Lords Sitting of 31 July 1986

Preamble
The House met at eleven of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Sheffield.

Postal Charges
Lord Boyd-Carpenter: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they were consulted by the Post Office about its recently announced increases in postal charges by amounts substantially higher than the rate of inflation; and whether they propose to take any action in respect of this action by an organisation holding a statutory monopoly.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth): My Lords, I have to apologise to my noble friend for the length of the reply but the Question raises several issues.
The postal tariffs are the responsibility of the Post Office. We were advised by the Post Office about the tariff proposals that it recently sent to the Post Office Users' National Council and the additional revenue that they would be expected to generate. This advice was in the context of our discussions with the Post Office on the three-year financial and efficiency targets for the postal business that are being announced today.
The Post Office's proposed increases for inland letters are well below the rate of inflation; lp on the first-class tariff, the first increase for over two years, and restoration of the 1 p that was cut from the second-class tariff last November. My right honourable friend the Secretary of State sees no ground for him to exercise his limited statutory powers in respect of those proposals. The only proposed increases that are higher than inflation represent a further stage in the phased elimination of the subsidy enjoyed by users of certain overseas services at the expense of the generality of users of overseas services.
Lord Boyd-Carpenter: My Lords, while thanking my noble friend for what is at any rate a quantitatively satisfactory reply, may I ask him how he works out that an increase of lp on 18p mail is below the rate of inflation? Is my noble friend aware that lesser mathematical minds than his would suggest that it is about 5 per cent. against the current rate of 2½ per cent.?
Lord Lucas of Chilworth: My Lords, regarding the first-class tariff", I am advised that if one takes a real price index of 100 in January 1981, when the tariff was 14p, in October this year if the proposed charge of 18p is taken forward the real price index will then be 91.7.
Lord Mellish: My Lords, is the Minister aware that they made untold millions of pounds profit last year—
Noble Lords: Order!
Baroness Burton of Coventry: My Lords, is the Minister aware that if we forget all the words that he has just had to give to the House, the ordinary customer now has the belief that whatever profits are made by these nationalised organisations the customer still has to pay increased prices?
Lord Lucas of Chilworth: My Lords, that is so; there is an increased tariff but that tariff is in real terms below the inflation rate. There is most certainly better value for the amount of money that the customers are paying. There are some 40 million pieces of mail that are now dealt with inland every day. The profits that accrue go to the benefit of both the consumer of the service and the nation at large.
Lord Mellish: My Lords, that is a weird set of economics. Surely they made millions of pounds profit last year? At what level do postal rates stay firm or go down? Do the Post Office simply go on making more profits every year and putting up the price every year? I understood that it was a free market: that prices came down when profits went up.
Lord Lucas of Chilworth: My Lords, with regard to the postal business, the profits of the Post Office were £134 million for the year 1985–86. This represents only 4½ per cent. on turnover. I do not believe that that is an excessive profit to be made.
Lord Winstanley: My Lords, the Minister told the House that POUNC were informed of these proposed increases before they took place. Is the Minister in a position to tell the House what advice POUNC offered to the Post Office Board? Can he tell the House why the Post Office Board rejected the advice that was given to them by POUNC?
Lord Lucas of Chilworth: My Lords, as I sought to explain in my earlier remarks and as I have sought to explain on a number of occasions, these matters are for the management of the Post Office. It is an operational matter. The Post Office receive advice from POUNC and from other quarters. It is for the management to accept or reject that advice.
Lord Orr-Ewing: My Lords, is it not a fact that the postal service is steadily going down in punctuality of its delivery? It is steadily being automated, we hope in order to reduce the costs. Convenient sub-post offices are being closed and Crown post offices are rare and far between. That represents a further depreciation of the service that the public receives. Surely it is now time that more wholesale automation should take place and that there should be a deep anxiety by the Post Office to make their deliveries more punctual and efficient so that they match the needs of a modern industrial economy.
Lord Lucas of Chilworth: My Lords, it is not true that the standard of service with regard to deliveries

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has declined. In 1984–85, 86.3 per cent. of first-class mail was delivered on the first working day after posting. This year the figure is 87.6 per cent., and that shows an improvement.
Lord Mulley: My Lords, while 4.5 per cent, on turnover may seem high—and many companies would be very glad to achieve that figure—will the noble Minister tell us how much of that profit will be taken away by the Treasury and how much will be available to the Post Office for improving its services? Secondly, will the Minister care to comment on what seems to me to be the strange phenomenon that noble Lords and. indeed people elsewhere who are great advocates of the taking of all these monopolies out of what they call civil service and Government beaurocracy, nevertheless constantly, and I believe rightly, want to have parliamentary control and interference in their operation?
Lord Lucas of Chilworth: My Lords, to deal with Lord Mulley's first question, I point out that none of the profits goes to the Treasury. The Post Office has a negative external financing limit and therefore the money goes to invest elsewhere in the public sector with benefit to the public sector borrowing require-ment. As I have said, none goes to the Treasury. The general principle under which the Post Office works is the same for all the nationalised industries and is generally in accordance with the White Paper, Command 7131, which was published in March 1978 when the noble Lord's party was in power.
Lord Bruce of Donington: My Lords, is the noble Lord aware that we on this side of the House admire the noble Lord's vigorous defence of this highly profitable public undertaking? Further to the point raised by my noble friend Lord Mulley, will the noble Lord inform us what the profit is in ratio to the capital employed by the Post Office? That is normally recognised in industry as being a much more normal indication of profitability. In view of the attitude that the noble Lord has taken today, will he give the House an assurance that no consultations have taken place with the Post Office concerning its possible future privatisation?
Lord Lucas of Chilworth: My Lords, I am afraid that I do not have the figures concerning the ratio of profits to assets. I think that the noble Lord could find those figures in the annual report which was published a short while ago. So far as privatisation is concerned, I think that I have answered that question on more than one occasion over very recent weeks.
Lord Nugent of Guildford: My Lords, is my noble friend aware that the improved rate of next day delivery of first-class mail has not yet reached the part of the world in which I live, which is about 47 miles from here? Is he aware that, not infrequently, I receive first-class mail from London which has taken four days for delivery and that a man on foot could do it quicker? Will my noble friend ask that we should receive a share of the improved service about which he has told us?
Lord Lucas of Chilworth: My Lords, I am quite sure my noble friend accepts that the figure which I gave was a general and not a particular figure. I recognise, as does the Post Office, that the standard of delivery service falls short of the target and in certain areas it may fall very short of the target. The Post Office chairman is aware of this, and since the agreements on efficiency and manning that were concluded a few weeks ago one anticipates an improvement nearer to the target set across the country.
The Earl of Swinton: My Lords, we have spent 11 minutes on the first Question of the day. I think that the noble Lord, Lord Diamond, has been anxiously attempting to rise to his feet—
Several noble Lords: And the noble Lord, Lord Boyd-Carpenter.
The Earl of Swinton: My Lords, with all respect, my noble friend has had a "go". I am in your Lordships' hands. We have spent 11 minutes on this Question. I suggest that the noble Lord. Lord Diamond, asks his question and then we move on to the next Question.
Lord Diamond: My Lords, will the noble Lord the Minister be good enough to reconsider the answer which he gave as regards the amount of profit which the Post Office is allowed to keep? The fact that he said that the external financing limit was a negative one means—does it not?—that the Post Office does not, and I repeat "not", retain all its funds, but that part of them are passed on via the Consolidated Fund for the other purposes which the noble Lord mentioned? Is it not important that the country should understand that, of the charges made, part of them are for the benefit of those who use the Post Office service and part of them—a small part, but nevertheless a part—are for the benefit of other services?
Lord Lucas of Chilworth: My Lords, that is perfectly true. The Post Office does not keep all its profit. In 1986-87 the Government's target of £93 million surplus was to go in the direction which I indicated—that is, to be invested elsewhere in the public sector with a benefit to the PSBR. That would come out of the 4.5 per cent. profit on turnover to which I referred earlier.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that the figures which he gave for deliveries are somewhat misleading inasmuch as they relate not, as he said, to the time of posting but to the time of collection which is, of course, at the discretion of the Post Office. In the light of that fact, are not his figures just as misleading on that point as his strange calculation that lp on 18p is less than 2.5 per cent?
Lord Lucas of Chilworth: My Lords, the time is calculated—and my noble friend is quite right—from the date stamp in the sorting office. My noble friend has addressed himself to this question on more than one occasion, but one has to have some benchmark, and that is the benchmark against which we make the measurement.

Horne Report: Implementation
11.20 a.m.
Baroness Gardner of Parkes: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what plans they have for implementation of the recommendations of the Home Report on Roads and the Utilities.
The Parliamentary Under-Secretary of State, Department of Transport (The Earl of Caithness): My Lords, my honourable friend the Parliamentary Under-Secretary of State with responsibility for roads and traffic announced on 24th July in another place the action we propose on this report. A copy of the government's full response has been placed in the Library.
Baroness Gardner of Parkes: My Lords, I thank the noble Minister for his reply. Having had down an Unstarred Question on this topic for the whole year and now this Starred Question for the last four weeks, does he not think it fortuitous that he is able to give me such a happy and marvellous reply on this last day of term? I thank him.
The Earl of Caithness: My Lords, we always try to please.
Lord Underhill: My Lords, is it not the case that all four local authority associations—and that includes the Scottish Convention—welcomed the recommendations of the Home review as a total package taking the rough with the smooth? Is he aware that by declining to support the recommendation regarding diversionary works and leaving the cost with local authorities, he has endangered the joint support for the package proposed in the Home review?
Why have the Government also ignored the agreement reached between the National Joint Utilities Group and the local authorities as to the type of body that should be set up to handle street works matters, and instead are proposing a street works advisory council with no direct representation from the utility organisations or from local authorities, and without any teeth?
The Earl of Caithness: My Lords, there were 73 recommendations in the Home Report and the Government have accepted 72 out of them, which I think is a satisfactory solution. My honourable friend is going to meet the local authorities in the near future to discuss the other recommendation over which they are a little concerned.
Lord Underhill: My Lords, may I ask the Minister a question relating to my last point? Will they also discuss again the type of joint body? If the utilities group agree with the local authorities as to the type of body that should be set up, why should the Government throw that on one side?
The Earl of Caithness: My Lords, if that matter is raised I am sure that my honourable friend will be happy to discuss it.
Baroness Gardner of Parkes: My Lords, can the Minister also confirm that if these recommendations have the effect that we expect, they will result in considerable saving of public inconvenience and public money?
The Earl of Caithness: Indeed, my Lords, and that will help the motorist and all those who use the roads.
Lord Leatherland: My Lords, can the Minister tell us which is the one recommendation that the Government have not adopted?
The Earl of Caithness: Recommendation 67, my Lords.
Lord Leatherland: My Lords, is he in a position to say, or does he not know, what recommendation 67 says? What is its object?
The Earl of Caithness: Yes, indeed, my Lords, I do know. The noble Lord, Lord Underhill, has mentioned the specific point. The report is in the Library and I am sure that the noble Lord will be looking forward to reading it shortly.
Lord Leatherland: My Lords, if my eyes are failing me and I cannot read it in the Library, what can the Minister do to explain it to us? Or does he not know?
The Earl of Caithness: My Lords, I shall send the noble Lord the paragraph concerned.

Africa: Aid
11.24 a.m.
Lord Butterworth: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is the total amount of (a) emergency aid (b) long-term development aid devoted to Africa since May 1979.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, our system of maintaining statistics does not allow me to provide the information in the precise form requested. However, I can inform my noble friend that for the calendar year 1979 British bilateral aid to Africa was some £231 million, of which £4 million was for emergency aid and £227 million for long-term development. Figures for Britain's share of multilateral expenditure in Africa cannot easily be established for that year.
Between 1980 and 1985 Britain gave over £2.8 billion to Africa through bilateral and multilateral channels. Under the bilateral programme £110 million was for food aid and disaster relief and £1.7 billion for long-term development aid.
Lord Butterworth: My Lords, I should like to thank my noble friend for that full reply. May I ask her what

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response the Government are proposing to the recent resolution of the United Nations General Assembly on this point?
Baroness Young: My Lords, my right honourable friend the Minister for Overseas Development said in a Written Answer in another place on 23rd June, at col. 54:
"I welcome the final resolution on the United Nations special session where all concerned agreed to work together for sustained economic development based on realistic policies".
The emphasis given to the agricultural sector is particularly encouraging, as indeed is the recognition of the role of the private sector.
Lord Hatch of Lusby: My Lords, may I commiserate with the noble Baroness since after we kept her up so late last night she has to be here again this morning; and add my commiserations to the staff also. May I ask the noble Baroness about the second part of this Question? She has answered me before about the British contribution to the International Fund for Agricultural Development, generally accepted as the most constructive form of long-term aid for Africa, and has put that in the context of the contributions from OPEC and the West. Would the noble Baroness consider in her office Britain taking an independent initiative in funding this organisation irrespective of the haggles and discussions that have been going on with the other donors, and put this as a part of British government policy for long-term agricultural aid in the African Continent?
Baroness Young: My Lords, the noble Lord, Lord Hatch, will be well aware of the Government's view on this matter because we have debated it on several occasions in the past. He knows of course the reasons that we have given for the position as it is. I appreciate the noble Lord's particular interest in aid to agriculture in Africa. Between 1979 and 1984 the proportion of our aid to sub-Saharan Africa spent on agriculture and available for spending by that sector increased from 26 per cent. to 30 per cent., and we aim to increase this where we can.
The Earl of Onslow: My Lords, can my noble friend enlighten the House on what happened to the 2,000 million or 3,000 million dollars worth of aid given to Tanzania between 1978 and 1982? Has it not resulted in the forced moving of 8 million peasants into socialist villages, failed to raise the food production of Tanzania, and enabled them to go on garrisoning the Seychelles and keeping an unpopular government in power there? Is this what the British taxpayer spends his taxes on, or not?
Baroness Young: My Lords, I think that the purpose behind my noble friend's question is whether or not we make sure that the money given in aid is used for that purpose, and it is valuable to have that question. Over the years the ODA approval procedures have been refined to ensure that only aid-worthy projects get official support. Special arrangements for monitoring our aid are built into these projects, and the same is true where balance-of-payments aid is concerned. This is given in the form of British goods and services and
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not as a cash grant. Perhaps I could draw my noble friend's attention and the attention of others to the ODA review of 1985 which has just been published. This gives some useful illustrations of how aid money has been spent.
Lord Molloy: My Lords, can the noble Baroness say whether or not any of that aid found its way to South Africa, bearing in mind that every year 50,000 children under five die from malnutrition in South Africa?
Baroness Young: My Lords, so far as projects in South Africa are concerned, we have recently agreed, as the noble Lord will be aware, to give an extra £15 million, which is going to be spent specifically on the black population. Of that money a proportion will go in the form of grants for scholarships.
Lord Oram: My Lords, does the noble Baroness recognise that the overall aid statistics, such as those that the noble Lord has asked for, can be somewhat meaningless unless they are broken down to reveal the nature of the aid? Therefore we welcome the additional information she gave to a supplementary question about aid to agriculture in Africa. In the light of the recent history of famine and the need to prevent future famine emphasis on aid to agriculture is of greater importance. Can she assure the House that it is Her Majesty's Government's policy to increase the proportion of aid that goes to agriculture?
Baroness Young: Yes, my Lords. I appreciate the interest of the noble Lord, Lord Oram, in this matter. As I said in answer to an earlier question, we aim to increase aid to agriculture where we can, although helping agriculture directly relieving poverty depends upon economic growth in the countries concerned. That is why we also finance infrastructure.
Lord Mackie of Benshie: My Lords, can the noble Baroness confirm that all the aid she has mentioned is in the form of grant and none is in the form of loans which seem to be wholly counter-productive?
Baroness Young: My Lords, I do not have the figures broken down in the form that the noble Lord asks for. I do not think it would be right to say that all this aid is in the form of grants. If I can get the information he wishes I will write to him on that.
The Earl of Onslow: Further to the question on agriculture, my Lords, will my noble friend comment on whether it is true that Rhodesian agriculture increased under the pressure of sanctions and the rest of African agriculture production went down under the influence of aid?
Baroness Young: My Lords, I am afraid that that is a question on which I do not have the figures at my disposal. I can tell my noble friend that British aid to Zimbabwe rose from £15 million in 1984 to nearly £24 million in 1985 and that we have made offers of new aid in 1986. We continue to expect to provide substantial help. It is also true that the level of aid in any particular country is kept under review.
Lord John-Mackie: My Lords, much emphasis has been put on developing agriculture. Does the noble Baroness not agree that this should not in any way influence direct aid of food to people who are actually starving?
Baroness Young: My Lords, as the noble Lord will be aware, a proportion of the bilateral aid that we have given has been direct food aid and disaster relief. He may like to know that in the particularly tragic situation in Southern Sudan we have responded swiftly to the urgent need for emergency assistance to help the victims of famine in the Sudan and other drought affected countries in Africa.
The Viscount of Falkland: My Lords, can the noble Baroness enlighten me to what extent our policy on aid to Africa is influenced by the growing cancer of corruption in certain African countries with which we deal? What influence can the Government bring to bear on fellow members of the Commonwealth to put their houses in order in this respect? Would this not be an opportune time to bring that point up and to deal with this matter?
Baroness Young: My Lords, the answer to the first question of the noble Viscount, Lord Falkland, is one that I gave in reply to my noble friend Lord Onslow about the most effective use of aid. But we have said, particularly in relation to the United Nations Fund, that it is very important that the aid recipients in the countries involved should play their part in pursuing sensible economic policies at home.

HMS "Chrysanthemum" and HMS "President"
11.35 a.m.
Lord Bellwin: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will confirm that if the charitable agency, Inter Action Trust, tenders successfully for the two historic landmark ships, HMS "Chrysanthemum" and HMS "President", which are to be sold by the Ministry of Defence, they will look sympathetically at requests for grant aid to maintain and develop the tradition of these ships in the fields of training, education and public service.
Minister of State for Defence Procurement (Lord Trefgarne): My Lords, competitive tenders for the purchase of HMS "President" and HMS "Chrysanthemum" have been invited. Exceptionally in this case, suitable bids will be considered not only on a financial basis but also in the light of the tenderers' proposed future use of the ships. Any future owner of the ships who felt that he qualified for such a grant would no doubt wish to approach the relevant Government department in the usual way.
Lord Bellwin: My Lords, I thank my noble friend for that very helpful response. Will he kindly bring to the notice of his colleagues the rather unusual and very effective work which this agency carries out?
Lord Trefgarne: My Lords, the point my noble friend makes will certainly be taken into account.
Lord Grimond: My Lords, is the noble Minister aware that many people will welcome this Question and will welcome the Government's favourable response to it? May I take it that the Government are familiar with the excellent work done by Mr. Bowman and Inter Action and that they will give that due weight when they come to make a decision on this matter?
Lord Trefgarne: My Lords, that will certainly be the case, but we shall have to consider the tender to which the noble Lord refers in the context of the others that we receive.
Lord Cledwyn of Penrhos: My Lords, may I also welcome what has been said and give my warm support to Inter Action? Will the noble Lord not agree that Inter Action has done splendid work in finding employment for young unemployed people? Does he not agree that they deserve support from the Government and from all of us to the extent that we can give it?
Lord Trefgarne: My Lords, I fear I can do no more than to remind the noble Lord of the answer I gave to earlier supplementary questions when I say that those points will be taken into account.

