ourselves to hold the first direct election. Since then work has begun in the Council machinery on the text of the draft Convention on direct elections. It is hoped that this will be finalised by Heads of Government at the next meeting of the European Council in March.

My Lords, in parallel with the work going on within the Community institutions, the Government will be engaging in the consultations to which the right honourable Gentleman the Prime Minister referred in Rome. The Government will shortly be putting forward a paper containing their proposals as a basis for these consultations. I know that some noble Lords believe it is a matter of regret that the Government have not felt able to indicate at this stage that they can accept the 1978 deadline, but I would assure those noble Lords that if it is possible in the event to meet this deadline then we shall do all in our power to do so. As the Foreign and Commonwealth Secretary has said in another place, if Parliament so wills, it should be possible to do so. I feel sure that the House will recognise that the Government could not have taken upon themselves the decision to introduce direct elections by a specific deadline without having had full consultations with political Parties in Parliament and outside and with Party political organisations. In this, our situation may differ from that in other Member-States where consensus views may already be known. The original Member-States already have had a good many years to consider the questions involved.

My Lords, before I conclude I should like to mention one area of institutional development in which the British Government have played a particularly leading role. On the basis of proposals put forward by the Prime Minister and by the German Government, the European Council, meeting in Rome last month, agreed that the Council of Ministers should be asked to carry forward an examination of a number of suggestions which should lead to a considerable improvement in the Community's mechanisms for controlling expenditure. We have already discussed this important matter today in this noble House, and I need not dwell upon it. These ideas were fully developed in the White Paper on financial control, published in early December.

I would just add that it is the hope of the Government that the proposed Public Accounts Committee will offer the Euro- pean Parliament a real job to do in monitoring expenditure over a wide range of Community policies. I hope that this will soon be fully operational and ready to assume the role suggested by the European Council, including monitoring the report which will be produced by the European court of auditors to be established under the treaty of 22nd July, which was the subject of the earlier debate today.

My Lords, the period under review shows a steady and regular development in the activities of the Community, both internally and externally. I welcome the opportunity of the debate today to hear the views of the House on the developments of the last six months. I hope we may all learn from the experience of the last six months, how we should proceed in the next six months and, indeed, in the years to come. My Lords, I beg to move.

Moved, That this House takes note of the White Paper Developments in the European Communities April-October 1975 (Cmnd. 6349).—(Lord Goronwy-Roberts.)

6.24 p.m.

Baroness ELLES

My Lords, we have spent some time this afternoon in discussing sonic of the "nuts and bolts" of the Community, and it is right that we should now have a further opportunity of discussing matters on a much wider and broader basis, and of taking into account the report of Her Majesty's Government on Developments in the European Communities up to October 1975. This also gives us an opportunity, which the noble Lord the Minister himself has used, to take advantage of this report and to speak not only of matters which have occurred within the past six months but also of on-going matters since October. As the noble Lord the Minister rightly says, this gives us an opportunity to see in which direction we are going. It is clear that we are not all going to speak on every item in the report, although I think every item in the report deserves discussion; they all, in fact, raise extremely important matters for the United Kingdom. The noble Lord the Minister confined himself to certain areas which he considered to be of particular interest to your Lordships. I will try to do the same, although the areas I am going to talk about may not be quite the same as were touched on by the Minister.

We are all agreed that the success story for the United Kingdom in 1975 was undoubtedly the good sense of the British people, which was able to find expression in the satisfactory results of the Referendum, when over 67 per cent. voted in favour of remaining within the European Economic Community. The Referendum confirmed the views expressed in Parliament both in 1975 and in 1972, and the results were well received by the other eight Member States. However, I think it is fair to comment that the whole process of renegotiation and the Referendum did considerable harm to our relations with the other Member States. The holding-up of proper, progressive development, the inability to take any political decisions of importance on the elaboration of regional community policies in so many areas of national and international life, and even the psychological effect on personnel in the different institutions of the Community, and the insecurity, all contributed to make the months leading up to the Referendum a painful experience for all Member States.

We now realise that this is past history. I hope we can bury this past history and go forward in a more constructive spirit. But it is fair to comment, particularly for those of us in European institutions, that that period was an extraordinarily difficult one. I would pay tribute particularly to the many British subjects employed in the institutions who, during that particular period, went through a very painful situation in relation to both their colleagues and the security of their own jobs. It is fair comment to pay tribute to them, and to the way in which they passed through that difficult period.

Having passed the Referendum, however, I must regretfully say that there appears to be no resurgence of a spirit of co-operation. The hopeful words of the Prime Minister in the statement of 9th June 1975, that the Government would give a lead in working together to play a full and constructive part in all Community policies and activities, were not borne out, regretfully, by later facts. The reluctance of the Foreign Secretary to take part in the energy conference in Paris as one of the Members of the Community in full co-operation with our eight colleagues in other Member States, and the insistence on the fixing of a floor price for oil—and, indeed, we may wonder how relevant it really is—did not enhance the standing of the United Kingdom, either in European or anywhere else. Apart from this unhappy episode, the political co-operation of the Nine has made the promised advance. We recognise this, and possibly for the first time acting together at the United Nations, gave added strength to the voice of the European member States.

As the noble Lord the Minister has already said, the successful outcome of the Seventh Special Session of the United Nations General Assembly in September 1975 was due, in no small measure, to co-operation and co-ordination between the leading Western industrial countries. Here I wish to pay tribute to the Italian Presidency. I remember reading at the time the speech of Sr. Rumor, on behalf of the European Community, at the special session in the General Assembly. It was a remarkable speech which expressed the views and feelings of the citizens of the Nine very clearly and very well.

I would say just a word about agriculture, since the noble Lord the Minister referred to it. I should like to repeat, as has so often been repeated in all the arguments, the dangers of exaggerating what have been so graphically termed, "mountains" and "lakes". It has to be remembered that the responsibility of the Community in providing sufficient food for 250 million people—and it is inevitable, if you are going to provide any single item sufficient to feed 250 million people —is not going to be exactly "peanuts". As I understand it, and I am subject to correction, never has there been more than three weeks' stock of any agricultural product, however big the "mountains" or large the "lakes ". I will lust draw attention, which I do not think the Minister did—although I may not have heard him do so—to the enormous amount of food aid the Community has been able to give to other parts of the world which have not had the benefit of such successful

When we talk of the agricultural stocktaking, we should in all fairness bear those agricultural policies or development as the Community's, two points in mind. Small improvements in progress should not go unnoticed. I would draw attention to the Directive to free the road and rail transport from quota and permit restrictions. This is undoubtedly of benefit to those sectors of the population who are involved in transport, and has an indirect effect on practically everybody in the country. In particular, I would draw attention to the Directive which bears on the free movement of doctors. I think these are both elements of the kind of ongoing activities of the Community which we welcome and which we recognise as part of the process of development in co-operation.

Section 11 on institutional matters contains two items having important consequencies, not only during the six months under review but also for the future, as the noble Lord so rightly said. The Government's views on the concept of European union, which were given to Mr. Tindemans during his visit at the end of June after the referendum, have not been published. Now that the Report itself has been published, we should at some stage like to be able to debate this matter, because the Tindemans Report contains some very important directions in which the Community may go, particularly on the two-tier system, which might vitally affect the future of this country, both within the country and within the context of the development of the European Community. I think it would be very valuable if we could have perhaps an Unstarred Question or a debate of some kind on this matter.

More particularly I come to the question of direct elections. At the moment we are realising only too clearly that the balance of powers between national regions and the State, and between the State and international regions, the powers to be reserved to each geographical unit and how they are to be exerted, will involve key decisions being taken. The implications of such decisions should be debated fully and their effects shown to the people, on whom responsibility will lie to elect their representatives. Of course, I am referring not only to attempted unification at the top, but a rather more sad attempt to dismember at the lower end of the constitutional scale. I think, therefore, that here again the public should be given very much more detailed information; for instance, as to the effect of direct elections, how they will be proposed, how they will be managed and the kind of programme the Government have in view as to implementation.

Although I appreciate the point the noble Lord made, that the Government will make every effort to follow a timetable leading to direct elections in May 1978, it is fair to point out that the Patijn Report, adopted by the European Parliament, was available at the end of June or beginning of July last year, and we must really wonder what has happened in the last six or seven months. It would indeed have been helpful if at least a Green Paper had been put forward as a basis of discussion, without in any way committing the Government. I have always thought that the process of a Green Paper is one of the most useful things a Government can do to put to the people fairly and objectively the difficulties, the objectives, the hazards and the possible consequences of a policy which ultimately is for the benefit of this country. I would ask, particularly in view of the Prime Minister's letter published in today's Times relating to direct elections, that we might have more detailed information as to the development of the programme which will lead us towards direct elections. I would very much hope that in this area at least we shall not prove lacking in our relations with other Member-States.

Finally, my Lords, if the countries of the Western World are to continue to live in freedom and to remain strong in their resolve to retain their democracies and existing civilisation, much more hard work will need to be done in willing cooperation with our partners in Europe. The mechanisms are there; they are being developed. The possibilities are there. It is for the Government to lead and show that the political will is also there. Initiatives to co-operate in energy, industrial, and particularly foreign policies are all to be encouraged. I think we might remember the words of Gaston Thorn, the new President of the Council, and take note of what he said, that States should be encouraged to control the propensity to magnify national interests to the detriment of the common European interest.

6.36 p.m.

Lord BANKS

My Lords, the White Paper we are now considering is somewhat out of date, because the Rome Summit, the unfortunate argument about representation at the Conference on Energy and other matters, and the publication of the Tindemans Report have all taken place since the period under review. The report itself is a fairly routine report, although it has many interesting and important items in it, as the noble Baroness, Lady Elles, has already made clear. It has no great leap forward to report. however. I think that perhaps the most significant event which is recorded as happening within that period was the coming, into force of the trade provisions of the Lomé Convention on 1st July.

Of course, the most important item in terms of British national interest was, as the noble Lord, Lord Goronwy-Roberts, said, the referendum, with its decisive majority for continued membership. But I think in the aftermath of the referendum there has been a general feeling that the European Community cannot stand still; a general feeling that its present degree of development is far from complete. But at the same time there is some doubt as to what should happen now. Earlier this afternoon, the noble Lord, Lord Davies of Leek, was asking what the next step should be and what the objective should be, and the noble Lord, Lord Goronwy-Roberts, was disinclined to speculate. But this was really why Mr. Tindemans was asked to prepare his report. As the White Paper reminds us, he was asked to clarify the concept of European union. In the House of Commons on 10th November, the right honourable gentleman the Secretary of State for Foreign Affairs said: What is certainly not settled is how the Community will grow and whether it will he a federal system or a series of nation States acting together. The first of those concepts is the concept of the founding fathers, a federal system. The second is the concept of General de Gaulle, L' Europe des Patries. Which of these concepts is the concept of the Government?—or do they believe that there is a middle course involving some restricted, limited and selective use of the supranational principle? The report of the Commission of the European Community on European union was sent to the Council of Ministers on 26th June, during the period under review, but I cannot find any reference to it in the White Paper. That report states unequivocally that European union means nothing if it does not involve the development of a European governmental executive. The Commission, in the course of their report, sketched alternative models for the possible development of the institutions of the Community to meet this requirement. It envisaged a European Government, either a collegiate body like the Commission or a group of national Ministers, but in each case answerable directly and totally to a bicameral European Parliament, with one Chamber directly elected and one Chamber representing the nation States and the regions within the Community. That is certainly the direction in which I should like to proceed. That is the aim I should like to see ultimately achieved.

But politics, of course, is the art of the possible, and perhaps the first steps are to be found in Mr. Tindemans more limited approach. Compared with the report of the Commission, he appears cautious. Compared with the position as it is at the moment he appears ambitious. The first step on which all are agreed, the Commission, the Parliament, Mr. Tindemans, and the British Government, is direct elections to the European Parliament. I hope that the target date of 1978 will be met by the British Government, and I am much more hopeful as a result of what was written by the Prime Minister in his letter to the Chairman of the British Council of the European Movement and reported today in the Press, and by what has been said by the noble Lord, Lord Goronwy-Roberts, here this evening.

I hope too that when the Parliament is directly elected it will be by a proportional voting system. Of course I have a vested interest in that since unless there is a proportional system, even should the Liberals poll half as much as the other Parties again, as they did in 1974, that would be unlikely to have a representative. But there is another reason which is well worth driving home; that is, that the great defect of the single member constituency system, whatever its merits, is that it exaggerates swings of opinion, which is why you have with it Governments with a minority of votes in the country having a majority of seats in the House of Commons. It exaggerates small swings, small changes of opinion.

The larger the single member constituency the greater is the effect of that exaggeration and, if you have 67 seats instead of 635, then you will have the distortion which normally takes place on a very much greater scale. Should the election for the European Parliament take place in what is mid-term, so far as our national elections are concerned—one would hope that the elections will be held at different times so that the European election is not confused with national politics—and if the Government of the day, as is often the case at that time, are extremely unpopular, then there could be a complete landslide of representation if the single member system with only 67 seats is used.