Business
The Earl of Swinton: My Lords, at a convenient moment after 2.30, my noble friend Lady Young will, with the leave of the House, make a Statement on Sir Geoffrey Howe's mission to Southern Africa on behalf of the European Community.

House of Lords Offices
11.38 a.m.
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move that the Third Report from the Select Committee on House of Lords Offices be agreed to.
Moved, That the Third Report from the Select Committee be agreed to.— (Lord Aberdare. )
The Report was as follows:
1. Refreshment Department
The Committee approved a statement of Accounts for the financial year 1985/86.
2. Staff of the House
The Committee authorised revised scales of pay for Refreshment Department managerial staff. Doorkeepers and Attendants.
The Committee also agreed that allowances payable to Hansard Editors and Reporters and to Doorkeepers for late night attendance should be included as part of their pensionable emoluments.
3. Parliament Office
The Committee were informed that Mr. R. H. Walters had replaced Mr. D. R. Beamish as Secretary to the Leader of the House and Government Chief Whip.
4. Revised Scales of Pay
The Committee confirmed the application to staff of the House of Lords of the following Civil Service memoranda:—
CM/743—Restructuring of secretarial grades
CM/744—Revised scales of pay for messengerial and cleaning grades
CM/747—Revised scales of pay for Librarian and Catering Managerial grades
CM/748—Revised rates of pay for other grades up to the rank of Chief Clerk
CM/749—Revised rates of pay for grades above the rank of Chief Clerk
CM/752—Unified grading for Library and Record Office staff
CM/753—Proficiency Payments
CM/754—Responsibility Allowances
GM/377—Revised fees for academic consultants.
5. Hansard Reporting Staff
The Clerk of the Parliaments informed the Committee of the impending retirement of Mr. W. Frensham, from the post of Deputy Editor, and the appointment of Mr G. R. Goodbarne in his place.
The Committee authorised a revision in the scale of fees and allowances for late night attendance and sanctioned additional payments to reporters for long hours on days when the House sits before noon.
6. Doorkeepers
The Committee authorised provision for the employment of an additional temporary Doorkeeper during prolonged absences of permanent staff.
7. Library
The Committee authorised the casual employment of Library students for a limited period.
8. Society of Clerks
The Committee authorised provision for a share of the expenses of the meeting of the Society to be held at Westminster in September 1986.
9. House of Lords' Fees
The Committee approved a revision in the scale of charges for photocopying.
10. Superannuation
The Committee were notified of the following awards made under the House of Lords Staff Pension Scheme.

(a)Pension and lump sum to Mr. A. A. Barber, Second Principal Doorkeeper, who retired on 1lth April 1986.

(b)Pension and lump sum to Mr. A. W. K. Chittil, Senior Doorkeeper, who formally retired on 3rd July 1986.

(c)Pension and lump sum to Mr. C. E. Houghton. Executive Officer, who formally retired on 7th July 1986.

(d)Pension and lump sum to Mr. M. T. Nevin. Attendant, who retired on 10th April 1986.

(e)Short service payment to Miss C. M. Kay, Clerk, who resigned on 9th July 1986.

(f)Short service payment to Mrs. L. Cowan, Cleaner, who resigned on 25th April 1986.

(g)Widow's pension and lump sum benefit to Mrs. E. F. Sleeper. valid nominee of H. G. Sleeper, former Cellarman, who died on 23rd April 1986.

(h)Supplementary death benefit to I. A. Farmer, administrator of estate of Mrs. E. Farmer, former Cleaner, who died on 25th December 1985.

Lord Bottomley: My Lords, may I, under paragraph 8 of the Select Committee Report and by leave of your Lordships' House, draw attention to the 75th anniver-sary of the Commonwealth Parliamentary Association and ask your Lordships to take note that the membership today is 110 different Parliaments and legislatures? The 32nd annual conference of the CPA is being held in the United Kingdom this year and is being opened by Her Majesty the Queen in September. I am sure it is your Lordships' wish to express a welcome to the 300 representatives who will be coming from Commonwealth countries.
Baroness Vickers: My Lords, may I support the noble Lord in his observation, as a member of the
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CPA conference for many years and as a delegate. It has been very successful in creating understanding between 103 different countries which will be attending this coming conference. I should like to say that we hear mostly from Back-Benchers. It gives them one opportunity to express themselves to each other and to communicate. I hope that this conference will be known, as many of them are, as a friendly conference.
The Chairman of Committees: My Lords, I congratulate the noble Lord, Lord Bottomley, on finding a very insignificant sentence in the House of Lords Offices Report in order to draw attention to the annual conference of the CPA. I am sure that the whole House will join with him and with the noble Baroness, Lady Vickers, in wishing the CPA a very successful conference in September.
On Question, Motion agreed to.

Housing and Planning Bill
11.40 a.m.
The Minister of State, Department of the Environment (Lord Elton): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That it be an instruction to the Committee of the Whole House to whom the Housing and Planning Bill has been committed that they consider the Bill in the following order—

Clauses 1 to 4,

Schedule 1,

Clauses 5 to 10,

Schedule 2,

Clauses 11 and 12,

Schedule 3,

Clauses 13 and 14,

Schedule 4,

Clauses 15 to 26,

Schedule 5,

Clause 27,

Schedule 6,

Clauses 28 to 36,

Schedule 7,

Clause 37,

Clause 29,

Schedule 8,

Clauses 30 to 35,

Clause 38,

Schedule 9,

Clauses 39 to 42,

Schedule 10.— (Lord Elton. )

On Question, Motion agreed to.

Rate Support Grants Bill
11.42 a.m.
Lord Elton: My Lords, I beg to move that this Bill be now read a second time.
The Bill has been certified in another place as a Money Bill and your Lordships, by convention, will not wish to offer amendment to it. It does, however, need your Lordships' consent and your Lordships will therefore wish me to explain both the reason for it and the way in which it works. This I shall briefly do.

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The need for this Bill arose because of the effect of the High Court's declaration in the case brought by Birmingham City Council. In this action Birmingham challenged the way the Secretary of State had exercised his powers in the 1986–87 settlement to determine multipliers to limit changes in local authorities' grant entitlements.
Under Section 59 of the Local Government, Planning and Land Act 1980, the Secretary of State has a power to determine block grant multipliers to limit the change in the amount of block grant payable to an authority from one year to the next. Both Her Majesty's Government and local government generally had hitherto always taken this to mean that the Secretary of State could set "safety nets" to limit authorities' grant decreases and "caps" to prevent undesirable grant gains by some authorities at the expense of all the others. These powers have been used, in each year since the block grant system was introduced in 1981–82, to limit some factors affecting grant entitlements but not others. We have always believed that the Secretary of State must be able to select which factors to limit. Otherwise, he would have to limit losses regardless of their cause, including, for example, those resulting from decreases of grant caused by an authority's own spending decisions or by an increase in its rateable resources. This would clearly be nonsense.
Over the years the Secretary of State has considered it appropriate to limit the effects of certain sorts of changes that have been made in the block grant system. For example, where local authorities have lost grant as the result of improvements in the method of calculating grant-related expenditure assessments, he has applied a safety net to limit those losses. Conversely for 1986–87 he set caps to constrain the grant gains that some authorities made as a result of the abandonment of expenditure targets and penalties in the 1986–87 settlement. Caps were also applied to eliminate the effects of grant changes as a result of abolition of the GLC and the metropolitan county councils on the rates and precepts paid by ratepayers to all the authorities in their areas.
The exercise of the powers in this way has had the general support of the local authority associations and has never previously been questioned. It has been the basis for determining multipliers in rate support grant reports for each year since 1981–82.
The judgment in the Birmingham case recorded that the Secretary of State had not exercised his power to determine a multiplier for the purpose specified in Section 59(6)(a) of the 1980 Act as he had purported to do. The Secretary of State had determined multipliers so that they limited changes in block grant due to particular factors, rather than simply limiting changes in the amount of block grant payable for 1986–87 to a particular authority from the amount payable for the previous year. A copy of the judgment has been lodged in the Library of the House.
The effect of this judgment is that the present law is very seriously flawed because it does not allow the Secretary of State to limit changes in grant due to particular factors. He can only limit changes in the total amount of grant payable to an authority for one year compared to the next.
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The discovery of this flaw in the legislation has far reaching effects. It means that if no action were taken to correct matters, all the multipliers determined for 1986–87 would have to be recalculated on the new basis. This would lead to wholly unacceptable grant changes for authorities after they had made their rates. Some authorities would benefit, but many would have to deal with grant losses which they could not have anticipated.
But that would be only the start, because the judgment casts equally serious doubt on all safety net and cap multipliers determined under Section 59 in all the RSG settlements since 1981–82. So. if we had taken no remedial action, we would have to start by recalculating grant entitlements for 1981 and then roll the calculations forward for every year on the basis for setting multipliers which, following the Birmingham case, we now know the law requires. This would be no small task. Since 1981 almost 1,500 safety nets and about 170 caps have been set. But that would not be all; the practical effects on local authorities would be more worrying still because the recalculations would lead to unexpected and possibly completely unmanageable grant losses for many authorities. It is to avoid these consequences that I ask your Lordships to agree to this Bill this morning.
Its purpose is to preserve the position as we believed it to be before the Birmingham challenge. It will do so in three ways.
First, Clause 1 will validate all past determinations of multipliers up to and including those made in the RSG reports for England and Wales for 1986–87.
Secondly, Clause 2 will provide clear and unambiguous powers to ensure that the Secretary of State can in future limit the effects of particular factors on local authorities' grant entitlements. The new power will enable the Secretary of State to determine multipliers for the purpose hitherto practised and now shown to be ultra vires; that is to say, to limit or avoid the effects of any difference between the year in question and the previous year in any of the matters relevant to the calculation of block grant upon either of two things—the amount of block grant payable to an authority or the contribution made, or to be made, by ratepayers.
Thirdly, the Bill clarifies and amends certain other minor aspects of the legislation where current practice might be open to challenge on technical grounds. These changes are contained in Schedule 1.
Paragraphs 1 to 3 of the schedule clarify the existing law relating to grant-related poundages.
Paragraphs 4 to 7 make a number of amendments consequential to Clause 2 of the Bill. Paragraph 4(4) makes an additional provision enabling the Secretary of State to specify an upper limit on a multiplier.
Paragraphs 8 and 9 amend the law relating to the explanation of determinations in RSG reports. Sections 60 and 61 of the 1980 Act require the Secretary of State to specify the considerations which lead him to make his determinations. It would be impossible in practice to meet this requirement in respect of every consideration. Paragraphs 8 and 9

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therefore provide that the reports will only give such explanation as the Secretary of State thinks desirable of the main features of determinations specified in the reports. But I repeat the assurance given in the other place by my honourable friend the Minister for Local Government and the Countryside that it is not our intention in any way to reduce the amount of explanation currently being given by the RSG reports.
Paragraph 10 of the Schedule introduces a restriction on the Secretary of State's powers to redetermine block grant multipliers determined at the time of a rate support grant settlement. The present provisions of the 1980 Act give the Secretary of State discretion to redetermine all multipliers in a supplementary report in the light of later expenditure information. The Secretary of State has never used the power in this way because the result would have been a completely unacceptable degree of uncertainty for local authorities as to their grant entitlements. We thought it right, therefore, to limit the Secretary of State's power to redetermine net and cap multipliers so that he may do so only when there has been an error in the application of the principles to the original determination on the basis of the information then available.
In the debate on the Statement on 10th April the noble Baroness, Lady Stedman, asked about our commitment to correct an error in the safety nets and caps on the grant effects of abolishing the GLC. On the assumption that she still wants me to deal with it, I shall deal with it now. In the settlement there was an unfortunate error in the estimates of the highway maintenance expenditure which each borough was likely to inherit from the GLC. As a result, some authorities were given too much protection from the effects of abolition, while others were not fully protected. We have announced our intention to correct this error in the 1st Supplementary Report for 1986–87. Because the Bill provides for the correction of errors in the application of the principles used to calculate the original determinations, it will have no effect on our commitment to correct this error. The error in the settlement means that some authorities got more grant than they needed to ensure that abolition was financially neutral. They will, of course, lose from the correction of the error. However, we have made it clear that we intend to apply a tight temporary safety net to these losses, so that authorities do not suffer unreasonable grant losses in the middle of the year for which they have had no chance to make allowance in setting their rate.
Paragraphs 11 and 12 clarify the powers the Secretary of State has used to adjust the amount of grant payable to a local authority to ensure that the total payable equals the grant available. This will make certain that the legislation enables him to follow the accepted practice in close-ending grant for 1986–87 and to remove any risk of challenge in respect of previous years. For the future, the Secretary of State announced on 22nd July that he intends to introduce legislation in the autumn, following consultation, to abolish close-ending. This is in order to give local authorities more certainty about their grant entitlements so that they can plan their budgets with greater assurance.
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Paragraph 13 relates to the returns of expenditure information to the Secretary of State. The proposed changes will enable the Secretary of State to disregard information which it is not "reasonably practicable" to take into account and to make appropriate assumptions where no information is available. I assure your Lordships that the Secretary of State will make absolutely clear the date when it will no longer be reasonably practicable for further information to be taken into account.
I hope that from what I have said your Lordships will recognise that the retrospective element in this Bill, of which we have from the start made no secret, is not merely desirable but necessary. The alternative would be financial confusion of an unacceptable degree. If the effect of the retrospection were to alter past actions your Lordships would, I think, have to look at it with very grave suspicion. But it is not. It is, on the contrary, to avoid the necessity of such an alteration. Since the effects of such an alteration must at present be completely unknown and unpredictable to those concerned, there can be no advantage in pursuing it. Your Lordships will therefore, I hope, feel able to give this measure your formal approval as the penultimate, decorous and responsible action before you take the summer break that your Lordships have so nobly earned. I beg to move that the Bill be now read a second time.
Lord Leatherland: My Lords, before the noble Lord sits down, will he arrange for this statement to be published in Hansard, or otherwise, so that all the members of his party sitting behind him will be able to acquaint themselves with the situation?
Lord Elton: My Lords, the members of my party sitting behind me have been acquainted of the situation by listening to my words. The members of my party not sitting behind me, who may be as numerous as those who are not sitting behind the noble Baroness. Lady David, will have the normal opportunity to read Hansard if they so wish. Perhaps not many of them will.
Moved. That the Bill be now read a second time.—(Lord Elton. )
11.53 a.m.
Baroness David: My Lords. I thank the Minister for explaining this Bill, but cannot believe that he can have had very much pleasure or pride in doing so. It is a shabby little Bill, and the Government have been forced to bring it forward because of the shortcomings of the previous legislation. The Government have been caught out.
In spite of the large number of local government Acts, finance Acts, rates Acts—I have found out that this will be the tenth rates Act—passed in this Government's efforts to control local authorities and their spending, loopholes have been found—or perhaps it would be fairer to say that the Secretary of State failed to observe the rules that he should have observed and has been found out and caught.
This Bill results from the successful court action brought by Birmingham City Council against the Secretary of State, where it was found that the Secretary of State had acted ultra vires in exercising his

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powers to cap grant gains between one year and the next under Section 59(6) of the Local Government and Planning Act 1980. The crux of the case is the setting of the base positions in the previous year from which increases in grant were measured. All local authorities thought that this year's RSGs would be based on the actual grants payable last year. That was the position throughout all the meetings and consultations with representatives of local authorities until the Secretary of State's announcement last December. It appears that what happened between the end of the consultations and that announcement was that some London authorities had made representations to the Secretary of State, who then changed his mind and based this year's RSGs not on the actual grants payable in 1985–86 but on what were called "deemed" grants, notional grants—some say "dreamed-up" grants by the Secretary of State. This announcement shocked and surprised local authorities. For Birmingham the difference between the actual grant and the deemed grant was £7·2 million.
After protests to the Secretary of State, the council decided to go to court. It won its case. When the case came to court the Government conceded the strength of Birmingham's case and as a result an order was made in favour of Birmingham and the department was ordered to pay the city's costs. The Secretary of State's representative in court admitted that the Secretary of State had acted illegally.
On 10th April, a few days before the court's ruling on the following Tuesday, there was a statement entitled "Block Grant Multipliers". This mystifying announcement was to inform Parliament that the Government intended to introduce retrospective legislation to pre-empt the decision expected in the High Court the following week and thus to deny the ratepayers and council of the City of Birmingham the £7 million which the court was to declare to be rightfully theirs.
The legislation promised, of course, is this Rate Support Grants Bill. Clause 1 of the Bill validates the approved block grant determinations and, thereby, the Secretary of State's decisions made on or before 21st January 1986. That means they cannot be challenged. This Bill will retrospectively legitimise all decisions made by the Secretary of State under Section 59 of the Local Government, Planning and Land Act.
This clause happens to catch another council which is in the middle of court proceedings: Nottinghamshire County Council. They had obtained leave from Mr. Justice Mann for a judicial review of decisions made by the Secretary of State. Their case is based on wholly different facts and legal considerations from those in the case that Birmingham won in the courts. That case is due to be heard on 17th October, which will be before the date on which this Bill can receive Royal Assent, as the House of Commons does not return from Recess until 21st October. Nottinghamshire will be left high and dry, whatever the court decides, as a result of this Bill.
I hope that, in replying to this debate, the Minister will make some comments on the unfortunate position Nottinghamshire County Council finds itself in and on what action the Government may take if
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Nottinghamshire wins. The sum of money involved in this case is larger than in the case of Birmingham: £18 million.
The retrospective nature of the proposals is what causes great concern to all local authorities and indeed to many other people too. This is not the first time the Government have resorted to such action in their dealings with local government, and I will give a few examples. In the Local Government Act 1986, Section 7 changed the law relating to sale of local authority mortgages after 24th July 1985. In the Local Government Act 1985, Section 91 makes unlawful payments by the GLC and the Metropolitan County Councils to voluntary organisations or other local authorities after 24th July 1984. In the Local Government Finance Act 1982, Section 8 legalised the effective reduction in local authorities' block grant for those who had not complied with expenditure guidance issued previously by the Secretary of State for the 1981–82 financial year.
The new Secretary of State for the Environment himself has a good pedigree in retrospective legislation, to follow the example of his predecessors. As Secretary of State for Transport, he legislated to overturn a decision by the courts in a case brought by the GLC involving payments to London Transport. This is not a record to be proud of or one to endear central government to local government.
The Long Title of the Bill says that it is an Act to validate certain block grant determinations already approved by the House of Commons and is designed to clarify or amend the law relating to rate support grant. I have already referred to the validation of the block grant determinations, but I should like to say something about the other half of the title,
"to clarify or amend the law relating to RSG."
That is a consummation devoutly to be wished, but, as for Hamlet, there are snags. It is unlikely that the proposals will result in greater clarity. The current arrangements for distributing RSG are, I guess, incomprehensible to quite a large number of your Lordships, MPs and local councillors, let alone the ratepayers and the general public.
Think of the jargon, my Lords—block grant, multipliers, nets, caps, close-ending (I am glad that is to end), tapers, grant recycling, targets, penalties, claw-back, flow-back, disregards and disaggregation, to name but a few. The ACC pamphlet Understanding Block Grant is a valiant effort to be helpful, but even with it the lingo to the average ratepayer must be mumbo-jumbo of a very high order. Even we cannot be expected to master all the intricacies of the system. This is an important consideration.
In a recent case brought by Nottinghamshire which went to the House of Lords, the noble and learned Lord, Lord Scarman, voiced his concern that decisions made by the Secretary of State and approved by the House of Commons were not for the courts to pass judgment on, as they were matters of political judgment. The noble and learned Lord, Lord Scarman, said in December 1985, in considering whether the Secretary of State had acted reasonably:
"it would be necessary to find as a fact that the House of Commons had been misled: for their approval was necessary and was obtained to the action that he proposed to take".
It is not suggested that the Secretary of State would