I should like to commend to the noble Lord a study of the document which was prepared by the Working Party of the study group of the European Movement, which was all-Party, and which considered this question of direct elections to the European Parliament and favoured a proportional system. It considered a number of different possibilities and it sets them out, but it favoured a proportional system. I was privileged to be a member of that Working Party, along with the noble Lord, Lord Chelwood, and the right honourable gentleman who leads the Labour delegation to the European Parliament, Mr. Michael Stewart.

The second step is more power to the Parliament, and we have spoken earlier today about budgetary control. Some years ago now the Vedill Committee, which considered the working of the institutions, advocated a power of co-decision for the Parliament. Mr. Tindemans speaks of a power of initiative for the Parliament. I should like to see a gradual transfer of the legislative process from the Council of Ministers to the Parliament area by area and over a period of time. There was the question of the need for a governmental executive, to which the Commission referred in their report, and in this context I think that the views of Mr. Tindemans on the European Council are of particular importance and significance. He believes that the European Council, the Heads of Government, should direct the working of the Community, leaving detail to the Council of Ministers, with the Council of Ministers preparing their meetings, and with majority voting applying at the meetings of the European Council. In effect, he wants to institutionalise the European Council. I would welcome this. It would be swinging the European Council away from l'Europe des Patries, which it seemed to be very much a part of, towards the supranational principle which is the essence of the Community. Also, it seems sensible that the top men of Europe should direct the Community, although one is bound to ask whether they would be able to do so for very long on a part-time basis, and whether they would require to have at least deputies, who would be Ministers from the nation-States, who would be devoting all their time to the direction of the affairs of the Community.

Then Mr. Tindemans says that there should be a united face to the world by the Community—the White Paper reminds us (and the noble Lord, Lord Goronwy-Roberts, has referred to it) of how there was a united face presented to the Conference on Security and Co-operation in Europe—one voice with which to speak to the United States, one Minister, perhaps, or one nation designated to speak on behalf of the Community. Whether or not we adopt that, I have no doubt that a common foreign policy is vital, and also a common defence policy linked with it along the lines which have been previously presented to this House by my noble friend Lord Gladwyn.

One point on which I find it difficult to follow Mr. Tindemans is his recommendation that there should be a two-tier approach to economic and monetary union, because I feel that this would divide us into first- and second-class nations and that we should drift apart. I retain a belief in the ultimate achievement of monetary union. I believe that it must remain a goal, although I know it is no longer fashionable to hold that view, as it once was. There are, of course, enormous difficulties in the way. Governments are told that they must harmonise their policies, and yet you have differing economic situations with rates of inflation varying from 5 per cent. to 25 per cent., which makes it very hard. I think we have to hold to the goal.

Finally, the President of the Commission, in his covering letter which he sent with the Commission's report to the Council of Ministers, wrote: The Member-States, tempted by purely national solutions, have faced international discussion divided. The Community institutions have been too weak and the means at their disposal too meagre to counteract this tendency. Mr. Tindemans, in his report, points out that for 30 years the relative weight and influence of the nine nations comprising the Community has been continually reduced. He maintains that the construction of Europe is the only all-inclusive answer to the challenge. If we agree with that, then it becomes a matter of the greatest urgency, and a matter not only of European idealism—although it is certainly that—but also of national patriotism to rectify that situation described by the President of the Commission in his letter.

6.48 p.m.

Baroness TWEEDSMUIR of BELHELVIE

My Lords, when one looks at the White Paper as a whole, one is bound to feel how on every aspect of our national lives our membership of the European Community is gradually affecting us more and more, and of course in foreign policy alone I should think that 70 per cent. of our foreign policy is now devoted to matters within the European Community. Easily the most important event described in those six months in the White Paper was the result of the referendum. I thought that one of the most fascinating things about it was its consistency. Even in such countries as Scotland, from where I come, it was a consistent vote, and I think it ought to give us a feeling that if we work for Europe we are doing something about which the country itself really cares.

Lord DAVIES of LEEK

My Lords, would the noble Baroness give way for a moment? I apologise. What I cannot understand with my own countrymen, Plaid Cymru, as well as the Scottish Nationalists, is that at home they are centrifugal but, so far as the Common Market is concerned, they are centripetal; that is, looking for the Common Market, and at the same time wanting to splinter its units. I cannot bring these two things together at all. It is completely illogical.

Baroness TWEEDSMUIR of BELHELVIE

I agree it is very odd, my Lords, but no doubt the noble Lord will have ample opportunity to discuss that when we have a devolution debate on England and Wales. I do not think this White Paper concerns devolution, though it might because it discusses direct elections. I was interested in certain remarks of the noble Lord, Lord Banks, and I hope that I shall have a chance to speak in the debate on direct elections which will come early on after the Government's White Paper, so I will not refer to it today.

I wish to refer to certain matters of detail within the White Paper and then briefly discuss the broader issue of Europe and where we are going. The White Paper refers in paragraphs 74 to 77 to the work of the Scrutiny Committees of both Houses of Parliament, and I thought it might interest noble Lords to know that only this morning I presided over a meeting at which, at long last, we made arrangements by which Members of another place will now work with Members of your Lordship's House on certain matters in European legislation. This was recommended in the Maybray-King Report—indeed, by the Foster Report of the House of Commons —and your Lordships' House made certain representations to another place which were not acceptable at the time. Now at last it has been suggested, not by us but by Members of another place, that there are many ways in which we could usefully work together on the volume of legislation that comes before us. Without doubt this will certainly save expensive duplication of time and effort among those not only inside but outside this House, for while we of course exchange all memoranda and minutes of evidence between us, it is not quite the same as having the stimulus of the two Houses of Parliament working together and taking evidence together. This is an historic decision as well as being most interesting and valuable.

The White Paper mentions certain statistics on the work of your Lordships' Scrutiny Committee and I thought I might usefully bring them up to date, as the noble Lord, Lord Goronwy-Roberts, in certain respects brought his six months' Paper up to date. Since the present Select Committee under my chairmanship was established, taking into account those proposals still left from the previous Committee, the total number of proposals coming before the Committee before they go to the Council of Ministers, is 1,050. As I have the task of sifting all this material, I always have in mind the people on each sub-committee and I try not to sift measures to them as meriting further scrutiny unless I think they are really vital. Thus, 309 out of the 1,050 have been put forward for further examination as being important to this country and for our future in the Community. I am glad to say that the sub-committees, of which we now have six, examined 167 proposals but thought that, on the whole, they did not merit a report to your Lordships' House. They have, however, recommended to this House 60 reports for information and 24 for debate. I therefore take this chance of thanking all those concerned who made it possible for us to have debates on these matters at a time when it matters; in other words, when we can perhaps draw the attention of the Government to subjects which are troubling us.