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consciously intend to mislead, but the proposals in this Bill will result in a reduction in the level of explanation to be included in rate support grant reports, and must raise the possibility of Members of Parliament being asked to take important decisions without a full and clear explanation of the basis on which proposals have been framed; and there is no certainty that they will have been understood.
Clause 2 is a perfect example of how the Bill will not clairfy the law. Clause 2(4) gives the Secretary of State wide powers to set base positions with which to measure grant gains and losses between years. Surely the Secretary of State should specify in this report to Parliament the considerations which have led him to choose a particular base position. This should also be subject to full consultation with the local authority associations. It is worth noting that for the 1986–87 settlement, the Secretary of State adopted a base position which had not been subject to consultation with the associations—hence the Birmingham case.
The wide discretion to be available to the Secretary of State is clear from phrases such as,
"to such extent as the Secretary of State thinks desirable"—
that is in Clause 2(3)—and,
"as he thinks appropriate"
in Clause 2(4). Paragraphs 8 and 9 of Schedule 1 will reduce the amount of explanation which the Secretary of State is required to include in rate support grant reports. He will be less accountable to Parliament. It is more explanation, not less, that MPs need. And there are other examples in the schedule which would show the Secretary of State seeking wider discretion, but this is not the time to enlarge on that. The fact is that he is taking to himself in this Bill very wide powers indeed, which I should have thought might be a worry to the Conservative Party if there were a change of government. But Parliament will be less well informed, as indeed will be the local authority associations.
As this Bill has been certified a Money Bill, we are not going to have the opportunity to question the detail of the Bill in Committee. Some of us were a little surprised that it was so certified. Normally the Opposition—indeed, Parliament—is aware from early on that a Bill is a Money Bill. It is obvious in the case of the Finance Bill. But here I believe it came as a total suprise—a bolt from the blue, as my honourable friend Mr. Jack Straw described it; and he thought that the Ministers dealing with the Bill were as surprised as he was. They knew of the likelihood only on the day of the Report stage and Third Reading in another place.
If I am in order, may I ask the Minister when he replies to give some explanation to the House as the two Acts which this Bill seeks to amend—the Local Government, Planning and Land Act 1980 and the Local Government Finance Act 1982—were not certified as Money Bills and we had ample opportunity to discuss them in this House. Also, Section 1(2) of the Parliament Act refers to a Bill being certified when it deals with the imposition of charges out of funds provided by Parliament or their variation. This Bill does not deal with the imposition of charges; no Money Resolution was attached to it and in no way does it affect the amount paid out of funds levied by
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Parliament by way of RSG. It deals only with its detailed allocation and a narrow aspect of that—multipliers. And there are many matters dealt with in the Bill which have nothing to do with the imposition of money provided by Parliament; for instance, the wide powers conferred on the Secretary of State, in particular paragraphs 8, 9 and 13 of Schedule 1, to which I have already referred.
To sum up, we do not like this Bill. The fact that it has had to be brought forward illustrates how hurried and how bad has been the legislation that this Government have churned out over the past seven years. There is evidence of that in all the Bills we have seen. Just look, my Lords, at the hundreds of amendments which the Government have to introduce to them when they reach this House. That cannot be done with this Bill. We would not deny that calculating RSG is a complex, complicated and technical matter. But this Government must stand condemned for the chaos that they have caused in local government and for the way in which they have attempted to manipulate the system to help their political friends in local authorities and hurt their opponents. Their behaviour has been neither fair nor just.
I have one final question for the Minister. There was a hint during the Report and Third Reading stages in another place that Birmingham might be compensated in some way for the fact that this Bill wipes out the courts decision that they were entitled to their £7.2 million. May I ask him whether that is to be the case? I hope that what I have said about Nottinghamshire will also be kept in mind.
12.7 p.m.
Baroness Stedman: My Lords, I should first like to thank the Minister for introducing this Bill, much as we dislike it, and I also take the opportunity of thanking him for the answer to my question of some weeks ago when he promised the correction at a later date. It would seem to be a satisfactory way of dealing with the error, though we regret that it had to operate in that way from the start.
We all know that the Bill is before us because a number of authorities have challenged the way in which the block grant system has operated over the past few years. Indeed, it might be an interesting Recess exercise if some of us could find out exactly how many judgments have gone against the Government in the various fields in the course of this Parliament. What this Bill does is to validate the way in which the powers to determine the multipliers have been used since 1981, and also to determine the precise powers that are needed to continue these practices in the future. That means that it is retrospective legislation, and on these Benches we are critical of retrospection in any form and we deprecate the use of it. On the other hand, if we do not have this Bill then the grant system will collapse, so we shall support it, but unwillingly
We are concerned about the use of paragraphs 8 and 9 in the schedule, that reports will contain such explanations as the Secretary of State thinks desirable of the main determinations specified in the reports. Until now, one of local government's complaints has

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been the difficulty of discovering all the considerations that lead to the figure finally given by the department and, in spite of the noble Lord's assurance and that of his colleague in another place, surely the wording here makes it possible for even less and not more informa-tion to be given by the Government. This can only make life in local government even more difficult. It is leaving a wholly subjective power in the hands of the Secretary of State, to whom we believe that Clause 2 gives far too much power anyway. It also means that Parliament and local government will be denied the information on which decisions have to be based.
For years now, local government has complained about the uncertainty and the complexity of the system; that it is not objective; that the goalposts have been moved far too often; and that each year it has brought a new system for settling RSG and new rules for local councils to content with. The announcement last week of more legislation next Session will bring even more uncertainty to the councils' financial planning. Previous attempts to restrict councils' spending have clearly not worked. Councils which are supposed to be rate capped are increasing ther budgets by 20 to 25 per cent. and the crackdown on capital spending only worsens councils' ability to undertake the much needed repair and building work.
One might have hoped, while clarifying the law, that the Government would also have tried to give local authorities the freedom and the planning ability for which they have been asking for so long; that there might have been some attempt to make the burden lighter on those who are trying to give the electors the services they both want and need. But local government has had an extremely difficult job under the present Government policies and it would be interesting to know if the local authority associations were properly consulted in the drafting of this legislation.
We are also concerned about the references in Schedule 1 to classes of authority. Can the Minister expand on this a little more? Does it mean that the amount local authorities receive will depend on yet another new factor of class with no regard to the special difficulties and needs of some of the local authorities? Why must we have the classes? Is it to make it easier to transfer functions? And if so—with my suspicious mind—why? Surely not in readiness for yet another reorganisation of local government?
My Lords, this is the last day of term and we have all got the pre-holiday spirit, I feel, with no hope of any detailed discussions or of making changes to this Bill. So it only remains to me from these Benches to sum up by saying that we deplore retrospective legislation, but regretfully accept the need for it in this case. We are suspicious of classes of local authorities, and we are sorry that local authorities have not been brought more fully into the discussion of the Bill. Above all, we regret the inability of the Government to get it right since 1981. We hope, and I am sure the Minister shares that hope, that this time, even if it is retrospective, this Bill is right and will work.
Lord Elton: My Lords, I am of course by convention grateful to the noble Baronesses for their reply to my speech, although I am not at all sure I am entirely happy with the content which they put into those
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speeches. I think there is still a constraint upon me to be brief, and therefore I will reply directly only to the principal point made. If it appears appropriate to do so later, 1 will add to what—
Lord Harris of Greenwich: My Lords, I know that at this stage the noble Lord, the Minister, has said there is some form of constraint upon him to be brief. However, given the fact which the noble Baroness. Lady David, pointed out, rather surprising all of us, that this is a money bill and therefore the remaining stages of the Bill will be taken immediately after the Second Reading, a number of us hope that the Minister will give full replies to these questions.
Lord Elton: My Lords, of course I shall disport myself at length at the despatch box, if that gives pleasure to the noble Lord and to the rest of your Lordships. But I am not certain that on the eve of our departure for the holiday this will be welcome to all.
The purpose of the Bill is very straightforward. Following the Birmingham case, it is clear that there are serious shortcomings in the present legislation governing the determination of block grant multipliers. I am no defender of the present system of paying for local government and your Lordships will know that the whole system is under consideration, following the publication of our paper under that name. However, it is essential that we have the present system in good working order and that the statute means what everybody hitherto had taken the statute to mean. I may tell the noble Baroness. Lady David, that in fact arrangements challenged by Birmingham were made in perfectly good faith and recognised as such by practitioners in the field. However, they had a perfect right to challenge in the court and they won, and the court said that the law did not mean v. hat we thought it meant.
Had we proceeded then simply to respect the law as it was then interpreted, we would have arrived in the most appalling muddle; in fact some local authorities would have sustained losses which they could not predict and could not sustain. Therefore, I do not apologise for bringing the Bill in, though I recognise that it is unfortunate that it was necessary. The noble Baroness, Lady David, at one stage inferred that my right honourable friend, the present Secretary of State, was in some way given to retrospection. We are not actually discussing transport matters at the moment, and I do not think it would be right to comment on that, but I would say that my right honourable friend was still Secretary of State for Transport when the Government announced their intention to proceed with this Bill. Therefore the noble Baroness is trying to add one error to another; she is actually in error herself. As I say, without this legislation it would be impossible to operate the block grant system in the way that has been understood and accepted since the system was introduced. The Bill corrects these shortcomings for the future, and removes the uncertainties over grant entitlements for previous years.
The noble Baroness, Lady David referred to the question of compensation for Birmingham, but before I reply to that I think I had better take up her point on what she called the base position in Birmingham.

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The issue, if I may courteously correct her, is not the 7.2 million figure which the Opposition claim Birmingham will lose because of the Bill. This figure is the difference between the estimate of grant payable to Birmingham for 1985–86 at the time of the 1986–87 settlement and the notional base against which grant credit increases were measures for caps. But the effect of the Birmingham declaration is that under the present law the Secretary of State cannot continue the accepted current practice of limiting grant changes resulting from particular factors, whether from the estimate of grant payable or a notional base. It is this flaw which the Bill is designed to put right.
We have, however, taken note of the representations made during the passage of the Bill and given an assurance that we will consider Birmingham's case for additional resources from DoE programmes. My honourable friend the Minister for the Enironment, Countryside and Local Government assured Birmingham M.P.s at the Commons Report Stage that Ministers would take note of the representations received during the progress of the Bill and that careful consideration would be given to that request, as I have mentioned. But I should also mention that Birmingham came out of the RSG round with £20 million extra, and therefore I think that should be borne in mind.
As to Nottingham and Bradford, we have made no secret of the fact that the Bill has implications for Nottinghamshire's court case. We consider that the proceedings are sterile and academic, following the Government's decision to rectify the shortcomings in the existing law revealed by the Birmingham case. Nevertheless, we have offered to concede the case on the grounds that Nottinghamshire's multipliers of 86–87 were invalid because of the shortcomings in the law identified by Birmingham. So far, my Lords, they have refused to accept that proposal.
The noble Baroness, Lady Stedman referred to the introduction of classes of authority. Classes are in fact already in legislation and are specified in section 59(9) to 59(11) in relation to multipliers, and the same definition will apply, so that the statute makes no change to the status quo. Indeed, I hope your Lordships will not feel that the Secretary of State is being given sweeping new powers in any respect, because the purpose of the legislation is simply to return matters to what was supposed to be the status quo ante. I repeat the assurance which I gave, if I may say so, after the noble Baroness wrote her speech but before she delivered it: that the change in the statutory requirement to give information will not in any way reduce the information given. It is merely to reduce a requirement which might be perceived in the law to give impracticable amounts of information and we should again be faced perhaps with a challenge which would mean that there had to be new legislation. It is purely precautionary, my Lords.
I hope your Lordships will accept that this Bill is necessary for the clarification of the law and to allow matters to go forward as they have in the past under the eye of Parliament.
Baroness David: My Lords, before the noble Lord sits down, has he anything to say about
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Nottinghamshire, following the way in which he said that the representations from Birmingham were being paid attention to? Is the same thing going to happen in relation to Nottinghamshire? I understand the case has been conceded.
Lord Elton: My Lords, I am authorised to add to what I said that our offer to concede the case on the same grounds as those relating to Birmingham, and to meet Nottinghamshire's costs, still stands. So far the council has refused.
The noble Baroness raised one point to which I did not refer. The question whether or not a Bill is a Money Bill is for the Speaker of the House of Commons, and his decision is final. I have a list of the number of matters which he considers in making that decision, but as his decision is final perhaps I may write to the noble Baroness rather than read them out now. I commend the Bill to the House.
On Question, Bill read a second time; Committee negatived.
Then, Standing Order No. 44 having been suspended (pursuant to Resolution of 8th July), Bill read a third time, and passed.

European Communities (Amendment) Bill
12.22 p.m.
Baroness Young: My Lords, I beg to move that the Bill be now read a second time.
The Bill now before your Lordships' House is designed to give effect to changes in Community law agreed by European Community heads of government last year. Before describing the clauses of the Bill it may be helpful to explain exactly what is entailed, and what is not entailed, in the agreement reached by my right honourable friend the Prime Minister at Luxembourg last December and which is embodied in the document called the Single European Act, printed as Command Paper 9758.
We are all indebted to the Select Committee on the European Communities for its report which has already shed considerable light on the Single European Act and its implications for this country. I shall respond to particular points in the report during the course of my remarks. In order not to take up too much of your Lordships' time now, perhaps I may reserve any comments on the report of the Committee on Delegation of Powers to the Commission (HL 228) to the end of the debate.
The origins of the Single European Act lie in a widespread feeling among all member states of the Community that, after nearly 30 years, the Community must adapt itself to modern require-ments. The Treaty of Rome has served us well. Its central thesis, that peace and democracy in Europe could best be cemented in the bedrock of practical economic co-operation, has proved entirely valid. It is the treaty which has opened up a tariff-free market in Europe and which, through the common commercial policy, has enabled us to fight for our interests in international trade. But the treaty was written in the 1950s—in Europe where the assurance of food supply was as much a priority as industrial regeneration. It

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predates the massive technological advances of the present day with their consequences for industry Europe-wide. It predates today's knowledge of the impact of industry on the environment and the need to tackle this problem which knows no frontiers. It was written for a community of six nations with a total population of 170 million. It required adaptation for a community of 12 member states with a combined population of more than 300 million.
There was thus a strong sense in the Community—reflected in last year's report on European Union by the Select Committee on the European Communities of your Lordships' House—that too much emphasis had been placed on policies that were suitable to the needs of the 1950s and not enough on policies which would make the Community competitive in the harsh climate of the 1980s; a strong sense that decision-making was too slow and that in particular, almost 30 years after the Community's creation, not nearly enough had been done to complete the single large market in goods and services which is one of the prime objectives of the Treaty of Rome.
The Single European Act is the outcome of the negotiation which followed the Fontainebleau summit. It consists of two main elements. The first is the changes in the EC treaties, which I shall describe. The second are new treaty provisions on European co-operation in the sphere of foreign policy based on proposals put forward by the British Government. These, for the first time, enshrine in international law the agreements and practices of foreign policy co-operation among the member states of the Community which have been built up over the past 15 years. It is the linking of these two elements in one document that gives rise to the title of "Single European Act".
It is only the changes to the Community treaties that fall to be incorporated in United Kindom law. The most significant change, and one which meets a long-standing objective of this country, is that the Community has now committed itself to complete the common market in goods and services by 1992.
In its report on European Union, the Select Committee on the European Communities said:
""The wider the home market in which European industry can develop, the better equipped will it be to cope effectively in the world market. This simple truth, repeatedly emphasised by the Select Committee in their reports, is a fundamental reason why completion of the internal market must not be delayed".
Yet, as your Lordships know, completion of the internal market has been delayed. For example, it took us 17 years to reach agreement on a measure allowing architects to practice throughout the Community; we have still not yet reached agreement on a similar measure applying to engineers; a whole raft of technical standards of considerable importance to our exporters were delayed for some 18 months due to the obstruction of first one, then another member state; at present it is illegal under German law for a German insurance broker to buy insurance on the London market. Nor will you find a pint of British bitter in a Bavarian beer garden—not because the Germans do not want to drink our beer but because they are not allowed to. It still costs the European traveller twice as
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much to fly from Paris to London as it docs the American traveller to fly the same distance between Washington and New York.
Completion of the internal market is not about the creation of a free-for-all in which the weakest go to the wall. It is about giving our industries—particularly in the services sector where we are highly competitive—the opportunity to compete on equal terms in markets which are currently denied to them. In its report on European Union, the committee also said:
"Many of today's problems were not. and could not have been, foreseen by those who drafted the Treaties. The result is that explicit power is lacking in areas important to the internal development of the Community".
The Select Committee went on to conclude that the problems of decision-making:
"must be tackled together and within a comprehensive framework for improvement. If this means amending the present Treaties—and there is much evidence to suggest that it does—the Select Committee believe that the task of amendment should be faced".
The Single European Act embodies a move from unanimity to qualified majority voting for several of the treaty articles which govern the measures needed to complete the internal market. Those changes do not guarantee that agreement will be reached. They do, however, give us a much better chance of attaining our objectives. I hope your Lordships will agree that, in negotiating the Single European Act, we followed closely the advice of your Committee.
There is one point in particular on which I wish to comment because I know that it has caused concern to some noble Lords. In their report on the Single European Act the Select Committee suggest that, desirable as the objectives that I have outlined above may be, increased use of majority voting will remove our power to block proposals and therefore weaken the power of British Ministers, and so of this Parliament, and extend Community competence at the expense of member states. This is one issue on which I part company with the committee. Of course, it is true to say that where new Community measures are agreed member states are bound by them. But it would be misleading to suggest that the Single European Act itself represents an extension of competence. There is no extension of Community competence into areas where it does not already exist. We are not talking about giving the Community new areas of competence. We are talking about making it easier to take decisions in those areas where competence already exists and. most important of all, in areas where we have ourselves long pressed for progress.
Of course the unanimity requirement gives you the power to say, no. But what use is it to be able to say, no when our national interest is to say, yes? We have been striving for years to achieve progress towards the completion of the common market. Your Lordships, too, have pressed the case persuasively. That is what qualified majority enables us to do: to achieve our objectives. Nor do I believe that the power of British Ministers in the Council of Ministers is weakened if from now on. by forming a qualified majority with other like-minded member states, we can push through measures which, at present, are delayed or blocked.