Of course the great question which always conies before one's mind is whether all this work is really having any influence. As one very distinguished noble Lord said to me, "I am enjoying myself immensely, but I do not know whether it does any good ". I must say that I very much felt that with him, so I thought I would try to explain to your Lordships whether or not we have any influence. I will pick on the work of some of the sub-committees—not all of them, because that would take too long and would not be welcome. I will refer to the work that is being done on company law by two sub-committees, one which deals with finance and economics, under the chairmanship of the noble Lord, Lord Mais, and the legal subcommittee under the chairmanship of the noble and learned Lord, Lord Diplock. These committees have produced and are shortly producing reports on all the major company law Directives; and remember, this will affect intimately the trade and industry of this country. They have not yet reported on the European Companies Statute Fifth Directive, but that will come soon. They have reported, or are about to report, on mergers and take-overs, prospectuses, company accounts, company taxation, withholding taxes on dividends, the formation of public liability companies and the maintenance and alteration of their capital. I often find that the far-reaching nature of these proposals is not really understood, even in the City.

The purpose of our sub-committees is to examine these matters with the experience and talent we have at our disposal in this House, and to make those who have to carry out the work as a result of these Directives understand that these things matter. This is not just something that is coming from the Commission to the Council of Ministers. It matters and it will affect us. We hope to have two debates on these matters. I understand that one will be a technical debate and one of more political interest in that it will concern worker representation and two-tier boards. The studies of the two sub-committees, who sometimes meet together for this purpose, have led them to consult, apart from the Government Departments concerned, a great many outside interests; for example, accountants, the Stock Exchange, bankers, the Take-over Panel and the Law Society. Members of both sub-committees have been to Brussels to discuss their draft reports with those in the Commission who are at work now producing further EEC proposals on related subjects.

When we were debating the whole question of our entry into the Community it was pointed out in those great debates in this House, which I remember well, that the fact that we joined so late would be bound to have great difficulties for us as a country, and this is perfectly true. Consider, for example, just this one example because the first five company draft Directives were prepared before we became a Member and naturally they were drafted without regard to the common law used in this country. There is, of course, a quite profound difference between the British and Continental systems, and therefore, starting late, however much work we may do on these proposals which will affect every one of us, we have to work very hard not just to influence our Government in what they say and do but to try to create an understanding, a two-way system of ideas, between those who work within the Com- mission and those of us who are responsible here to Parliament.

I sometimes think that we do have influence. Take, for example, the work of our Sub-Committee F under the indefatigable leadership of the noble Earl, Lord Lauderdale. That, I think, has had some effect. Noble Lords will have noticed that future discussions on energy policy in the Council of Ministers will, at the suggestion of the Government, take existing national plans as their starting point. This is a new approach because the view previously held by the Community was that energy policy should begin at the centre—in other words, that it should start in Brussels—and I really think that the House has helped to bring about a change in the attitude to energy problems.

We have had some very lively discussions in Brussels, one way and another, but they have been constructive. That is what is important because, when our sub-committee on energy went to Brussels to discuss its report, which it did as a natural courtesy, that was followed at his own request by a visit to this House by a vice-president of the Commission, M. Simonet, to appear informally before the sub-committee. This is the first occasion upon which a Commissioner has visited our Parliament for that purpose. I suggest that we should recognise it as an important way in which Westminster and Brussels can confer together during the formative stages, when we are together trying to build up on important matters.

We have, since I last reported to the House, set up a sixth sub-committee, under the very able chairmanship of the noble Baroness, Lady White. That subcommittee deals with all matters concerning the environment. As chairman of the Select Committee, I can say this, even though the noble Baroness is sitting opposite looking rather apprehensive. I believe that the knowledge and experience of the noble Baroness and of the noble Lord, Lord Ashby, have unquestionably been recognised by the Commission's Environment and Consumer Protection Service. The sub-committee made full use of the opportunity to go to the Commission and meet its counterparts, and to have informal but very frank discussions—the kind of discussions one cannot have in public but which are of immense benefit behind the scenes. I believe that the sub-committee has helped to moderate feelings and to bring a new and refreshing element into a debate which had started long before we entered the Community.

That is only possible because of the quality of the work done by many noble Lords and, I suggest, because of the quality of those who give of their time and intellect. I believe it may interest your Lordships to know that, if one takes the total membership of the Select Committee—which is 22—and add to that those who are good enough to allow themselves to be co-opted—which is 38—no less than 60 Members of your Lordships' House give a great deal of time to the work of Europe. I understand that the average daily attendance at your Lordships' House is now 263: that means that the Select Committee on the European Communities has nearly a quarter of your Lordships' membership really working hard and doing their homework on these important matters.

That is all I wish to say about our work, but I should like, in ending, to refer to the comment on paragraph 2 mentioned by my noble friend Lady Elles. I refer to the fact that, on 9th June, the Prime Minister made a Statement in the House of Commons in which he said that the Government intended to play a full and constructive part in all Community policies and activities. That is surely the kernel of the White Paper. We have the Tindemans Report. What does that Report say about the state of Europe today? The Belgian Prime Minister says, I believe that over the years the European public has lost the guiding light; namely, the political consensus between our countries on our reasons for undertaking this joint task and the characteristics with which we wish to endow it. Europe today is part of the general run of things. It seems to have lost its air of adventure…An unfinished structure does not weather well. It must be completed, otherwise it collapses. I am very well aware that, when we come to examine some of the proposals which come before us from Brussels, we may make critical reports. However, we try to do it in a constructive way. We try, above all, to remember that we are here in Europe because we want to be and because our future lies in Europe. It is not for me to go into various matters which noble Lords will no doubt raise about whether or not the Government have taken a lead in certain matters, but I feel passionately that we must not be overborne by our nationalist preoccupations, however great our unemployment or our inflation. We must work at Europe. It is our future, and I hope that we shall put our heart into it.

7.7 p.m.

Lord O'HAGAN

My Lords, it is extremely difficult to follow the powerful and, indeed, passionate speech of the noble Baroness who presides over the scrutiny committee of your Lordships' House. She has illustrated with both brevity and detail what a constructive part has been played by your Lordships' House through its scrutiny committee in adapting this country to its new role inside the Community. The noble Baroness has made two speeches; the noble Lord the Deputy Leader of the House has made innumerable speeches today. We always enjoy hearing from the noble and mellifluous Lord, if I may so describe him, but, in the present debate, I suggest to the House that we are hearing him too often and too late. Too late because the debate on this White Paper in another place took place on 3rd December, and too often because it would have been much better had we in this House been able to adopt the practice of another place whereby at least some of the speeches from the Front Benches are made by Members of the European Parliament. It was extremely exciting to hear the radical and far-reaching proposals put forward by the noble Lord, Lord Gordon-Walker, in a previous debate, but how much more exciting would it have been had lie been winding up for the Government. I hope that, when the usual channels are considering organising these debates in a way which will enable members of the European Parliament to participate more fully, they will also consider following the lead of another place and will suggest to the major Parties that members of the European Parliament might lead for their Parties in these debates.