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For those who fear that measures may be proposed which would go against our interests, I should emphasise that we retain three major protections. Where we need unanimity to protect our interests, for example, on the question of tax harmonisation, unanimity is retained. Where we need them, we have secured explicit safeguards enabling us to retain or introduce national measures to protect our high standards in human, animal and plant health. And nothing in the Single European Act affects the ability of member states to invoke the Luxembourg compromise; in other words to state that, because a very important national interest is at stake, discussion must be continued until unanimous agreement is reached. The operation of the Luxembourg Compromise has in no way been changed by the Single European Act.
The second main area in which the changes to the treaty advance our interests, with those of the rest of the Community, is by making specific provision for Community action in the field of research and development and the environment. Here again I should stress that there is no extension of Community competence. There is a long history of Community action in these areas, but until now it has been ad hoc and ill-defined. As a result of the changes incorporated in the Single European Act, Community action in those areas will be subject to clear criteria that reflect our interests.
In their report to your Lordships the Select Committee devotes considerable attention to the new co-operation procedure with the European Parliament. As my right honourable friend the Prime Minister said in another place when she reported on the Luxembourg European Council last year:
"We agreed on procedural changes to improve consultation with the European Assembly. There will be better arrangements to enable the Council to take account of amendments to Community legislation suggested by the Assembly. But in all cases, the last word on such legislation will rest with the Council. There will be no transfer of power on these matters from this House".
The new arrangements that apply to the European Parliament are designed to enable it to play a construc-tive role in decision taking. But those noble Lords who see in that a significant change from previous practice have perhaps not been aware of the consultations that already take place with the European Parliament and of the existing provisions of Community law. The new co-operation procedure for the European Parliament will apply almost exclusively to those articles of the treaty that affect the completion of the internal market, and under which the Parliament must already be consulted on Commission proposals before the Council reaches its decision.
Under the new system envisaged in the Single European Act, the European Parliament will continue to be consulted, as it is now, when proposals are sent by the Commission to the Council of Ministers. A proposal reaching the Council of Ministers may therefore already reflect the Parliament's views. The Council will consider the proposal from the Commission and reach a view on it. But instead of the proposal being adopted straight away, it will go from the Council to the European Parliament in the form in which the Council has provisionally agreed it. The European Parliament will have the right to propose amendments to the text—or, indeed, to suggest that it
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should be rejected altogether. But it can only make such recommendations if an absolute majority of all the members of the European Parliament—I repeat, all the members; that is, at least 260 out of 518—agree to do so.
If the Parliament rejects a measure altogether, it will still be open to the Council to adopt it—by unanimity. If the Parliament proposes amendments, it will be for the Commission to decide whether to incorporate those amendments in its own proposal. Where it does so, the Council can either adopt the amended proposal or, by unanimity, reject it or amend it. In no circumstances will the Council be obliged to approve a measure if it is not satisfied with its terms. If there is no qualified majority in the Council for a revised measure, it will simply lapse after three months.
I agree with the verdict of the Select Committee on European Legislation of another place, who recorded in their report of 26th February that,
"This new procedure enlarges consultation into co-operation: but at the end of the day the European Parliament still has no power to insist and the last word remains with the Council."
The Single European Act also includes provisions dealing with foreign policy that do not form part of the Bill because they do not, and will not, form part of Community Law. Those provisions enshrine in an international agreement the practices and agreements that have been built up over the past 15 years. They strengthen the existing commitment to consult on the economic and political aspects of security questions. They are designed to achieve greater consistency between external policies that are decided within the Community framework on matters such as trade and aid and the foreign policy objectives identified by member states in political co-operation. And they establish a very small secretariat in Brussels to improve continuity between presidencies and help each presidency with the administration of meetings.
Few of your Lordships will dispute the growing need for Europe to speak and act with one voice on foreign policy. Nor will they doubt the greater effectiveness of the member states when we do speak as one. The new treaty provisions on foreign policy enhance our ability to act as one. Recently, the Twelve acted together against Libyan state-sponsored terrorism. They have held meetings with Central American foreign Ministers and supported the Contadora initiative. They will be working intensively together before and at the CSCE review meeting in Vienna in November. And of course they are acting together over the very difficult decisions we face on South Africa.
I now turn to the clauses in the Bill. Under Clause 1 the relevant part of the Single European Act becomes a Community treaty within the meaning of the European Communities Act 1972. Clause 2 covers the agreement by Heads of Government to attach a new Court of First Instance to the European Court of Justice. It involves no extension of the power of the European Court into new areas. It merely reflects the fact that the European Court is currently overburdened with cases and that over half of them—involving disputes about the terms of service of Community employees—could and should be dealt with at a lower level.
Clause 3 provides for a change in title of the European Assembly, which will formally be known as

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the European Parliament once the Single European Act enters into force In this country successive governments have used the term European Parliament in all but formal legal documents. It is the term used by the press, the public, and by all major parties in their manifestos both for direct elections to the European Parliament and the last general election in this country as well.
Clause 3 also incudes provision for the approval of the single European Act for the purposes of Section 6(1) of the European Assembly Elections Act 1978. that section provides that:
"No Treaty which provides for any increase in the powers of the Assembly shall be ratified by the United Kingdom unless it has been approved by an Act of Parliament".
No increase in the powers of the Assembly is involved in the new co-operation procedure. But Articles 8 and 9 of the Single European Act give the European Parliament the right to approve new accessions and association agreements. It is those provisions that give rise to the requirement under Section 6 of the European Assembly Elections Act 1978 for the Single European Act as a whole to be approved by the House. The powers of this Parliament to have the final say in approving new accessions and association agreements are in no way affected. Clause 4 contains the short title of the Bill and consequent repeals.
As the Select Committee acknowledged, the Single European Act achieves the objectives which the Committee recommended in its report on European Union. The changes to the European Community treaties negotiated by my right honourable friend the Prime Minister are practical ones. They are not designed to enable the Community to involve itself in new areas of policy. They are designed to improve the Community's ability to take decisions in those areas where it needs to take decisions in our national interest and in the collective interest.
When we joined the European Community we accepted that our national interest would be best served by acting in co-operation with others in the framework of the Community treaties. Our livelihood depends upon our success as a trading nation. We cannot compete in the world unless we have a large enough internal market and unless we have the ability to develop co-operation across Community frontiers between European companies. It is self-evidently in our interest to play our full part in decisions on Europe's industrial and commercial future.
The emphasis of the Single European Act is on limited change for practical purposes. In describing in another place on 5th December last year the agreement she had reached, my right honourable friend the Prime Minister said that it represented
"an important step towards enabling this country to realise more fully the benefits of our membership of the European Community."
The Single European Act is a significant achievement for this country. I commend this Bill to your Lordships' House. I beg to move.
Moved, that the Bill be now read a second time.—(Baroness Young. )
12.41 p.m.
Lord Bruce of Donington: My Lords, the House is grateful to the noble Baroness, Lady Young, for having set forth her advocacy in such clear and disarming
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terms. We all know the physical stress to which she must have been subjected these past 48 hours. If I may say so, her clarity of diction and presentation certainly has not suffered as a result.
On behalf of, I think, all Members of your Lordships' House I also venture to congratulate the Select Committee of this House, under the Chairmanship of the noble Baroness, Lady Llewelyn-Davies, for the report that her committee produced. May I also, more particularly, and with some temerity in view of the number of distinguished lawyers involved, offer our congratulations to the noble and learned Lord, Lord Templeman, and his sub-committee for the excellent report that they produced at short notice and which, as they indicate in the concluding paragraphs of the report, is not yet completed.
Both reports once again underline the importance of these Select Committees on European matters. They have undoubtedly created a very considerable impact. When the Bill was introduced in another place on 23rd April last, it was introduced together with a discussion on developments of the Community during the preceding six months as a very low key operation altogether. It was not treated as a Bill of significant importance. It was brought forward as a mere logical development of events that had taken place between ourselves and the Community over a period of years and was presented as a perfectly logical consequence of the events that had gone before.
It was only when the Select Committee report of 6th May came not only before your Lordships' House but before another place that the Bill began to assume an entirely new significance. It must be said that having regard to the issues that were involved, and which your Lordships' Select Committee stated were involved, it became necessary for the Government to apply the guillotine in another place to the very lengthy discussions that emerged following the publication of the Select Committee's report.
One wonders why this Bill should have been introduced at this time. I make no complaint about its being the last day before the Recess; that position has to be occupied by one Bill or another. But I ask myself; why the haste'? What are the reasons for a sudden urge being put on this Bill, particularly in view of its constitutional importance? That importance has been recognised not only by the Select Committee as a whole in its first report, No. 149, but also more particularly in the Select Committee report No. 228,
"The Delegation of Powers to the Commission. "
I have been very carefully through the Bill and the Single European Act and have duly amended the Treaty of Rome in accordance with the Single European Act; and I have been very carefully through the reports. It is my considered view that the constitutional issues raised by the reports are of sufficient importance for a Speakers' Conference to have been held upon them. If we are legislating for the future, surely it is far better for all the issues to be most clearly discussed and understood.
It is quite clear from both reports that, first, there is to be a further encroachment on British Sovereignty, as such, and that there is to be a reduction in the powers of the British Parliament. I have only to cite in

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aid the first report, number 149, which states on page 28:
"The powers of the United Kingdom Parliament will be weakened by the Single European Act".
Again, on page 13 of report No. 228 there is reference to safeguards. I must read this to your Lordships because, in my view, it is a paragraph of the utmost importance. Paragraph 39 states:
"There are three main interests to be safeguarded. First, there are the interests of those who will be directly affected by the Commission's decisions. These can"—
and I give deliberate emphasis to the word "can"—
"be secured primarily by adequate consultation before the decisions are taken. Secondly, major national interests may be involved. The route to securing these interests lies in opportunities afforded for Member State participation in the procedures for the exercise of delegated powers. Last, but not least, there is the principle of democracy. The tradition of democracy—exemplified in the United Kingdom's practice in relation to national delegated legislation—requires that legislative acts are not delegated to an executive body (such as the Commission in the EEC) without reference to a legislative body (whether the council or a parliamentary' institution) which derives its authority from the electorate."
It will be noted that in many succeeding paragraphs—I have them listed—the Select Committee in its report gives a whole series of steps that can be taken by the council to achieve those safeguards. That in itself means that the safeguards are not there now, and it is those safeguards to which the attention of the House must be drawn.
What I have just said about the further reduction in British sovereignty and the reduction in the powers of the British Parliament may provoke one immediate reaction of, "So what? The position has not changed very much since the original Act of Accession in 1972 and more particularly since the referendum of 1975". The position has changed quite considerably, because we have always been assured—and the assurances are so many that it would be repetitious to give the House a complete resume of them all—that in all instances where Britain's national interest was affected, there would still remain the right of veto. It was understood by Members of both Houses of Parliament—and it was an impression that was encouraged during the referendum campaign of 1975 and has been ever since—that the veto was the final safeguard. Since then a number of events have occurred.
First of all, in 1982 we endeavoured in the Council to veto an increase in agricultural prices that we did not much like, particularly in view of the general feeding, which was shared on all sides of your Lordships' House and indeed by another place, that agricultural expenditure was getting out of control in any event. So we applied the veto. However, member states other than ourselves did not think that there were grounds for veto. We thought we had grounds; they thought we had not. So, following that, we are left in the position that the veto is really only effective when other states agree with us that the grounds on which we exercise the veto are in fact valid reasons. This is not really a protection of the national interest.
Being a politician, albeit a very mild one, as your Lordships know, I did not pay over-much attention to that at the time because I thought to myself that perhaps the exercise of this veto or the endeavour to do so might possibly be window dressing, that is to say, we
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could formally object and be able to tell the United Kingdom Parliament that we had objected and in the full light of that, if we did not object too hard, nevertheless it would benefit the agricultural interests of the United Kingdom. I must confess to the wicked thought that perhaps the Government did not push their veto too far in view of the benefits that in any case would go to the agricultural community.
But that did not apply in the case of the 1986 budget where once again we tried to apply the veto—not I am afraid with conspicuous success. Once again the other member states presumably did not think that vital British interests were affected. We did, but they did not.
Baroness Elles: My Lords, perhaps the noble Lord will give way. If I am correct, I do not think that the noble Lord has it quite right. It was not a question of a veto. The United Kingdom took the European Parliament to court, and quite rightly, in fact, it won. So the United Kingdom's interests were fully protected.
Lord Bruce of Donington: My Lords, I take the noble Baroness's point. I shall come back to the position of the European Court at a later stage in my remarks if your Lordships will allow me. However, it is quite clear that so far as concerns the Council the veto did not apply.
Of course, the veto is based upon a construction of the Luxembourg Compromise. I have been in correspondence with the noble Baroness about this matter and in fact in her reply she admitted to substan-tially what I have said, that of course it is a political factor and not a legal matter at all. The Luxembourg Compromise has no validity in law. It is a purely political instrument which may or may not be effective according to the political circumstances and pressures of the time. Indeed, the noble Baroness, Lady Young, was kind enough to write to me about this very point on 26th June. I have her prior permission to refer to this letter as I told her at the time that I would mention it today. The noble Baroness said:
"As Geoffrey Howe made clear on 23rd April, the Luxembourg Compromise is not a provision of the Treaty but a component of political reality in the Community".
We shall undoubtedly be hearing later, I sincerely hope, the opinions of distinguished noble and learned Lords as to the real value of that in terms of law, and if I may remind your Lordships, we are of course considering the law. We are considering a proposed law—the European Communities Act and the Single European Act itself.
In her letter to me the noble Baroness was kind enough to conclude:
"In any case, we did not rely on the Luxembourg Compromise to secure our interests when we negotiated the Single European Act.. We secured other safeguards to ensure that our important national interests are protected".
I listened very carefully to the noble Baroness and I shall be very glad when she replies in detail on the second of the two reports, as she said that she would do, and tells us precisely how safeguards have been effected in such a form that they are valid in law. As the noble Baroness said, the Single European Act itself gives not only majority voting but also incorporates new powers within the Commission.

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Anybody who reads the Select Committee's second report will see the structure and functions of those committees that institute regulations and they will find that they do not always protect the position of the British Parliament. I invite your Lordships' particular attention, in the time at my disposal, to the provisions relating to management committees, advisory committees and regulatory committees where the qualified majority also applies and on which represen-tatives of the Commission sit. I hope that your Lordships will carefully note the powers that are in fact given to the Commission in certain circumstances without any reference to the British Parliament, even in cases where British interests are involved.
If your Lordships go through the numerous paragraphs contained in the report H.L. 228— paragraphs 38, 43, 44, 45, 46, 47, 49, 50, 52, 53, 54, 55,56 and 58—you will find there the steps which the Select Committee suggest can and should be taken to protect the interests of the British Parliament in these various fields. In suggesting what could be done, they highlight what is not the position at the moment. If the Bill and its provisions covered these matters at the moment, it would be unnecessary for them to make suggestions as to what could be done, particularly by the Council.
A further point is the question of who is to ensure that the Council will take up any suggestions. There is no power in your Lordships' House to require the Council to adopt measures and lay down procedures in order that safeguards are made adequate for the purposes of the British Parliament. I think that this is a weakness.
The Government's attitude is really very simple—perhaps it is even more terse than was indicated by the noble Baroness's remarks this morning—but very revealing. It is stated in the Government's rejoinder in Cmnd. 9858, paragraph 20:
"The Government is convinced, however, that because majority voting has been introduced in areas where we have a strong interest in the Community making progress, on balance these changes will operate substantially to the advantage of the United Kingdom"!
We have heard from the noble Baroness today instances in which the new arrangements will operate in the United Kingdom's favour, particularly in the field of insurance other than life assurances, which I recall advocating on the United Kingdom's behalf when I was a member of the European Parliament in 1975; and we still have not come in. So the noble Baroness is correct about that. Will she therefore, in her reply, give some indication of what are the disadvantages which she believes will eventuate? We have heard nothing of those; and I am bound to say that the use of the term "on balance" does not exactly inspire confidence.
Laws will be made within the Community and directives will be issued, but they will be issued within the context of Continental judicial systems which I may venture to suggest differ very markedly from our own. I am trespassing here upon fields in which I am not a complete expert, but as a politician I feel bound to pass comment.
I shall give one example only at the present time. British legislation passed by our Parliament tends to be
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precise. We take the utmost care in the precise use of words, and by and large, of course, anyone in the United Kingdom can do anything he likes as long as it is not restricted by law. The Continental system is not quite the same. We rely on the strict interpretation of statute and no account is taken by the courts of the intentions of legislators as indicated, for instance, in Hansard or as very often reflected in Royal Commission reports. We rely on the law as it stands.
On the Continent they do not do things in quite the same way, influenced, as they are in varying degrees, by the Code Napoléon, and where the travauxprepara-toires apply. For example, in Continental courts it is permissible to cite and to place reliance upon parliamentary procedures. Use can be made there, in determining the intention of the legislature, of reports. Moreover, as your Lordships will know, in this country when cases come to court we rely on an adversarial procedure in which prosecution, or plaintiff and defendant, can all be represented by barristers who have powers of cross-examination and examination—except of course, in coroners' courts and, to a limited extent, in the early stages of proceedings in Scotland. On the Continent the procedure tends to be inquisitorial.
This may be all very well, but it has some curious results. On the assumption that we have safeguards, particularly in the realm of tax harmonisation, I would invite Her Majesty's Government to convey to the House how it is possible for the Commission to bring a case against Her Majesty's Government requiring them to put a 15 per cent. VAT charge on new buildings. How has that come about? I believe that the case requires the British Government to deliver the required particulars by 4th September, and I believe they are making an application for an extension until 4th October; but the case will be heard and judgment will be delivered early in the new year. How does it come about that the Commission, on its own initiative, has the right to bring a case against the Government to put a 15 per cent. tax on new buildings? I shudder to think of the effect of this if in fact a judgment goes against this country. What are the Government going to do about that? Where is their veto then? It has no relevance. We already know that in the field of competition the Commission has a right to go direct and enforce its own laws, even in the United Kingdom, with a right of appeal to the European Court only.
Anybody who has been before the European Court knows very well its procedures. They involve the submission of written documents and opinions; interrogatories are carried out in writing. The papers are considered by the Judge Advocate General, who then presents his opinion to the court. The court grants facilities for oral hearing but not for the examination or cross-examination of witnesses of any kind. It quite arbitrarily allocates to all sides the time in which they may make their oral presentations. I have been before that court and I know. When the noble Baroness is dealing with tax harmonisation I ask her also to deal with this. What happens? The ancient privilege of another place (not of this House) to initiate such taxation or increase taxation will be taken away from it without the possibility of intervention by Parliament or government. It will be dealt with directly by the

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European Commission to the Government, for judgment by the court. I think that that is dangerous.
Baroness Elles: My Lords, the noble Lord knows that VAT is contained in the application of the Sixth Directive, which is part of United Kingdom and Community law. The Commission, as the guardian of the treaties, is under a duty to see that that directive is enforced. We have a right to defend ourselves in the European Court. The noble Lord is making rather a meal of this.
Lord Bruce of Donington: My Lords, all I can say is that the noble Baroness's version differs substantially from the views of the Minister, Sir George Young, who said:
"What has happened is that, for reasons best known to itself, the Commission has chosen to challenge those zero ratings"—[Official Report, Commons, 25/7/86; col. 923.]
As the noble Baroness would expect, I have the text of the Sixth Directive. It is an example once again of European legislation. I am bound to say that I cannot see the grounds for all this, but the powers of the European Court are very wide and it can interpret generalities whichever way it pleases on the basis of precedents that have been established. I leave that now. I have already detained your Lordships too long.
I wish to refer to one further matter. The whole drive of the Bill as expressed in the preamble to the Single European Act is European union. What Her Majesty's Government understand by European union (which I understand specifically excludes any kind of federal union) may be considerably different from what other states understand by it. From my experience I know that the nationals of some other states regard European union as equivalent to federal union. That is what they are aiming for. In its report HL 226 the Select Committee of your Lordships' House sets out the three alternative versions of what European union may be.
I know that patriotism has been said to be the last refuge of a scoundrel, in which case we are all scoundrels in time of war and most of us must have been scoundrels at the time of the recent Falklands campaign. Although I fully acknowledge the desirability of co-operating to the utmost in European matters in order to achieve the utmost harmony within practical limitations, I confess that I remain convinced that our country is a country of some importance; our parliamentary institutions surpass those of any other member state and have been in existence much longer. None of the existing continental parliamentary democracies in their present form have been there for more than 40 years. We have been here for hundreds. We should not take lightly any endeavour to alter, from whatever quarter, in whatever way and for whatever reason, the sovereignity of the United Kingdom Parliament. It is my hope that Members of your Lordships' House may reflect the wishes of all the British people. If expressed, they would be broadly in agreement with the concept that I have ventured to lay before your Lordships.
1.15 p.m.
Lord Banks: My Lords, I should like to join in thanking the noble Baroness, Lady Young, for her very
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clear explanation of the contents of the Bill and of the Single European Act. I must confess that I approach the matter from a standpoint very different from that of the noble Lord, Lord Bruce. I suppose that how one reacts to the Bill and to the Single European Act must depend on one's basic attitude to the concept of European union.
We on these Benches, as the House will be aware, have long supported that concept. We believe that Europe's political and economic potential remain great. Europe's population, share of world trade and gross domestic product are not overshadowed by those of the super-powers, and our political experience is considerable. But we believe that our potential in Europe will be achieved only if we act as one; we believe that Europe's influence will be effective only if we act as one. The importance of that influence in upholding democratic government and western liberal values cannot be overstated.
Holding that view, it is natural that we should welcome the discussion in recent years of further advance towards European union. It is natural that we should react with sympathetic interest to the European Parliament's draft treaty and that we should welcome the Genscher-Colombo plan of a few years ago and agree with the Dooge report (the report of the ad hoc committee set up by the European Council) when it said this:
"We must now make a qualitative leap and present the various proposals in a global manner, thus demonstrating the common political will of the Member States. At the end of the day that will must be expressed by the formulation of a genuine political entity among the European States, that is a European Union".
Compared with those high hopes the Single European Act which emerged from the European Summit was something of an anti-climax. Derek Brown, writing in the Guardian on 4th December 1985, said this:
"after an extraordinary non-stop negotiating session which started at 9 a.m. and ended after midnight, the summiteers ended atop a molehill rather than a mountain of change".
I regret that the United Kingdom Government, if I may change the metaphor used by Mr. Brown, were applying the brake, perhaps not applying it as fiercely as Denmark or Greece but nevertheless applying it. However, such advance as we have is welcome.
Not included in the Bill but referred to by the noble Baroness, Lady Young, and included in the Single European Act is the new treaty on foreign affairs co-operation. That is now to cover security matters as well; just how far it will go will be interesting to see. I know the difficulty that there is in discussing defence matters within the EC, but it will be equally difficult to have a common foreign policy, as distinct from co-operation and alignment of attitude, where possible, without involving defence. Some day I hope that these matters will be discussed within the scope of the treaty.
We welcome the commitment to complete the internal market by 1992. After all, about 48 per cent. of our exports now go to our Community partners and it is a United Kingdom interest to secure the freest possible access to the market as soon as possible. I am glad to see that the goal of economic and monetary union is to be written into the treaty. We are of course a long way from that today, but it would be helpful as a modest step in that direction if the United Kingdom

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could now become a full member of the European monetary system.
The regional fund is to be written into the treaty, and I am glad of that because should we make progress toward economic and monetary union, the regional fund will undoubtedly become of even greater significance and importance. The treaty is also to be amended to refer to the need for European co-operation in research and technology. That is vital. We need a European strategy—guidance and direction at European level. I believe that that is necessary if Europe is to remain competitive. Everything will depend on what is done to fulfil the aim now to be set out in the treaty.
The main institutional proposals for change, as we have heard, concern the Council and the Parliament. I am glad that the Parliament is to be called a Parliament officially now, and not an Assembly. In the Council there will be majority voting in certain matters relating to the completion of the internal market. The United Kingdom Government will have less opportunity to block the proposals of others but they will have more opportunity to secure the enactment of their own ideas. We may indeed obtain the free market in insurance for which we have been seeking so long.
The Parliament is to be given limited extra power, mainly in matters affecting the internal market. It is important to appreciate, as the noble Baroness told us, that the power is limited. It covers 10 articles, in five of which Parliament already has the right to be consulted. If the council is unanimous, it can override a rejection by the Parliament or an amendment put forward by the Parliament and adopted by the Commission as its own. By majority voting, the Council can reject an amendment which is not adopted by the Commission. That is welcome as far as it goes, but it goes far short of the co-decision of the Parliament and the Council in Community legislation for which some of us were hoping.
As we have heard, the report of the Select Committee of this House, which is most useful and for which we are most grateful, says:
"The powers of the United Kingdom Parliament will be weakened by the Single European Act.".
The noble Baroness, Lady Young, questioned that and, with respect, I also question it. If it had said that the powers of the United Kingdom Government will be slightly weakened, that might have been true. As we have seen the power of the United Kingdom Government to block measures in a restricted field will be less, although their power to have their own proposals adopted will be greater in that same restricted field.
In so far as the power of the European Parliament is increased in relation to Council decisions, the power of the Council and therefore of national governments is to that extent restricted. That process. I believe, is marginal in the Single European Act. If the Council is unanimous, it can reject or amend the Parliament's proposals.
The United Kingdom Parliament, as distinct from the United Kingdom Government, has no power over the Council of Ministers. It can in advance influence the stance taken by United Kingdom Ministers in the
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Council, and that will continue. The proceedings of the Council are in secret, but in so far as the United Kingdom Parliament is aware of what they say, it can hold United Kingdom Ministers responsible for their actions. That will continue.
The United Kingdom Parliament has no veto or restraint over what the Council does. It is absurd to suppose that the Council can be democratically controlled by 12 separate national parliaments. The case for more powers for the European Parliament rests on the fact that there is no democratic account-ability of the Council. That is why we on these Benches will continue to press for greater powers for the European Parliament. We support the Bill as a very modest, limited step forward. We look forward to further progress in the not too distant future, and we emphasise the great importance for our future of steady and successful progress towards effective and efficient European union.
1.25 p.m.
Baroness Llewelyn-Davies of Hastoe: My Lords, the House will be grateful to the noble Baroness, Lady Young, for setting out so clearly the provisions of this difficult and technical Bill. I am glad to join in the debate, in particular to draw attention to the 12th Report from the European Communities Select Committee on the Single European Act and Parliamentary Scrutiny. I shall move formally to take note of that report at the end of the debate.
That report and the 19th Report on the delegation of powers to the Commission were agreed by the Select Committee with this debate in mind. The report on the Single European Act has been much quoted, both in another place and widely in the newspapers. Some of those quotations were correct and some were distinctly incorrect.
I hope that it will help if I make clear what the report really says. It says two things. First, it recognises the need to make the Community work more efficiently. If the Community's decision-making process can be unblocked and its institutions made more efficient, that will increase the likelihood of Community law taking a form welcome to the United Kingdom. Secondly:
"the powers of the United Kingdom Parliament will be weakened by the Single European Act".
If noble Lords feel that those statements are contradictory, of course I would agree. That contradiction has been in existence since we joined the Community. It is for the House to decide whether the advantages of being in the Community, and making the Community work, are worth the price that has to be paid.
If we agree to give the Bill a Second Reading, we shall have decided to press ahead with the development of the Community, but we must do so with our eyes open. We cannot develop our membership of a multinational body without there being some impact on our national institutions and particularly on our national Parliament.
There are three reasons why the Select Committee believes that the United Kingdom Parliament's powers will be weakened. The first and most important lies in the extension of majority voting. This

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House exercises its influence over Community legislation through the voices and votes of United Kingdom Ministers in the Council. Any weakening of Ministers' power reduces the influence of the British Parliament. The expansion of majority voting may well increase the number of times that the United Kingdom Ministers are outvoted. At the meeting of Heads of Government last December, the Prime Minister agreed to that proposal, no doubt because the United Kingdom will be in the majority in the Community most of the time.
Here in Britain, we need the completion of the internal market because that should materially help the British economy, as the noble Baroness emphasised. However, we shall not always be in the majority. We must accept that British interests will sometimes be on the losing side.
Secondly, there is the Luxembourg Compromise, to which my noble friend Lord Bruce—in his own words, "mildly"—referred. The Government have said on a number of occasions, and the noble Baroness repeated it this afternoon, that the veto under the Luxembourg Compromise is still available where necessary. The Government have implied that in that respect nothing has changed.
In my view, it is not as simple as that, despite the persuasive arguments put forward by the noble Baroness. The veto still exists but I very much doubt whether it will be usable in any but the most extreme cases. It may not be dead but in our view it is moribund. After all, the agreement that led to the Single European Act could have been designed to by-pass the veto. The need for unanimity was at the heart of the Council's inability to take difficult decisions. The veto filtered down to the Council committees and the officials were able to block progress by using the threat of a ministerial veto later on.
The Single European Act sets out to create a new political momentum. Without it the Community will stagnate, as it has done in recent years. If the momentum develops United Kingdom Ministers will be under great pressure to accept any decisions that are backed by the qualified majority of the Twelve, whether they are palatable to us or not.
The Select Committee therefore considers that the veto has lost a lot of its effect. We state in our report:
"It must be open to question whether [the veto] would, or even could, be invoked in circumstances where the Commission, the majority of the European Parliament and a qualified majority of Member States were united against the United Kingdom."
The third factor affecting the power of this House is the co-operation procedure to which the noble Baroness referred. The procedure is extremely complicated and I shall not in a speech try to unravel its complexities. But noble Lords will find a full description of it in paragraphs 7 and 8 of our report.
There are basically two views about the co-operation procedure. The first is that it will make little difference. The European Parliament will seldom muster the absolute majority needed for action, and the new powers are so similar to those which they already had before that they can be disregarded. The second view takes a longer term approach. If one gives a body a chance to exercise power, sooner or later it
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will take that chance. The evolution of parliamentary democracy is full of small openings which have been exploited by skilful parliamentarians, not least in the history of our own Parliament. I believe that this view is closer to the truth. The European Parliament has a long way to go. In Parliamentary terms it is very young indeed. But this will change, and the co-operation procedure will help.
Noble Lords will understand that members of the European Parliament recognise the opportunity which is provided and, just as they exploited the notable iso-glucose judgment of the European Court to become more involved in Community legislation, so I expect they will try to take advantage of this new procedure. They now have a foot in the door of Community legislation, or at least those parts of it which are subject to the co-operation procedure.
This will affect us in two ways. It will circumscribe the power of Ministers by involving a parliamentary body over which they have no control and which, moreover, operates in public rather than behind closed doors as does the Council of Ministers. Any increase in the importance of the European Parliament, which is after all the Community's only democratically elected institution, will tend to shift the balance of parliamentary responsibility from the member states to Strasbourg.
The decision before the House is whether it is prepared to accept these limitations on its competence in the interests of making the Community work. Of course, the problem is not a new one. The erosion of some of the power of national parliaments was inevitable as a consequence of our joining the Community. We must now decide whether, as members of the Community, we are content to stand still or press ahead.
May I now turn to the question of Parliamentary scrutiny of European legislation. This is the primary reason for which the Select Committee was set up by the House and, as its chairman, I have a special responsibility for the workings of scrutiny. It has not been easy to forecast how the Single European Act will affect us. The committee is reasonably confident that our terms of reference and working methods are flexible enough to cope with any developments. But we propose some small but important procedural changes. These mainly relate to the co-operation procedure.
First, we make a request, made also by the scrutiny committee in another place, that when the Commission makes a proposal for legislation to the Council of Ministers the Government's explanatory memoranda to both scrutiny committees should identify Community proposals for legislation which are subject to the co-operation procedure. Secondly, any revised proposal under that procedure—known as a "re-examined proposal"—should be submitted to Parliament for scrutiny.
Our third request is that Her Majesty's Government should assume the responsibility for depositing in Parliament the text of any amendments proposed by the European Parliament under the co-operation procedure. This is connected with timing. Your Committee will not have very long to reconsider re-examined proposals and if we are to do our scrutiny

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job properly we must be ready to take account of any substantial changes introduced by the European Parliament. I do not expect substantial changes to occur at all often but we should not rule them out. We should prepare for such things in the future and be able to make our comments before the Commission has decided which proposals to recommend. Perhaps the noble Baroness will be able to give the Government's reactions to these proposals and also to our recommendation about the parliamentary reserve in paragraph 26 when she winds up the debate.
May I also draw your Lordships' attention to the Committee's statement in paragraph 27 that our opinions on proposals for European legislation should be sent to the European Parliament and the Commission on a regular basis? Although our duty is to this House and our influence is primarily through the House and Her Majesty's Government, we must recognise the peculiar nature of the Community's legislative machinery. As the focal point for decisions about legislation shifts slightly, we must make sure that our views are known in Brussels and Strasbourg as well as in Westminster. I think the House knows that members of the Commission and the European Parliament are often most complimentary about the reports of the House of Lords. I hope that regular contact may be useful.
Before I sit down I should like to turn briefly to the Select Committee's 19th Report on Delegation of Powers to the Commission about which the noble and learned Lord, Lord Templeman, will be speaking later. As my noble friend Lord Bruce pointed out, the Select Committee has produced this report at some speed so that the House could have our views in time for this debate.
Our recommendation on delegated legislation can be summed up in a single sentence. We are in favour of delegating powers to the Commission to implement Community legislation, subject to adequate safeguards. Here in Parliament delegated legislation is not always popular but it is necessary. Without it our work would be quite unmanageable. The Community has come to realise that it too needs delegated legislation and that the Council should delegate more to the Commission. The Single European Act makes new provision for delegation of powers to the Commission and detailed proposals for the methods of delegation have been submitted to the Council. I suggest that the Commission's proposals can be made to work, but as they stand now they pay too little regard to the interests of democratic control.
Some recommendations for amendment have already been put forward by the Committee. The 19th Report is an interim document. There will be further recommendations in the Autumn in a final report. I should like to urge Her Majesty's Government, when considering these proposals, to give more attention to the need for democratic control over the Commission's decisions than has been suggested so far.
We debate the relative merits of the negative and the affirmative procedures for delegated legislation many times in this House. What the Commission proposes, encouraged by the Heads of State, is a system of delegated legislation that involves little parliamentary
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control at all, neither of the negative nor the affirmative type.
The Select Committee believe that decisions affecting the whole population of the Community should not be handed over to an executive body, the commission, without some recourse to a body, whether the Council or a parliamentary institution, which derives its authority from the electorate. To sum up, I believe that the House can agree to the provisions of the Single European Act for delegation of powers, provided it is made clear that the terms under which powers will be delegated to the Commission are looked at with great care.
From my experience of the work of the Select Committee, I have no doubt that we shall be able to scrutinise and advise on any proposals arising under the co-operation procedure, provided that Her Majesty's Government respond favourably to our modest recommendations on scrutiny procedure.
As for the central question about whether the Single European Act should be implemented in our law, as the Bill before the House provides, the Select Committee have put the facts before the House: the Community needs to improve its ability to take decisions and the price is a further small loss of national sovereignty.
1.41 p.m.
Lord Templeman: My Lords, as your Lordships will be aware, under the Treaty of Rome the Council of Ministers is the primary legislative institution of the Community. It is the Council which makes Community law and not the European Parliament or the Commission. There is democratic control over the Council which consists of Ministers from the member states, each Minister being answerable to his elected Parliament.
The Commission is the primary executive institu-tion of the Community. The Commission carries out the decisions made by the Council and in a large respect the Council controls the Commission. The Commissioners themselves are appointed by member states. In view of some of the remarks made by the noble Lord, Lord Bruce of Donington, I think it only right to say that in the proceedings of the Select Committee the Commission has shown itself very ready to send over its officials to give evidence to the Select Committee. We have always found them very anxious to explain. We have always found the Commission very anxious to carry the member states with it rather than to bully them. As your Lordships will be aware, we have found it very ready to make amendments to its proposals which have been suggested in particular by the Select Committee, and it has always been grateful for, and has never resented any suggestions made by, the Select Committee.
I should not like it to be thought that the Commissioners and their staff are some wholly alien body whose interests are inimical to those of the United Kingdom. On the contrary, we must march together or we shall all perish.
It is common ground that the machinery for enacting and carrying out Community law requires to be more speedy, more effective and more efficient. In the 14th Report of the Select Committee in 1984–85.