Your Lordships may think, when I devote the rest of my very brief remarks to one particular aspect of the White Paper which we are discussing today, that that flows from a hasty or too innocent reading of the late Mr. Crossman's Diaries, which I was given as a Christmas present. However, I can assure your Lordships that this results rather from overhearing some advice given by Lloyd George to Mr. Macmillan, as retailed by the latter on the radio. Lloyd George suggested to Mr. Macmillan when he was quite a young Member of Parliament that Back Benchers should speak on only one aspect of a subject lest they should lose themselves and the attention of the House as well. I do not expect to emulate either of those distinguished gentlemen, but I wish to concentrate on one subject. It is the preparation and execution of British policy inside the Community.

I wish to refer, as have others of your Lordships, to the Prime Minister's statement after the Referendum, in which be said that he hoped that the country would play a full and constructive part in all Community policies and activities. I should also like to refer to the statement made by the noble Lord, Lord Goronwy-Roberts. on 26th November, when he said we have fulfilled and will continue to fulfil this pledge."—[Official Report, col. 280] The question I wish to examine is, have we done so? My answer is: Not altogether; on the whole, No. I should like to examine that in the remainder of my few remarks.

There have been isolated, sporadic and successful attempts to fulfil that pledge. The Prime Minister has extended and elaborated on the pioneer work of Mr. Rafton Pounder in suggesting a new way of extending control over the budgetary mechanisms of the Community, and controls over budgetary expenditure. This is an extremely important step to which too little attention has been devoted in the media in this country. It is of enormous importance in the longer-term story of the Community's development. I ask the noble Lord, Lord Goronwy-Roberts, whether Her Majesty's Government envisage the new Public Accounts Committee, or the court of auditors, or any other body being able to control, or question, national civil servants who are implementing Community policies, expending Community money that comes from the people of the Community. Unless the Community's control mechanism is capable of overseeing what the national Governments are doing on behalf of the Community in implementing their policy, then this new system of control will be not nearly as far-reaching and successful as one would hope.

One of the difficulties that our entry into the Community posed to Whitehall is that Community policies break all the traditional barriers. They are neither domestic, nor foreign. They are a mixture of both, and the proportions between the two vary very much. Sometimes cod becomes a matter for the Foreign and Commonwealth Office, and sometimes foreign affairs become a matter for ordinary domestic departments when we are negotiating trade deals. But membership of the Community brings in its train a continued breaking down of the traditional distinctions between the various parts of British Government machinery. In trying to answer the question of whether we have succeeded in attempting to play a full and constructive part in all Community policies and activities one must begin by asking: has the British Government machine adapted to the new situation?

I am not sure how improper it is to refer in your Lordships' House to Cabinet Committees; and if it is improper I think it is a pity. I do not intend to attempt to "do a Crossman" and interfere in what actually goes on, but because of what I have been saying about the breakdown in the traditional barriers between different parts of the Government machine, it follows that the Foreign and Commonwealth Office cannot have as thorough a control over what happens in the Community as it did before we became a member of the Community, over the matters that normally came within its handling. For example, the Council of Ministers discussed in December a Directive on the mutual recognition of navigability certificates for inland waterway transport. That was worked on in the Council by people from the department concerned as well as by officials from the Foreign and Commonwealth Office who, one imagines, previously were never intimately concerned with inland waterways.

Therefore, departmental views, prejudices and interests have a greater weight in foreign affairs than ever before, and Ministers who normally cannot expect to exercise much influence or control over what happens abroad have had their powers to do so enormously reinforced and increased by membership of the Community. This does not matter, but it does increase the need for overall co-ordination of policy towards the Community. If these barriers have been broken down there must be some form of overall supervision. Is that supervision adequate? If it is not, I suggest to your Lordships that it will lead to unnecessary and embarrassing incidents in the Council. I suggest, further, that some of the difficulties into which we have got with our partners in the period that we are discussing are due to the fact that the machinery in Whitehall has not been sufficiently adapted to membership of the Community to co-ordinate all the different types of activities that now become subjects for foreign and commonwealth affairs.

There is an uneasy division between the Cabinet Office, the Foreign and Commonwealth Office, and the other Departments, and because of this uneasy division it seems sometimes—and I stress "sometimes "—to our continental partners that we are reneging on commitments and undertakings when, in fact, we are not. I feel, and I may be wrong—I hope I am wrong—that part of the trouble we have got into in recent months flows from this lack of co-ordination at home. In particular, the row over pollution could have been partly avoided had we not seemed to be going back on what we had already committed ourselves to at an earlier date. The noble Baroness disagrees, it seems, but she is quite at liberty to do so, and I hope that later she will intervene to correct me.

I suggest that the Government are to some extent imprisoned by the inadequacy of their own co-ordinating machinery, but I hope very much that I am wrong in that suggestion. The defects in this machinery are due in part to the lack inside the Government of an overall political view of the Community. That may be a matter for regret, but it is not a matter for surprise. We cannot expect that to be replaced very quickly by something else.

I suggest to the noble Lord, Lord Goronwy-Roberts, that there is a need to take a long term view of Britain's place inside the Community. If no effort is made to sit down and think it out, it should be. I am sure that some effort is made; I am not saying that no effort is made. But if not sufficient effort is made, then, again, as with the question of machinery, we may find ourselves falling into traps which we could have avoided had we taken earlier steps to think about how to avoid them. While the EEC may not know where it is going, we sometimes seem to have even less idea of where we are going inside the Community. I suggest that while there is a need for greater co-ordination of the machinery there is also a need for a focal point inside Whitehall for an examination of the long-term implications of our membership of the Community; and such a unit could prepare plans for what we should do inside. The Central Policy Review Staff was set up to do this in domestic matters, but occasionally it overlaps into Community matters. This is the type of approach that I feel we need inside the Community.

My Lords, there may be some voices that say, "Why can we not do it alone?", or, "Why can we not hold the others up until we get what we want?" I do not think we have the economic or the political power to do so; but one of the reasons why General de Gaulle was so successful was surely because the French have the most tightly co-ordinated and the most efficient system of control of their policy at home. The SCI coordinates French policy towards the Community in a way which is generally thought to be the most efficient and the most co-ordinated of all the Member States, and part of (whatever you like to call it) the General's success in imprinting his image upon the Community came from that special machinery that was set up at home. Whether or not one likes it, that was one of the reasons for it.

My Lords, I hope I have not seemed too negative. I should have liked to have been more constructive on endless delectable topics, such as European union, the future of the European Parliament, the Lomé Convention or all the other constructive things which have happened in the Community in the period covered by this White Paper. In particular, I should have liked to have drawn much more attention to the very real contribution that the Community made towards stabilising the situation in Portugal, which I think was a very real achievement of the Community. But I felt it was better to talk about one thing, and one thing briefly, and I will now sit down.

7.22 p.m.

Lord SAINT OSWALD

My Lords, I am grateful to my noble friend Lord Chelwood—a friend of 47 years' standing —for permitting me to make a short intervention before his own speech. It seems right, at least to me, that on such rare occasions as we are able, due to our European duties, to attend our mother Chamber, we, the present, current members of the European Parliament dispatched from Westminster, should take the opportunity to speak, however briefly, whenever it is possible to do so on our subject. I have found dismayingly few such opportunities and my own contribution today will have been, I have no doubt, entirely eclipsed by that of the noble Lord, Lord Gordon-Walker, the only other of my current European colleagues to join in today's debates.

I should like to make this the pretext for mentioning how much we lament the inevitable temporary loosening of day-to-day links with our own Chamber in Westminster. It is inevitable because our own conviction in the importance of the work we do in Strasbourg, in Luxembourg and in Brussels requires us to apply ourselves continually to our tasks there. We fully admire, and we have every reason to admire, the reports of the European Communities Committee and sub-committees, which show such a close understanding of our own efforts and pour out the results through a kind of selective cornucopia of information to your Lordships' House, with my noble friend Lady Tweedsmuir as a kind of "Goddess of Controlled Plenty ". It gives us also great satisfaction and uplift to see and to welcome members of those committees when they are able to visit us and observe part of the laborious turmoil in which we function.

Although, as I have said, the noble Lord, Lord Gordon-Walker, is the only present European member, apart from myself, to speak today, the debates will have been assisted by three former members in the persons of my noble friends Lady Elles and Lord Chelwood, and the noble Lord, Lord O'Hagan, who has just spoken; and I should like to give testimony as to the extent to which they are missed by their former colleagues, not only in the British delegation but from all nine delegations and all political groups. The particular brand of individuality of the noble Lord, Lord O'Hagan, has not been replaced since his departure, and I, as one of many, sincerely hope that the future may provide for his return to a forum where he had made such a distinctive and valuable mark, exemplified by his thoughtful and penetrating speech today.

It seems clear that when the noble Lord returns, as I hope, this will be to a different and a far larger Parliament than the present one, I hope working under better conditions and with a more powerful role. One admirable outcome, or at least consequence, of the Referendum has been the new impetus given to the concept of direct elections; but in order to be consistent with an earlier observation I should like to offer your Lordships the thought (subliminally, since it hardly belongs to this debate) that in the directly elected European Parliament of tomorrow links with the "indigenous" Parliament will not be lost. I cannot suggest, nor would I think it appropriate to attempt to suggest today, how these links are to be preserved or constituted, but I bear heartfelt witness to their importance. I feel entitled to make such a comment by the direct reference to the matter itself in paragraph 70 of Section XI of the White Paper, and by the fact that the noble Lord, Lord Banks, dwelt upon it in some detail.

With regard to the White Paper itself, I should like to touch upon one development which is unobtrusively, somewhat obliquely forecast in Annex A. There are now 18 members of the British Labour Party in the European Parliament, six of them from your Lordships' House. I am glad to remember how, when there was occasion, I mentioned how much their absence was felt during the years before their arrival, and logically enough I can now express satisfaction at the completeness of the British delegation. I believe that those there with us now sometimes take their own form of satisfaction from the belief that, having also imported Parliamentary disciplines endowed by Westminster, they are from time to time able to queer our pitch in certain instances in a manner to which we in the European Conservative Group had not been accustomed. This is perfectly salutory, and I hope I shall not be spoiling their fun or deflating their boyish or girlish sense of exultation if I tell them, truthfully, that any frustration of our righteous designs which they from time to time effect is more than compensated for by the knowledge that Britain is now fully represented in that Parliament.

7.28 p.m.

Lord CHELWOOD

My Lords, I am glad to have the chance to make a contribution to this important debate today, and I was very happy indeed to be able to give way to my noble friend Lord Saint Oswald, who has, I think, emphasised to us the very great strain that the dual mandate imposes, even on Members of your Lordships' House. This, I think, is an absolutely unanswerable argument for direct elections at the earliest possible moment.

The White Paper that we are debating covers—and I think I am the only person to have spotted this—seven months, not six. I am not complaining about that; it will mean that the next report will take us up to the end of April, I think, which will mean that there will be ample time for it to be debated before Parliament rises for the Summer Recess. Rather like the noble Lord, Lord Banks, did, I regret that we did not debate this White Paper before Christmas, because quite a number of important things have been overtaken by events, which have been moving quite fast. I have one small criticism of the White Paper, and that is that nearly six pages—that is, Annex C—are taken up with a list of all the meetings that Ministers have attended. This seems to me to be quite unnecessary and a waste of paper, and I hope that it will not be thought necessary in future.

These half-yearly debates, my Lords, give both Houses of Parliament an excellent opportunity to review Community strategy, and, coupled with the debates recommended by the Scrutiny Committees, they mean that on the Floor of your Lordships' House and in another place we have fairly ample opportunities to discuss what is happening on the other side of the Channel. There is, of course, I think it will be agreed, a continuing need for both Houses to follow the progress of events in the Community, to look at the future and to devote ample time to some of the big strategic questions which never seem to get debated—questions such as the GATT negotiations, the Common Agricultural Policy, foreign policy and defence questions, the Conference on Security and Co-operation in Europe as well as relations with the USA. I could think of other subjects as could other noble Lords.

My Lords, I found the White Paper rather disappointing and a little lacking in inspiration. I had hoped that after the crushing victory in the referendum, the United Kingdom would play a more constructive and forthright role in the Community. I am sorry to say this, but as I see it Her Majesty's Government have stepped into the worn-out French shoes, dragging their feet in them just as did the Gaullists at their very worst. What I read in paragraph 63 about energy, in paragraph 66 about the environment, in paragraph 58 about transport, and, for that matter, in paragraph 70 on direct elections—although I am glad to say that there have been second thoughts on that which I welcome—seems to me to be inconsistent with the Foreign Secretary's most encouraging statement in Appendix B of the White Paper.