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it was pointed out that there were then, in 1985, more than 300 proposals from the Commission to the Council for legislative action by the Council if the internal market was to be completed by 1992.
The plain fact of the matter is that the Council cannot cope with all the legislation which has to be put through. It is not a new problem. It can equally be said of the United Kingdom Parliament that it cannot cope with all the legislative measures which require to be carried through in this country. The remedy which we all dislike but with which we all live is delegated legislation. The United Kingdom lays down the principles and sets out as much as it can in primary legislation and then it delegates to Ministers the power, by statutory orders and instruments, to carry those principles into effect by more detailed enactments.
As I have said, it is a system which we all chafe under. We all stem from the old-fashioned principles of having a Parliament which met for three months of the year and laid down noble Acts with which nobody interfered, and they governed the country in that way and with income tax one shilling in the pound. Those days have gone. It is an inescapable fact of life that the United Kingdom must have delegated legislation, subject to safeguards, and that the European Community must live with delegated legislation, subject to safeguards.
Article 10 of the Single European Act amends Article 145 of the Treaty of Rome and authorises the Council to delegate powers to the Commission in the same way as the United Kingdom Parliament delegates powers to Ministers. The article makes it clear that the delegated powers are only to be operated by procedures laid down in advance by the Council acting unanimously on a proposal from the Commission. In other words, whenever the Council delegates to the Commission there will already have been established certain procedures which must be followed and which are in the interests of all member states. On each occasion the Council must make a delegation. The Council will say, "On this particular subject, these are the principles which we say shall be carried out", and it will order the Commission to carry them out by delegated legislation. In other words, the Council will lay down the principles and tell the Commission to get on with the details.
The Commission has put forward a draft regulation for the procedure which it recommends to be followed in the exercise of delegated powers. The 19th Report of the Select Committee on the European Communities, which was published on 15th July (No. 228) makes observations on that draft regulation. On behalf of the committee, I acknowledge the very kind remarks of the noble Lord, Lord Bruce of Donington, who said that the report would be useful to the House. We hope that it will be.
The proposals take the form of a draft regulation by the Commission. That draft regulation has to go before the Council of Ministers. Under Article 10, that regulation can only take effect if the Council is unanimously in favour of it after obtaining the opinion of the European Parliament. That is the answer to the question posed by the noble Lord, Lord Bruce of Donington, about how the safeguards are to be written in.
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The answer is that of course we do not know whether Her Majesty's Government will accept the need for the safeguards which we have recommended. However, let us suppose that they do—and we hope that they will—and let us suppose that they say that the draft regulation from the Commission should embody a provision for a right of appeal by a member state to the Council in certain circumstances. Her Majesty's Government can, by withholding the unanimous decision which is necessary in the Council to approve the regulation, prevent the regulation going through. We all know that that will not in fact take place, that the member states will agree and that there is no doubt that the Commission will agree reasonable safeguards. However, the answer is that Her Majesty's Government are in a position to insist on such safeguards as they consider necessary. The reason that the safeguards are not written into the Act is that that is not the right place to write them in. The safeguards must be written into the regulation.
We have heard in evidence that the Commission is perfectly willing to subscribe to proper safeguards. It must of course wait to hear the views of member states. So it sits there with its letter-box waiting for 12 member states to come rattling through with all kinds of different safeguards making all kinds of wild proposals. Those will then have to be sifted. We have no doubt, the Council of Ministers being a sensible body and the Commission being a sensible body, that they will eventually agree on proper safeguards which do not bind the Commission hand and foot but which will enable the rights of member states to be safeguarded. They will then be embodied in the final regulation. Therefore I suggest that there need be no fear that the safeguards have not yet been embodied in the proposal which is at present before your Lordships.
It is important at the outset to understand that in no case is the Council bound to delegate legislation. There will be many cases in which the Council says,
"This particular matter is so important that we will reserve to ourselves the full right to legislate upon it from beginning to end, and we will not delegate at all".
It is only when the Council makes its mind up that it can properly delegate by laying down principles and authorising the Commission to continue that it will then make a delegation.
Assuming that the Council makes a delegation, it will then be for the Council to decide which of three procedures should be adopted by the Commission in relation to it. It will not be for the Commission to decide; it will be for the Council to decide. What the Commission have suggested is this. There has been some minor delegation in the past, and every time there was minor delegation in the past the Council had to agree not only what ought to be done in principle but the method of procedure. And I think we were told that there were something like 16 different procedures with members of the Council—12 again as we now understand, and each having its pet method of procedure—each taking up about four days arguing which sort of procedure should be adopted, before rushing off to see that their representatives were returned in Bavaria, or Stoke Newington, or Newcastle-under-Lyme, or whatever other important matters were on their minds. The Commission said, "We really can't go on like this. If every time the

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Council wants to delegate powers it is going to spend a week trying to work out the machinery we shall never get anywhere".
Therefore, the Commission have suggested that the procedure should take three forms, which have been well tried in the past and seem perfectly reasonable. They say, "Whenever there is delegation from the Council, the Commission shall be bound to have a committee. The committee will consist of a represen-tative of each of the member states, appointed by the member states. It will be a watchdog committee which will see that we do not get up to all the sort of horrible things which the noble Lord, Lord Bruce of Donington, perhaps had in mind". There will be a watchdog committee, but it will have different powers, which will be selected again by the Council.
There are three forms of committee, as your Lordships will have seen from the report. First of all there will be an advisory committee. There are a large number of matters which have to be decided with great promptness and on which the Commission wish to have the views of the member states, but which are really executive rather than legislative. Where the Council decides that the Commission shall carry on with the advice of an advisory committee, then that will be constituted by members of the member states, and the Commission must consult that advisory committee but need not modify their proposals in accordance with the views of the committee, although I venture to suggest that a strong recommendation by that committee would obviously have great weight with the Commission. But there are some matters which are primarily executive which must be dealt with great speed and where, if necessary, the Commission will have to say, "Well, we have seen your views but we are afraid we think this is the way to do it".
The second—and I stress again that it is for the Council to say which sort of committee shall be appointed—is the management committee. There, if the management committee by a qualified vote disagree with the proposals, then the dispute must be referred to the Council. So that whenever the committee feel strongly about it and disagree with some aspects of the matter suggested by the Commission, then in effect they can appeal to the Council and the Council can decide.
Finally, there is a regulatory committee, which concerns matters where the proposals are legislative in character rather than executive, and there the Commission cannot carry their proposals into effect unless and until the committee agrees. It is envisaged that the advisory committee should deal with minor matters where speed is essential—for example, technical regulations with regard to health and safety, trade with third countries, and matters of that kind. Management committees have already been used in connection with the common agricultural policy, not on the broad principles as to how much and to whom, but on the details. There again decisions have to be taken speedily. Finally, as I have said, the regulatory committee will be used for sensitive matters which are more legislative in character.
The 19th Report of the Select Committee gives a general welcome to and approval of the proposals of
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the Commission and the limitations of these three different kinds of committee, and recommends certain safeguards. First, the committee suggests that there should be a review after, say, three years to see how things are working out. Secondly, we think it will be desirable for the Council gradually to evolve different principles as to which particular kind of delegated legislation will merit particular committees, so that the Council itself will not have to indulge in long argument about the three committees. They will say, "In this field, in this area, it is obviously right that there should be one sort of committee"; and they can parcel them out.
Thirdly, we have suggested that in the case of management and regulatory committees there should be a right of appeal by one single member state. That recommendation is made in order to quieten some of the fears expressed by the noble Lord, Lord Bruce of Donington. The committees vote by qualified majority, and one hopes that the minority will in nearly every case accept the decision of the majority. We must get out of this habit of always insisting on having our own way in everything, and we must persuade the other member states, or each of them, to adopt the same attitude.
However, there will be cases where an individual member state's representative, although he is in a minority in the committee, and although he is opposed by the Commission, feels so strongly about an issue, on instructions of course from his own government, that he thinks his own government, his own country, will be so prejudiced that he ought to appeal. In that case we have suggested that there will be a right of appeal by that member state to the Council.
In order to speed things up, we hope and expect that that right of appeal will be exercised in only rare circumstances, and that whenever a member state appeals it will be bound by convention to put out in writing the reasons why it thinks it is so important that this decision of the Commission should be overturned by the Council. We hope that that will dissuade member states from using too often the delaying power implicit in a right of appeal.
We also recommend that when there is an appeal there should be a strict timetable, so that when an appeal is made the Council shall be bound to consider it within a month or two, so that the Commission will not again be held up for months more while the appeal comes on.
Lastly, we have mentioned the question of scrutiny by Parliament. There is obviously a difficulty in laying before Parliament all the proposals of the Commission under delegated legislation because some of them will have to be dealt with quickly. I think they all will amount to some thousands, and what we have suggested is that when any proposal of the Commission is referred back to the Council that should be laid before the United Kingdom Parliament by Her Majesty's Government. That will occur either when a committee appeals to the Council from a decision of the Commission, or when under the safeguards that we have suggested an individual member state appeals back to the Council. We have also suggested that the proposals placed before the regulatory committee should be referred to Parliament.

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We had a long discussion—and I know that the noble Lord, Lord Broxbourne, who follows me will urge this—as to whether the proposals of the management committee should also be sent to Parliament as well as those of the regulatory committee. I have an open mind on this, but my present view is that it is impracticable. I am impressed by the hundreds of measures that would have to be brought before Parliament, and I think they would be swamped. However, this is a matter on which two minds can reach different conclusions, and the noble Lord will press the other point of view later on. It will ultimately be a matter for Her Majesty's Government to decide as to what particular form of safeguards they will need. Finally, we are still taking evidence on the question of whether, under the new procedure, there is going to be adequate consultation with the European Parliament and consultation with third parties.
On the general Motion before the House with relation to the Single European Act, there is no doubt that people who dislike the European Community will dislike the Single European Act, and will dislike the draft regulations proposed by the Commission with or without any of the safeguards that we have mentioned. Broadly speaking, their view will be dictated by the views which they held in 1970.
The noble Baroness, Lady Llewelyn-Davies, has drawn attention to the fact that in future it is hoped and expected that there will be more reliance on majority voting and less reliance on the ingenious veto invested by the Luxembourg Compromise, on the legal basis of which I propose to say as little as possible despite the invitation given to me by the noble Lord, Lord Bruce of Donington. The fact is that the Luxembourg Compromise still exists, the veto still exists as the noble Minister, Lady Young, pointed out, and what we hope and believe is that the exercise of the veto under the Luxembourg Compromise will become less and less important because we hope that the 12 member states, with the procedures which have been outlined by the Commission, will at the end of the day be able to agree on most and accept those occasions on which they are outvoted.
I agree that the desired effect of what we are now asked to do will be to reduce the operation of the veto and the threat, I hope, to use the veto so much in the future. For may part 1 should regard that as a wholly admirable development.
I wish to say very little about the European Parliament. I do not altogether share the fears of the noble Baroness, Lady Llewelyn-Davies. I cannot convince myself that the European Parliament— which so far has been more remarkable for the hysteria in the media than it has been for the evolution and publication of the very careful reports of its committees—will ever grow into a hydra-headed monster which will threaten the democracy at our roots. The European Parliament has a very important part to play but it is there to give advice and consultation. It seems to me that it is there to represent to the Council and to the Commission the views (and one hopes that it will unify the views) of Europeans as against the views of the members of each member
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state. Its object is to produce an entirely new team. At the moment we have 12 teams all with different shirts and all feeling compelled to stand up with their banners to shout for their own team.
The object of the European Parliament which has not yet been achieved (but I hope it will be achieved) is to produce a thirteenth view: the balanced view of the true European. We have not yet reached that stage, partly because of the views of some members of the European Parliament themselves and partly because of the natural, I was going to say, resentment of member state Parliaments. They look upon the European Parliament as a competitor. They look upon the European Parliament rather as Distillers looked upon the takeover bid by Guinness, or the other way round. But it is not a takeover bid. We shall suggest, we shall stand up against and we shall easily repel any effort by the European Parliament to take over any of the functions of the United Kingdom Parliament. At the moment I fail to take it seriously as a competitor though I think it has a great part to play.
Your Lordships will see that for my part I welcome the Bill which is before the House. I welcome the proposals of the Commission, subject to the safeguards I have mentioned. I hope that the safeguards will not be used to delay matters and I hope that what is now suggested will be seen as an attempt to improve the European Community and not as an attempt to downgrade the United Kingdom with all its democratic traditions to which the noble Lord quite rightly and movingly referred.
Baroness Llewelyn-Davies of Hastoe: My Lords, before the noble and learned Lord sits down, may I say that I have no fears of a hydra-headed monster appearing in the European Parliament. It is just that I think it will develop as all parliamentary bodies develop and we wish it luck.
Lord Templeman: I am obliged, my Lords.
2.5 p.m.
Lord Broxbourne: My Lords, the distinguished journalist Mr. T. E. Utley started his article on the Bill currently before your Lordships' House by posing a question: Does this Bill represent a substantial change which will weaken Parliament in its relations with the EEC, or is it the piece of trivial plumbing which the Government are determined that we shall think it to be? I should not presume to interpret the intentions of the Government. I am sure, generally speaking, that they are impeccable. But as between those two extremes postulated by Mr. Utley, I think the balance of the argument would be in favour of the former.
The Single European Act is undoubtedly an unusual animal, not only because of its name, but because of its form, its content and its complexity. It consists of a preamble, four titles, 34 articles, many amending articles in the Treaty of Rome and 20 so-called declarations—a form of provision not normal in our statute law. Then there is the further difficulty that the Act includes without express differentiation both those parts which add to and amend the Treaty of Rome and those which are without the treaty altogether, such as the proposals for foreign policy co-operation.

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Difficulties of interpretation may well lie ahead, and we shall have to deal with them when we encounter them.
I want to make a little analysis of the constitutional implications, but before doing so perhaps I may briefly catalogue the points in the Act which I welcome. I welcome the measures designed to establish by 1992 an internal market for the free movement of goods, persons, services and capital. These are basic to the workings of an economic community.
I accept that the combined effect of progress to the internal market and the enlargement to a 12-member Community imposes the requirement of some extension of majority voting. I welcome the additional Community competence proposed to be added by extending the provisions of Part IN of the Treaty of Rome in the context of the environment and other social rather than strictly economic matters. Such matters inevitably go beyond national frontiers and it is better in my view to make proper treaty provision for them than have constant efforts to deal with them by seeking authorisation under what I have called the "Open Sesame" provisions of Article 235 of the treaty, which leads to the exercise of powers not expressly authorised by the treaties.
The position in regard to environmental matters is safeguarded by restricting Community action to those objectives which can be better obtained at the Community level than by individual member states. There is also an express reservation to allow states to take more stringent protection, if required, on their own.
I welcome also the provisions in Title III for improved co-operation in the foreign policy context. This is not sought to be institutionalised, and in my view rightly so. What is sought is improved arrange-ments for consultation, co-ordination and implementation of joint action with appropriate staff and executive assistance. These are practical arrange-ments proposed within the existing machinery of sovereign states and will not require incorporation in the Treaty of Rome.
While I welcome these provisions, I share with the Select Committee of the other place their view that it would have been better if this part of the Act had been embodied in a separate treaty, thereby avoiding confusion with those parts which require amendment of the treaty.
I turn now to the constitutional aspect, to the institutional and procedureal changes in the workings of the Community, as proposed in Title II of the Act. They are complex but the drift, I think, is clear—a transfer of power from Council to Commission: that is, from legislature to executive; and thus a derogation from the supervisory power of national Parliaments. I say nothing at all in derogation of the Commission for whom I have considerable respect and regard, and I respectfully echo what the noble and learned Lord, Lord Templeman, so well said in that context a moment ago.
But I am concerned with the constitutional aspect, the relation of what is primarily an executive body with the legislature. Article 7 of the Act, by re-writing Article 149 of the Treaty of Rome, introduces a new co-operation procedure for Community legislation
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and decision making. As the noble Baroness has said, it is dealt with in paragraphs 7 and 8 of the report to the Select Committee of which she is the distinguished chairman and your Lordships may also find of assistance the flowchart in Appendix D of the House of Commons Select Committee Report.
But the essence of this, behind the complexities, is that the Commission make a proposal, the European Parliament expresses an opinion thereon and the Council, after considering the Commission's proposal and the Parliament's opinion, arrives by a qualified majority at what is called a common position. That might well be supposed to be the end of the matter: but far from it! Back it goes to the European Parliament who have a power to amend or reject. Then, back to the Commission to consider the Parliament's amendments, with a right of revision. And then, again, back to the Council. And then, after all these complex-ities, after all these comings and goings, we come to the heart of the matter—the very limited powers proposed for the Council, for the legislature. The Council may adopt the Commission's re-examined proposals: and that requires only a qualified majority. Or they may amend them; but that requires unanimity—very difficult to achieve in a Community of 12. This involves a substantial redistribution of powers and functions in favour of the executive (the Commission) and against the Council and, in so doing, inevitably involves a material reduction in the ability of national Parliaments and their Ministers to protect their countries' special interests.
The constitutional implications therefore are clear. The increase in Community competence and community law can only be at the expense of national institutions, and paragraph 17 of the Select Committee report makes clear the extent and effect of this in identifying five separate ways in which the powers of Ministers, and therefore of the Parliament to which they are responsible, will be circumscribed. The Select Committee came to the inescapable conclusion, already cited by the noble Lord, Lord Bruce of Donington, in paragraph 28 about the impairment of the powers of the British Parliament. That conclusion was specifically accepted and endorsed by the House of Commons Select Committee in their Third Report at paragraph 58.
Therefore we come to the question so succinctly put by the noble Lord, Lord Bruce of Donington: So what? How important is all this in the present circumstances? Of course we have to remember that the sovereignty of Parliament is not what it was in Dicey's day; it is not that simple and absolute concept on which some of us grew up. Article 189 of the Treaty of Rome changed all that by giving direct effect in this country to the legislation of the Community. We cannot change that. We are bound by the Treaty of Rome in law and in faith.
There were those who discerned the effect that adherence through the treaty to the Community would have on the sovereignty of Parliament and our constitutional position and, for that reason, would have preferred a less rigid association with our European friends and partners. But the decision taken in 1972 was irrevocable—irrevocable in law and in faith, as I have just said, and as I constantly sought to point out in the long debates in the other place on these

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matters in the 1960s and 1970s. So, that being the position, and we being under an obligation to see that the provisions of the treaty are respected and that Community competence is not given an authorised extension to the detriment of national sovereignty, I accepted (though I did not seek) membership of the old nominated European Parliament and became a Member of its Legal Committee. After two years that committee were good enough to make me their chairman, a position which I held for the ensuing four years.
I have therefore first-hand knowledge of the European Parliament, and I enjoyed, and continue to enjoy, the friendship of many of its members and officials, I agree that it should have a full and proper part in the workings of the Community. Nevertheless I think it would be unrealistic to rely on the European Parliament as a bulwark for the defence of national interests and institutions, including the residual sovereignty of Parliament, particularly as in its directly-elected form, which is constitutionally appropriate, its connection with the national Parliaments is so much weakened.
Indeed, that is evident from the overwhelming majority it accorded to the Spinelli Treaty, a frankly federalist document, going much further in the transfer of functions than the present Act. Again, I hasten to say that it is only the treaty which I criticise and not its author. I have great respect for Mr. Spinelli, who indeed sat under my undistinguished chairmanship in the Legal Committee of those days before he in later years became the distinguished chairman of the New Institutional Affairs Committee.
But I would ask your Lordships, and particularly those friends who continue to sit in the European Parliament, to accept that being a good European does not necessarily involve being federalist. There are other, more practical ways of promoting the wellbeing of the Community and of the nations which comprise it. I have mentioned some. I emphasise also the requirements of information and scrutiny, referred to by the noble Baroness and by the noble and learned Lord, Lord Templeman, which will enable our Parliament to assist our Ministers in the task of protecting the national interest and promoting practical measures.
I certainly have no time to dwell on these. They are well set out in the two reports which have been referred to: the 12th Report, and the recent 19th Report. All repay study and contain valuable suggestions, as indeed do the House of Commons Select Committee reports.
My noble and learned friend Lord Templeman has said that he and I are not entirely ad idem on the scope and extent of the proposed scrutiny and as to how far it should extend to the management committees. On the very rare occasions on which I differ from my noble and learned friend, I have a strong presumption that I am almost certainly wrong. But I think that we shall be able to go further into this important matter as time goes on. What I think is true is that it is only the extent and not the principle on which there is any difference. The principle we all regard as of the greatest importance.
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So I conclude by saying this. Given the information and the necessary powers of scrutiny, there is much that we here in Parliament can do to assist and improve the workings of the Community and its institutions, and to protect the constitutional heritage which we continue to prize in the altered circumstances of today. It is in this practical and positive way, rather than in pursuing theoretical and visionary concepts, that our labours will best be expended, and there is certainly much work to do.
2.21 p.m.
Baroness Ewart-Biggs: My Lords, coming after so many very expert and highly-informed speakers, my own short contribution will seem rather low key. However, I should like to say how very grateful I am to my noble friend Lady Llewelyn-Davies for outlining the House of Lords Select Committee's report, which did so much to clarify the consequences of the Bill before us. I am equally grateful to the noble and learned Lord, Lord Templeman, for also bringing out further points to help us understand the consequences of this Bill. I very much look forward to hearing the Minister's reply to my noble friend Lord Bruce who, quite rightly, brought out the all-important concerns of British sovereignty and how the safeguards would be written in.
I must confess that it is a long time since I have spoken in your Lordships' House on Community affairs, and it is an even longer time since, from the vantage point of our Brussels and Paris embassies, I was an observer to the negotiations for Britain's entry followed by her taking up membership in 1972. There can be little doubt that now, in this 14th year of our membership, much of the idealism which I remember inspired our thinking in those early days has been replaced by practical considerations as to the workings of the European Community.
It is for that reason that this Bill, with its objective of up-dating the treaties in unison with the other 11 members, is an important one to consider. Indeed, many might say that it really is high time to move the European Community into line with the changes which have occurred in all member countries during that time. Yet in spite of that, there is little doubt that critics of the Bill, both in Parliament and in the press and outside, have over the last months sought to use it as a vehicle for re-opening all those old arguments regarding Britain's membership, which were, after all, conclusively settled more than a decade ago. So the time has surely now come to look forward rather than backwards and to consider what real contribution the Single European Act will make to changing the Community in the ways which will benefit most the people of this country.
There is much that we should like to see the Single European Act do which we know it will not do. For example, it will not curb the excesses of the common agricultural policy and bring about the agricultural reforms which this House considers essential. It will not ensure that less of the Community's budget is spent on the creation, storage, disposal and even destruction of unwanted surpluses, and more on modernising the structure of our economies and the social adjustment which that entails. These are all important priorities.

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On the other hand, we must remember that the Single European Act does, at least, give the Community a basis for policies which are relevant to 90 per cent. of the Community's workforce who are not engaged in agriculture. My Lords, as I said, the -Minister and previous speakers have already described what the Single European Act does and I certainly should not want to go over that, but I should like to comment on one or two aspects of the changes outlined. First, there are the new provisions on technology, the environment and social affairs. These really seem to fill genuine gaps in the existing treaties. With the competition we are now facing, not only from the United States and Japan but also from some of the newly industrialised countries, co-operation in Europe must be the only way to ensure our long-term survival. Indeed, I should not like to see a de-industrialised Britain which had to depend on tourism and the City of London to pay for its imports when North Sea oil runs out.
In the environment too, my Lords, there is another gap in the existing treaties. The Community needs to do more in actually tackling Europe's environmental problems. Many of these problems, of course, are purely local and need local solutions, but some of them transcend national boundaries and require Community action. The new provisions set out what seem to be sensible and well balanced criteria. There are also social provisions, and it cannot, frankly, be said that they go very far beyond what the Community already does in practice. Protecting the health and safety of workers and encouraging dialogue between management and labour are objectives which ought to have been written into the community treaties from the start. Therefore, I think we should welcome any new provisions, however limited in their scope, which might help make the Community more aware of the social dimensions of its policies.
There was a great deal of discussion in the debate in the other place about the role of the European Parliament, but, for my part, I am astonished how on the one hand we so often criticise that Parliament for its failings, whilst at the same time we resist any changes which might enable it to be more effective. It is like urging a horse to gallop whilst hobbling it at the same time. Moreover, I must confess to feeling a certain respect for the European Parliament's record on equal rights, on environmental issues and on other social and employment issues. I am glad the noble Baroness, Lady Elles, has returned to her seat to hear me say that. I feel that the European Parliament has instigated some progressive reforms, such as parental and family leave, to name but one, which have helped workers very much in the EEC. For my part, I very much welcome the provision in the Single European Act which will strengthen the Parliament in relation to the Council of Ministers.
Lastly, my Lords, so far as political co-operation goes, there is no doubt that Governments of both parties have rightly regarded participation in political co-operation. This, after all, goes hand in hand with our membership of the Community and is one of the most valuable features of our wider commitment to Europe. I strongly believe that many of our national goals can be achieved only in co-operation with others. I will give two examples. We talk about controlling
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multinational companies, but how can one country on its own control the strength of multinationals? Indeed, the Council of Ministers a few years ago, missed a very good opportunity to exercise control when they voted against the proposal of the Parliament which would have allowed workers in multinational companies to have much more information about the way their companies operated. My second example is the importance of co-operation regarding the methods of dealing with terrorism. There can be little doubt that the very nature of modern international terrorism demands an effective international response. Although advances have been made, I believe European framework could be used much more by member states to devise ways of making the horrendous task of a terrrorist more difficult.
My Lords, may I end by saying that I have long believed and still believe that this country's national interests are best served from within the European Community. Cruelly though it has disappointed in so many hopes placed in it, nonetheless the European Community is better than any alternative organisation which could conceivably be brought into existence to replace it. I believe that that view also represents the attitude of the British people. In spite of its failings, we have grown accustomed to the European Community. We grumble about it much as we grumble about the weather; but in the same way as we should like to see the weather improved, we should also like to see the workings of the Community improved. In my understanding (and I see it in a very modest way) that is what the Bill is trying to do.

Southern Africa: Foreign Secretary's Visit
2.30 p.m.
Baroness Young: My Lords, with the leave of the House, I shall now make a Statement about the recent visit to southern Africa of my right honourable and learned friend the Foreign Secretary.
In accordance with the mandate entrusted to him by the 12 European Community countries at The Hague on 27th June 1986, the Foreign Secretary made a second visit to southern Africa from 22nd to 29th July. He undertook a busy programme of 20 separate meetings in five days in South Africa as well as spending three days visiting other countries in the region. In South Africa he had meetings at the beginning and end of his mission with State President Botha and with the South African Foreign Minister. He also met four other members of the South African Cabinet. Outside the Government he met, among others, opposition and Government MPs, and black and white business leaders. He also had meetings with two leaders of homelands, Chief Buthelezi and Mr. Enos Mabuza. My right honourable and learned friend had hoped to see Mr. Nelson Mandela as well as representatives of radical black organisations but regrettably this did not prove possible.
While in the region, my right honourable and learned friend also had meetings with President Kaunda of Zambia, President Masire of Botswana, Prime Minister Bhekimbi of Swaziland and with King Moeshoeshoe and General Lekhanya of Lesotho. The discussions which he had with these leaders provided

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a valuable opportunity to explain the Twelve's policy and to seek their views on the South African problem. They also brought out the serious concern felt by most of South Africa's neighbours about the potential consequences for their countries of a policy of general economic sanctions against South Africa and the dangers of escalating confrontation in the region.
In his discussions with the South African Government, the Foreign Secretary made clear the view of the 12 members of the European Community that there was an urgent need for fundamental but peaceful change in South Africa, leading to the total abolition of apartheid. In this connection, he stressed that in order to establish the necessary conditions for peaceful dialogue it was essential to release Nelson Mandela and other political leaders and to unban the ANC and other political parties. My right honourable and learned friend was able in this way to convey to the South African Government the deep concern felt by the United Kingdom, the European Community and western countries generally on this matter. The South African Government can be in no doubt of the strength of this concern.
My right honourable and learned friend regrets that the responses he received from the South African Government were not such as to enable him to report progress of the kind which he sought. He is conveying the outcome to our Community partners and will also be able to give his assessment of the visit to the review meeting of the seven Commonwealth Heads of Government which begins in London on 3rd August. The Government will continue to make every effort to work for a negotiated solution to the problem of South Africa.
Lord Elwyn-Jones: My Lords, the House will be grateful to the noble Baroness, Lady Young, for the Statement that she has made about the Foreign Secretary's visit to southern Africa. I am bound to say, however, that the Statement is deeply disappointing and says nothing whatsoever by way of positive proposals as to how to deal with the present critical situation affecting this country, our relations with the Commonwealth, our relations with the United States and with the world at large.
While the Foreign Secretary's chances of success on his mission to Pretoria were slim, all sides of the House wished him well. In the course of the impossible task placed upon the Foreign Secretary by the Government, his personal standing was, if I may say so, not diminished by his experiences and by his reactions to them.
I accept that the noble Baroness and the Government are opposed to apartheid. My personal abhorrence of apartheid was implanted for ever in my mind when, on behalf of the International Commission of Jurists, I attended in 1961 the inquiry at Vereeniging into the massacre by South African police of 67 Africans in Sharpeville, demonstrating peacefully against the pass laws.
Has not the situation now become a critical one in the light of the total collapse of the Foreign Secretary's mission to South Africa? Are there not now urgent questions that, frankly, many of us were hoping and expecting the Government to make reference to, and
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to provide answers to, in the course of today's Statement? First, there has been serious delay in dealing with the problems—already six weeks have elapsed since the Commonwealth group of eminent persons reported—and yet there is no indication of urgency in the Statement. What I now ask is this. What specific proposals will Her Majesty's Government be putting to the mini-Commonwealth summit next Sunday if that conference is not to end in disarray? Should not the Government be making a public commitment now to proceeding with effective measures by way of comprehensive sactions without delay?
Secondly, is the noble Baroness aware of the comment in the Foreign Affairs Committee report that:
"The danger of the disintegration of the Commonwealth as a result of differences of policy towards southern Africa is not to be dismissed lightly"?
What steps are the Government taking to convince our Commonwealth partners, who want action, that the British Government are committed to speedy elimination of apartheid? Will efforts be made to direct the EC under the period of British presidency towards implementing rigorous measures against the South African Government if they persist in their actions and refuse to meet the gravity of the situation?
Finally, should not the Government now join our friends and allies in the Commonwealth and in the EC—and now, as seems possible, in the United States—in proposing mandatory sanctions against South Africa in the Security Council?
Baroness Seear: My Lords, we on these Benches also wish to thank the noble Baroness for making the Statement in your Lordships' House this afternoon, and we, too, wish to express our understanding of the extremely difficult task undertaken by the Foreign Secretary; undertaken with great courage and determination, if, alas! with total lack of success.
Having said that, I am bound to observe that the Statement appears to be totally inadequate in the face of the position in South Africa, and also in the light of the anger and anxiety that is developing in this country at what is going on in South Africa; at the increasing bloodshed, and at the arrogant rejection by the South African leaders of any attempt to meet our Foreign Secretary and to discuss with him, in a way that would lead to any hope of understanding, the deep problems that confront South Africa and all of us because of our connections with South Africa.
There is anger and anxiety because time is running out. For months we have heard a great deal, and have known for years, that the issue of apartheid has been getting worse and worse. We had the meeting in Nassau. We had the Eminent Persons Group. The result, so far, is nothing. Time is not on our side. It is not on the side of South Africa. It is not on the side of the moderate leaders of the blacks, without whose leadership there is no hope for anything other than a bloodbath in South Africa. If those men are swept aside, what hope is there for decades to come of either the economic or political development of South Africa which we wish to see?
In the light of this one can only say that the Statement is a totally inadequate response. I should

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like to ask the noble Baroness one or two questions in connection with it. In the first place, we are told that the border states expressed concern about the potential consequences of general economic sanctions, but I suspect that they expressed a great deal more than that. Can we be told more about what Kenneth Kaunda said to the Foreign Secretary? What was his attitude? What did he hope would come from the mission, if anything, and what did he feel we ought to be doing? Surely more was said than a mere expression of concern about the effect of sanctions.
What is the Foreign Secretary going to say to the EC countries in his position as President of the EC. What sort of a lead is he going to give? In the last sentence of the Statement the Government refer to continuing to work for a negotiated solution to the problems of South Africa. Why do the Government think that continuing to work for a negotiated solution, which up to now has led to nothing, will lead to any success in the future; unless the Foreign Secretary is seen to be negotiating from a basis of strength, with a determination to take positive measures and see that something is done? Why should the South African Government take any more notice in the future than they have in the past if Sir Geoffrey continues to negotiate from the position of weakness which he takes up at the present time?
Her Majesty's Government were party to the Nassau Agreement. It was laid down clearly then what was to be expected: the release of Mandela and the unbanning of the ANC. Six months were given for that to take place. The Eminent Persons Group went with a commission to bring about achievement along the lines laid down at Nassau. They said that they failed. Do we just stand back with that failure and do nothing? As the noble and learned Lord, Lord Elwyn-Jones asked: what are the Government going to say to the seven members of the Commonwealth? They have shown their anger in a mild way—though not mild to many people—in their reaction to the Commonwealth Games. What will they say in reacting to what Sir Geoffrey will apparently by saying to them in the light of today's Statement?
Finally, I ask the noble Baroness to tell the House that if, during the Recess, any member of the Commonwealth decides to leave the Commonwealth, Parliament will be recalled to discuss this before the Commonwealth breaks up.
2.45 p.m.
Baroness Young: My Lords, I am grateful that both the noble and learned Lord, Lord Elwyn-Jones, and the noble Baroness, Lady Seear, reiterated what has been said from both the Labour and Liberal Benches, that they wished my right honourable and learned friend well in his mission to South Africa. They reiterated what I think is believed by all British people—that is, that in no way has his personal standing been diminished by any of his experiences. Indeed, he has bravely stood out and stood up for what we all believe—the point that has been made: that we all want to seek a change in apartheid and we want to see that change brought about peacefully. The question is how we are to achieve that.
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I have been asked a number of questions both by the noble and learned Lord, Lord Elwyn-Jones, and by the noble Baroness, Lady Seear, and as in a sense both sets of questions overlap. I shall answer them together. I think the first one concerns a general feeling that the Government had no positive or new proposals on how to deal with the present situation. Let me put it to your Lordships this particular way. The position that we are in remains as my right honourable and learned friend has already made clear. In the Commonwealth meeting which will take place on 3rd August, consideration of the case for further measures is an item on the agenda, and so too is it in the European Community connection on a different timescale. It would really not be right on this occasion for me to anticipate what will come out of that meeting.
Perhaps I may say to your Lordships that we are already implementing a whole range of measures with our European Community partners and our Commonwealth partners. I shall not list them all today, though I have done so on previous occasions, but of course they include the United Nations arms embargo, the Gleneagles agreement, the Luxembourg package and Nassau accord. May I say to your Lordships that there is no automaticity that something further will happen, but I repeat that my right honourable and learned friend has said in another place that if his mission did not procure tangible and substantial progress, then agreement on further measures was likely to be necessary. This is an objective statement of reality; it is not a threat.
I was secondly asked about the report of the Foreign Affairs Committee regarding the dangers of the disintegration of the Commonwealth. The noble and learned Lord will be well aware of the convention of the Government not commenting on a committee report at this stage, so I can only say to him that of course we acknowledge the importance of the Commonwealth. I should like to say to the noble Baroness, Lady Seear, with regard to the last point that she raised, that whether or not any country might leave the Commonwealth is a totally hypothetical situation, and I think it would be most unwise to comment in any way on this suggestion.
As for the recall of Parliament, that would be a matter not for myself but for consideration in the usual way in which these matters are conducted in both Houses of Parliament. However, in the present context I think it is very important to stick to the facts, and, following upon the Cabinet meeting this morning, I should like to add that the Cabinet thanked my right honourable and learned friend for the dignified and persuasive way in which he carried out his mission. The Cabinet was deeply dismayed by President Botha's discourtesy to my right honourable and learned friend; and it was unanimous in its support for the policy that both my right honourable friend the Prime Minister and my right honourable and learned friend the Foreign Secretary have pursued, which is to try by negotiation to achieve an end to apartheid.
Viscount Massereene and Ferrard: My Lords, eleven days ago I was priviledged to meet representatives of the Zulu nation, which is a nation of 6 million people. To a man, they were against sanctions. I also was upset about the discourtesy shown to our Foreign