My Lords, the examples I have given seem to me to indicate a failure on the part of the Government for some curious reason to understand completely how the Community works, to understand that almost everything is negotiable behind the scenes through a whole network of Working Parties, standing committees and in many other different ways. This is the case even if the Luxembourg Agreement, to which no reference has been made today, is strictly applied. Even in the Treaty of Accession it was made clear that the Community would never in any circumstances seek to ride roughshod over the important national interests of any member country, and in any case, if we want to use it, the veto remains always in reserve.

This brings me to M. Tindemans' recommendation that recourse should be had to the majority vote in certain matters as envisaged in the Treaty, and we should not be afraid of advancing at two different speeds where total agreement cannot be reached. This is one of the keys to real progress towards greater unity in many different fields. It amounts to the need to use the abstention procedure more frequently in the Council of Ministers. It was said 18 months ago that they proposed to do this. Just how much has been done, I am not sure. There is a case for the use of the abstention procedure when strong majority views arise, even in matters which involve the vital and important interests of one or more member countries so that progress is not blocked and partial agreements can be made. This is a suggestion of the Tindemans Report with which I concur. I realise that to move all the way back to majority voting—and we are only trying to regain ground which was lost since 1965—automatically means that we must have confidence in each other's good will and good intentions. That will gradually develop.

There is also the question of who has the right to decide that a problem involves the vital interests of a member country—I am still speaking of the Luxembourg agreement—and not only who has the right (whether it is the Council of Ministers, the Commission or the member country itself) but whether this has to be declared before or after the subject is debated. This has never been decided. It has been left, I think, too vague and has led to difficulties. Procedural uncertainties, I think, have made it all too easy for the Council of Ministers to block progress in numerous directions, progress which was strongly recommended after years of consideration and thought by the Commission and often their views have been heavily endorsed by the European Parliament.

When I was a member of our delegation and deputy leader, I felt that the Council of Ministers showed a lack of understanding of the amount of work done by the Commission and the amount of work done in the committees of the European Parliament, in studying complicated matters and they received very cursory treatment when they went to the Council of Ministers and sometimes no treatment at all. I am thinking of direct elections and the noble Lord, Lord O'Hagan, will correct me if I am wrong; but I think it was something like 18 or 20 years ago that the Assembly, as it then called itself, put forward proposals for direct elections. That communication has not yet been answered. That is an extreme example.

I look on the suggestion that the presidency of the Community should be held for one year rather than for six months as being sensible. It takes a very long time to work oneself into a complicated job. I and others have noticed that as the months have gone by the President has acted with increasing authority; and just as he is beginning to know his job he hands it over to somebody else. This is more suitable even if it means a nine year wait before one's turn comes round again. I thought myself that the Tindemans Report on the whole was pragmatic, sensible and practical.The Times summed it up well when it said that it fell between the desirable and the acceptable. That was about right.

I must also admit that I agree with some regret that the tacit dropping of 1980 as a target for European union and economic and monetary union is, in the circumstances, sensible. I feel that I should say that.

My Lords, I want to say something which is slightly controversial and I hope that I shall be forgiven for saying it. I think that one factor that has inhibited Her Majesty's Government—and I made some criticisms earlier—is that four Cabinet Ministers who have always been utterly opposed on ideological grounds to the whole concept of the Community continue to serve in the Cabinet. They did not feel it right to resign when the referendum went heavily against them. They remain in the Government. They should have said: "We have fought and lost and now we propose to bend all our efforts to make a success of British membership of the community." That would have been fine. They did not say anything of the sort. I think that this is sad and deplorable and I do not see in the circumstances how their hearts can be in their work.

I should like to turn in my last few minutes to another subject, ignoring the excellent advice given by the noble Lord. Lord O'Hagan, and taking two subjects instead of one. I should like to say something about what I regard as M. Tindemans' other equally important recommendation among the many important ones that he has suggested. It comes under the heading of political co-operation. Why it is called that I have never been sure. I am only repeating what was said in the Second Report on European Political Co-operation on Foreign Policy. Here I read: The Ministers "— that is, the nine Foreign Ministers— consider that co-operation on foreign policy must be placed in the perspective of European Union. From now on, it is of the greatest importance to seek common positions on major international problems. The noble Lord, Lord Goronwy-Roberts, himself said that he strongly welcomed this trend. The Foreign Secretary has said the same thing and Mr. Tindemans himself has said that if European union did not have the means to cover all aspects of our external relations it would not be equal to its task. He goes on to say that in his view it is essential to put an end to the distinction between Ministerial meetings dealing with political co-operation and those dealing with subjects covered by the treaties. I warmly welcome that also. This is a field in which the Community can make spectacular progress given the political will. A number of things follow from it to which very little thought has been given. I do not know which commissioner would really be responsible for the external relations of the Community. Sir Christopher Soames is responsible for the external economic relationships, and he always steps gallantly and efficiently into the breach when foreign policy questions arise; but if there is going to be a common foreign policy on an increasing scale it will have to be the full responsibility of a commissioner, and perhaps a full-time job for him. Of course trade, commerce and aid cannot be divorced from foreign policy. Of course the Community cannot develop common foreign policy unless there is far closer co-operation in the field of defence. This has been made absolutely clear on a number of occasions.

I should like, with permission, to read a brief extract from the definition of the European identity which was issued in Copenhagen by the Nine Foreign Ministers: The Nine will never succeed in maintaining peace if they neglect their own security…The Nine agreed that in the light of the relative military vulnerability of Europe, the Europeans should, if they wish to preserve their independence, hold to their commitments and make constant efforts to ensure that they have adequate means of defence at their disposal. The naughty word was mentioned. Very little has happened since then, but it was mentioned and all nine Foreign Ministers agreed that this was the case. I am pleased to see in the Tindemans Report—and I will be brief again—a clear and straight-forward reference to this. It is one sentence: European union will not be complete until it has drawn up a common defence policy. I could not agree more; I agree wholeheartedly. I realise that this is controversial and raises all kinds of difficulties. Nobody knows more about the subject than the noble Lord, Lord Gladwyn (who was in his place earlier), and was Rapporteur of the Political Committee studying this matter. I am sure a great deal of careful thought will have to be given to it.

Heaven knows! Britain waited long enough and tried hard enough to join the Community after the initial blunder of not joining when it was first created. This is something for which both major Parties, saving the presence of my noble friend sitting on the Liberal Benches, must accept equal responsibility. More and more of the problems that face us in Britain can never be solved in the national context taking no account of the interests of other members of the Community. Britain can help to make the Community into a world Power economically and politically with increasing influence for stability, peace and rule of law. At present I fear we are in danger of beginning to exhaust the great fund of good will that exists towards us. I am sorry to say that, but I believe it to be true. We must not expect progress to be spectacular, but it can and must be steady, and a very heavy responsibility indeed rests on Her Majesty's Goverment.

7.43 p.m.

Lord GORONWY-ROBERTS

My Lords, this has been an invaluable debate and has lasted rather longer than most of us expected. Every contribution has been to the point, and I believe, on the whole, has accepted the presidial dictum set out at the beginning of the debate; that is, that we should not waste any more time arguing about the referendum and renegotiation, but should concentrate on the facts of the present and the promise of the future. If I may take note of one or two of the more important points, the noble Baroness,. Lady Elles, referred to the Tindemans Report and direct elections. As I have said, there will be a White Paper on direct elections within the next few weeks. It will need to be debated by this House and, indeed, another place. As for the Tindemans Report, which raises wider issues, I am sure a debate at an appropriate time could be arranged though the usual channels, and I assure the noble Baroness that the Government are determined that Parliament should be properly consulted on all these issues.

I do not agree with the noble Baroness in what she said about the British representation at CIEC. These are vital national interests and we are entitled to protect them. I have said on another occasion that Britain is not the only member of the EEC to have its liquidity problems. In our case it may be oil; in another case it may be wine. Whenever this country asserts its proper national interests in its obvious national context somehow everybody falls on it and criticises it for doing what so far as I can see the rest of the Nine are assiduously doing all the time, and nobody says a thing. Nor do I agree that MSP is of doubtful value. It would come into effect if there was a dramatic fall in the price of oil. That would be a serious matter for the Community countries who have, or contemplate having, investments in alternative sources. There is a need for a measure of stability to protect existing investments in supplies and to ensure development as quickly as possible of alternative sources.

The fact that there is also a United Kingdom interest and possible benefit for it in that it is the only European oil power should not blind us to the arguments for MSP on a European basis. The minute there is some suggestion of a British advantage—this is a somewhat perverted way of approaching the question—there must be something wrong with what is put forward. I protest against this constant denigration of this country in that European context. In the past year we have made every effort in the face of real difficulty to help to build up in Europe a more coherent system of accountancy in CAP, at the budgetary level and in regard to the overridingly important question of energy, particularly oil.

Baroness ELLES

My Lords, would the noble Lord give way? The point I was raising was not that the interests of the United Kingdom should be defended, because we all absolutely agree on this. The interests of the United Kingdom should always be defended. I was questioning the way in which that interest was defended and whether it was successful.

Lord GORONWY-ROBERTS

My Lords, clearly it has been successful because the progress of the conference and the institution of the four commissions is a proof that this approach was fully understood and was successful. I will now say a word about renegotiation and the referendum. It may be that, as matters proceed internally in this country, those who have been the most critical of the principle of consulting the people as a whole about far-reaching constitutional changes may find new virtue in this method of democratic consultation. I will say to the noble Baroness that that period which she described as having done harm to Europe, and possibly to this country's standing in Europe, during which renegotiation and a referendum were promoted, may well prove to have been the only ways in which this country could meaningfully have been drawn into the European venture. Let us consider whether or not, without engaging in these processes of consultation and drawing in the people in the way we did, we would be today considering progress in Europe.

The noble Baroness, Lady Tweedsmuir of Belhelvie, welcomed the arrangement to co-operate with another place on the Scrutiny Committee. I warmly welcome what she said. This may well be a historical, constitutional or at least procedural movement in the more effective use of rare and highly qualified manpower and woman-power in both places. We were all delighted and impressed with the account she gave of the tremendous work which the Committee, over which she so ably presides, performs. It was a revelation to me that as many as a quarter of the active membership of this House is engaged, through several Committees, on complex, demanding and no doubt very rewarding work concerned with the application of European statutes and regulations to the life and industry of this country.

Referring to the question which was put by the noble Lord, Lord O'Hagan, as to whether the court of auditors will have control of Community expenditure of Member-States, a fair answer would be that the court will have the power to examine records and documents on the spot in the States, and the Administrations of Member-States may be required to provide all information required by the court for the purpose of the audit, that is, within their remit. The Articles referring to that are numbers 8, 16 and 24.

The noble Lord raised a number of other important questions and he quite legitimately criticised the machinery in Whitehall for co-ordinating our policy on Europe. We are still learning and, so far as I can see, the rest of the Nine are still learning, too. Idol not know who may be at the top, but I do not think this country is lagging very far behind. Indeed this country has a Civil Service which is constantly ready to learn from its critics. So if there is a practical and thought-out criticism or suggestion made, I can assure the noble Lord that the Government and the permanent staff in Whitehall will be delighted to have it. Let us have any such suggestions. We are constantly seeking to improve our arrangements.

The noble Lord, Lord Banks, in an impressive speech which I wish I had time to deal with more fully than is possible at the moment, said among other things that the Lomé Convention was the outstanding fact of the last six months. So it is. One reason for this is that under British stimulation a consensus of approach to international aid was finally framed and. as I suggested before, did not stop at the Convention. Indeed, it did not stop at Kingston. From Lomé to Kingston and on the Seventh Special Session of the United Nations dealing with those matters is a progression of success. At the start of it lies United Kingdom initiative, and all along there has been the progession, the influence, the thinking and the hard work of this country and its leaders at these gatherings. Let us take pride in what this country has contributed, especially in the last six months, to the evolution not only of an effective co-ordination in Europe but of a more successful application of the European idea.

My noble friend (as I like to call him) Lord Chelwood made an attractive speech in which he laid about him with a will and naturally complained about the Government's performance. That is fair enough. We are here constantly to criticise performance. But in addition the noble Lord made a number of concrete suggestions, and that makes the criticisms valuable. In particular, he stressed the importance of co-ordinated foreign and defence policies for Europe. This cannot be emphasised too often or too much. There are many people who came to support the idea of British membership of the EEC not for economic reasons but for political ones. Many people saw in a united Europe—or at least in the union of democratic Europe—the possibility of co-ordinated foreign policy, linked with a co-ordinated policy of aid and a more rational, coherent, defence policy and a rationalisation of scarce resources. I think this should be at the heart of our thinking about Europe.

Europe has been very much a political and cultural fact through the ages; and into the future it is very much the European influence in foreign relations and on the culture of the world that will count. But, of course, before that influence can be effective, Europe—and the United Kingdom as part of it—must so organise its economics and its resources in men and materials that they are made effective in the service of a rational, effective and pacific foreign policy and an effective system of security.

On Question, Motion agreed to.