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Secretary by President Botha, but I should like to point out that in the past three years he has pretty well dismantled apartheid apart from the Group Areas Act.
Noble Lords: No, no!
Viscount Massereene and Ferrard: Yes, my Lords, he has—apart from having one man, one vote, which of course, as a great number of educated Africans will tell you, would create complete chaos. Change has to come slowly. He has dismantled everything apart from the Group Areas Act. If your Lordships do not know what the Group Areas Act is, I will tell you. It does not actually allow black Africans to live in the better suburbs and housing districts which are limited to whites. However, the South African government are rather winking an eye at that. I happen to know that it is actually happening. The only other matter is, as I say, the question of one man one vote, which will take time and which will have to be done through persuasion and not by the stick. I should also like to point out that the South African government have on several occasions offered Mr. Mandela his freedom if he would renounce violence. They have done the same in relation to the African National Union, but they will not renounce violence. With the greatest respect—
Noble Lords: Order! Order!
Lord Nugent of Guildford: My Lords, is my noble friend aware that it is entirely wrong to continue with a statement? He should bring his remarks to a close with a question.
Baroness Young: My Lords, my noble friend, Lord Massereene and Ferrard, asked three questions. My right honourable and learned friend did in fact meet Chief Buthelezi and is well aware of the views which he has expressed on behalf of the Zulu people. We are also well aware that the South African Government has taken steps partially to dismantle apartheid. We have welcomed those steps. What we have always said is that they have not gone far enough or fast enough. Concerning the point of the offer of freedom for Nelson Mandela in return for the renunciation of violence, I think it is important to note that what my right honourable and learned friend said (and it is the view of the Government) is that we want not only the release of Nelson Mandela but also the release of other political prisoners and the unbanning of the ANC.
Lord Hatch of Lusby: My Lords, only a few hours ago I was asking the noble Lady in a two-hour debate a question concerning what the Government's response was to the report of the Eminent Persons Group. She did not answer the House last night and she did not answer the House in the Statement this afternoon. She did quote the Nassau Agreement of last October, which stated that if the Eminent Persons Group did not find any movement towards what the whole Commonwealth was looking for in South Africa, then there would be a mini-summit meeting to consider further measures. Are we not entitled to know what the policy of Her Majesty's Government is when the Eminent Persons report has made it clear that the Africans of South Africa are willing to
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negotiate with the Government, but the South African government is not willing to negotiate, which has been confirmed by the visit of the Foreign Secretary? Are we not entitled to know now what the policy of Her Majesty's Government is in relation to what has been made plain by every other member of the Commonwealth as they enter this crucial summit meeting this weekend?
Baroness Young: My Lords, I am completely dismayed by what the noble Lord, Lord Hatch of Lusby, has said. We had a debate last night lasting nearly two hours, at the end of which I set out the Government's statement. I went out of my way to answer the specific points he raised and I have no intention of repeating this afternoon what I said last night. I can only say that so far as what the noble Lord has described as the mini-summit (by which I take it he means the meeting of seven Commonwealth countries), I have already answered that question in what I have said to the noble and learned Lord, Lord Elwyn-Jones.
Lord Soames: My Lords, will my noble friend tell the House that the Government have been discussing for many weeks with the other main trading partners of South Africa what action they should all agree to take if the highly regrettable state of affairs comes about whereby the Government of Pretoria refuse to take further steps to dismantle apartheid of their own volition?
Baroness Young: My Lords, my noble friend is absolutely correct. Discussions have been going on with our Community partners, and we had discussions with our Commonwealth partners stemming from the Nassau meeting of the Commonwealth Heads of Government. As I said, we are already implementing a whole range of measures with our Community and Commonwealth partners. As I have also indicated, my right honourable and learned friend made clear on 17th July in another place his view on other measures.
Lord Brockway: My Lords, what has happened is a deep humiliation both to the Foreign Secretary and to the Prime Minister. They were persuaded that apartheid could be ended by reasonable discussion. The Foreign Secretary travelled half-way round the world to discuss this matter with President Botha of South Africa. He was given a colossal snub. The South African Head of Government even refused to consider the proposals that he was going to make. Both the Foreign Secretary and the Prime Minister must feel utterly humiliated by what has occurred.
What I do not understand is this. Why did not the British Embassy in South Africa, and indeed the embassies of the other EC countries, obtain the knowledge and give the information to the British Government which would have prevented that disaster? Apparently it was only two days before he met the Head of State of South Africa, when the Foreign Secretary was in Botswana, that he understood the rejection which was likely to take place.
I welcome the reported proposal of the Indian Government that in September there should be a

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meeting of all the Commonwealth countries to consider what should be done. I suggest that that meeting should be broader than just a meeting of the Commonwealth countries. The governments of the EC are involved; the world is involved. I should like to see the Security Council of the United Nations initiating a world conference to consider what action can be taken. A meeting of the Commonwealth nations might well precede it.
Lord Soames: Enough is enough, my Lords!
Lord Brockway: My Lords, I wish to sound a warning against the possibility of limited sanctions. They would fail. All history shows the ability of governments, when foreign action is taken, to adjust themselves to it. Apartheid is not just a matter of rules, regulations and adminstration; it is, as my noble friend Lord Hatch of Lusby pointed out in his remarkable speech during the South African debate, a way of life for the Afrikaners who rule the South African Government. Only a fundamental change of power will end that. I have no doubt that in the long run apartheid will be abolished, but I am fearful and pessimistic about the means of that realisation.
Noble Lords: Question!
Lord Brockway: My Lords, there will be a blood bath in South Africa and a war in the world. I conclude by urging intervention by United Nations forces if apartheid is ultimately to be overthrown.
3 p.m.
Baroness Young: My Lords, I do not accept what the noble Lord, Lord Brockway, said: that either my right honourable friend the Prime Minister or my right honourable and learned friend the Foreign Secretary have been humiliated by that visit. I am bound to say that I have listened in this House on many occasions to the noble Lord putting, if I may say so, eloquently the case for negotiation and talks with people. I am surprised that he should feel that making a further effort to negotiate with the people who are in a position to implement change in apartheid is humiliating or not worth while. We do not see it in those terms.
I was interested to hear what he said about sanctions because I think that he has indicated that sanctions are not easy to apply, or the easy policy which is sometimes implied, which will bring about the changes that we should all like to see. I should not like to comment on the Indian Government's proposals as I have not seen anything of that nature.
Lord Paget of Northampton: My Lords, I shall confine myself to questions but I have several questions to ask. First, has not the Foreign Office been a little naive? Has it not taken it a very long time to find out that neither the Jews nor the Boers can be talked out of their promised lands? Both are people of faith: both are good fighters. Should the Foreign Office also not consider that they both have the bomb? Have we costed sanctions? There are certainly more than a million migrant workers in South Africa. When sanctions are put on they will not be needed and they
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will become a menace. Within days, they will be trucked out of the country. Who will feed them? Where will they go? Has UNRWA prepared refugee camps to receive them, because they will need them?
On the question of trade, all South Africa's neighbours have her as their largest trading partner. They do not just trade with South Africa; there is the question of transport. The remittances will be cut on which their budgets so largely depend to pay for their imports. What are we going to do to meet their problems? The heroic black leaders scorn these materialistic considerations. They say, "We will take the suffering". It is not the leaders who will starve. Mr. Nelson Mandela will still get his ration; millions will not. African leaders have always had the tendency to take heroic policies and the lives of the ruled have always been expendable. I do not think that there is—in fact I am sure that there is not—a single black ruled country in Africa in which the ordinary citizen's prospect of dying from natural causes has not considerably receded since colonial days.
Noble Lords: Speech!
Lord Paget of Northampton: My Lords, as the noble Baroness is aware, they have suffered from drought. But what rulers of Africa have not suffered from drought? Droughts are endemic in the African climate. The differing factor has been black governments and millions have died as a result throughout Africa—
Noble Lords: Order!
Lord Paget of Northampton: My Lords, is it not odd that we should be conspiring to wreck the only economy in Africa that works? I think we could be better occupied. Again, do we need the burden of feeding the millions on South Africa's borders? If we do not, nobody will. What is the cost of this?
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, one thing that is clear about a Statement is that we must not turn it into a debate. I wonder whether the noble Lord would think it right to draw his remarks to a conclusion.
Lord Paget of Northampton: My Lords, can I put my final question? Who will pay for the victims of this? We start off with Namibia. Who will pay for Namibia? South Africa has been paying some 500 million a year. Who will take that on? That is only a trifle compared with the needs of all her other neighbours who are going to be starving. Are we really to go in for this performance—
Noble Lords: Order!
Lord Paget of Northampton: My Lords, I end with this. Our Prime Minister has behaved with the utmost courage. I hope that her courage does not leave her, because if it does millions will die.
Baroness Young: My Lords, the noble Lord. Lord Paget, has asked a number of questions and made a number of points. But I shall try to confine my answers to those which are relevant to the Statement.

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The noble Lord mentioned a whole range of measures which might be taken and asked whether, in what we have done, we had considered their effects. We have consistently argued against general economic sanctions. Experience has shown that they do not work, and any further measures in addition to those that the United Kingdom has implemented over the years have to be considered in the light of that experience. We believe that, against the supposed benefits, all should weigh carefully the effects of general economic sanctions in South Africa on South Africa's neighbours and on the United Kingdom. We believe that the balance is against such sanctions.
On the effects of sanctions on the front-line states, we are examining the possibility for further assistance in the context of the Southern African Development Co-ordination Conference, but clearly the United Kingdom is not in a position to offset the effects of economic sanctions on the front-line states. The importance of that is that it underlines the importance of seeking a solution through dialogue and not through confrontation.
I should like to conclude by saying that the mandate which my right honourable and learned friend was given at the Hague meeting has still nearly two months to run. There is no need for instant decisions.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that the calm good sense of her original Statement does not, to many of us, seem to merit the highly critical comments which it received from the noble and learned Lord, Lord Elwyn-Jones, and the noble Baroness, Lady Seear? Is she also aware that it seems to many of us thoroughly sensible not to indicate in advance of the meeting with the Commonwealth Heads of Government at the weekend and in advance of discussions with them, exactly how Her Majesty's Government are contemplating proceeding? Is not the purpose to have a discussion with them and to see whether a meeting of minds can be achieved among those who are very largely concerned?
Is my noble friend also aware of the fact that the apparent wish of a number of noble Lords opposite to rush into measures which, whatever else they may do, would inflict untold misery and suffering on a large number of innocent people, shocks some of us?
Baroness Young: My Lords, I should like to thank my noble friend Lord Boyd-Carpenter for his very helpful and positive support for the Statement that I have made and for his support for the policy and the line that is being pursued by the Government.
Lord Molloy: My Lords, is the noble Baroness aware that those of us who wished our Foreign Secretary all good fortune and godspeed in his difficult task, acknowledging that he was speaking not for this country but for the European Community as well, consider that his summary dismissal by Botha was indicative of what that country thinks of the opinion of the rest of Europe? Will not the noble Baroness also agree that most political parties in Western Europe and in the United Kingdom as well as the United States Congress approved of the Report of the Eminent Persons Group and that they were sabotaged
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and prevented from implementing their recommendations by the stubborness of the President of the United States of America and the British Prime Minister? Therefore, would not the noble Baroness agree that the Commonwealth conference can provide, if we take the right initiative, a vital wind of change which will not only be able to unite this nation, the European Community and the United States, but will find approval in the rest of the civilised world? I am referring to the fact that in our unity we condemn apartheid with our words and we have the courage and the fortitude to make our words a reality in some form of unified action which will speak even louder than the words of the most courageous person.
Baroness Young: My Lords, in answer to the noble Lord, Lord Molloy, I point out that my right honourable and learned friend during his visit to Southern Africa had the opportunity to put very frankly our view about the situation in South Africa to State President Botha and to other members of the South African Government, and in the same way he has had the opportunity to put very freely and frankly our position to President Kaunda. We have made clear on many occasions that we condemn apartheid. I would only add so far as concerns the United States and its attitude to the mission of my right honourable and learned friend, that it has been very supportive, and my right honourable and learned friend will be seeing Dr. Crocker later this afternoon. The Hague Summit decision provided for consultation with other industrialised countries.
Lord Alport: My Lords, I should like to ask my noble friend, or rather I should like to ask the Leader of the House whether he does not consider that most of the interventions that have taken place since this Statement was made, apart from those from the Front Bench, have been a gross abuse of the procedure of the House; contrary to the traditions of the House and unfair on a Minister who is here not to have a debate but to answer questions? In those circumstances, the proceedings of the past half hour or so have not been of any advantage to the reputation of this House.
Baroness Young: My Lords, I would say to the noble Lord, Lord Alport, that it is a matter of concern that some of the questions have been way outside the terms of the Statement. The convention of the House is that on a Statement noble Lords should put questions, with the exception of the Front Bench speakers. I shall of course draw to the notice of my noble friend the Leader of the House the remarks of the noble Lord, Lord Alport.
Lord Ponsonby of Shulbrede: My Lords, the standing order refers to Statements as being the opportunity for "brief comments and questions", so noble Lords may make brief comments as well as ask questions.
The Earl of Onslow: My Lords, is my noble friend aware that in the hotels of Johannesburg and Pretoria there are now waiting salesmen from Japan, Taiwan, and South Korea, and agents of the state trading companies in Eastern Europe, all of whom are hoping that we shall be stupid enough to impose sanctions?

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Furthermore, is my noble friend aware that large numbers of people in this country are fed up to the back teeth with being lectured by people who come from governments whose legitimacy and rectitude leave much to be desired?
Thirdly, and lastly, is it not unhealthy that we are so obsessed by South Africa that we take no notice of other tyrannies in this world? Was that obsession not totally encapsulated by the noble Baroness, Lady Seear, who gave the impression of being one of Lord Milner's children, and that she wanted to govern and boss about South Africa? South Africa is not a nice state, but we should not be quite so obsessed with one tyranny in the world when there are hundreds of others.
Baroness Young: My Lords, I note of course what my noble friend Lord Onslow has said. One of the difficulties about sanctions is that to be effective they require the complete co-operation of all countries. He is right to draw this point to our attention.
Following on what the noble Lord, Lord Ponsonby, has said—and I appreciate that I had not the advantage he had of having the Companion to the Standing Orders in front of me—in fact we have now spent just over three-quarters of an hour on this Statement while we are in the middle of a debate on an important Bill. We had a debate on South Africa last night—the third such debate since April—and it might be the wish of your Lordships that we should return to the debate on the European Community.
Lord Monson: My Lords, I shall be brief. Would the noble Baroness agree that ,all those African Commonwealth countries which are trying to force or panic this country into precipitate action, by boycotting the Commonwealth Games and so on, themselves engage in trade with South Africa, whether openly or surreptitiously?
Baroness Young: My Lords, we very much regret what has happened regarding the Commonwealth Games. The important thing to remember is that they are Commonwealth Games, although they happen to be taking place in Edinburgh.
Lord Mishcon: My Lords, I promise questions, comments and brevity. May I first be allowed to dissociate these Benches from the remarks of the noble Lord, Lord Paget. Secondly, may I ask the noble Baroness whether it is not a pity that the one House of Parliament sitting at this critical time is dealing with a Statement out of which only words have come while no policy statement at all has issued from Her Majesty's Government? If one takes it for granted, as we do from all sides of this House, that it was right and proper, with his customary dignity, for the Foreign Secretary to try to use the force of reason with the Government of South Africa, is it not clear that that voice of reason was treated with impertinence? If that is so, what are we going to do now that reason has been shown not to prevail?
Baroness Young: My Lords, the noble Lord, Lord Mishcon, puts in rather a different form the question
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that was put by his noble and learned friend Lord Elwyn-Jones. My answer remains to him, as it was in the beginning to the noble and learned Lord, that my right honourable and learned friend has made clear that at the Commonwealth meeting next week consideration of the case for further measures is an item on the agenda. So is it too in the European Community context, but on a different timescale. It would not be right for me to anticipate that discussion
Lord Ferrier: My Lords, will the noble Baroness—
Lord Tordoff: My Lords, may I say—
Noble Lords: Order!
Lord Belstead: My Lords, I do not think we can have two or more than two noble Lords on their feet at the same time. I wonder whether I might ask your Lordships if it is the feeling of the House, despite the fact that this is a matter of considerable concern, that after 50 minutes we ought now to move on to other business?
Lord Tordoff: My Lords, I rose to my feet to say just that to the noble Lord. From these Benches we support him completely.

European Communities (Amendment) Bill
Debate on Second Reading resumed.
3.22 p.m.
Lord Nugent of Guildford: My Lords, after that very important intervention, we return to the slightly calmer waters of the debate on the European Communities (Amendment) Bill. May I preface my remarks by saying, as the majority of your Lordships troop out, that a number of noble Lords here are still waiting to speak. We are not yet halfway through the list of speakers at this relatively late hour this afternoon and I propose to make my remarks very brief. Indeed we have already heard a detailed and expert exposition of what is entailed in the Single European Act, including an admirable précis from Lord Templeman of the report of the Select Committee which he chaired so ably.
The broad effect of what we have before us is to speed up decision making and to facilitate progress towards European economic unity. In particular the existing structure provides not 16, as the noble and learned Lord, Lord Templeman, said, but some 30 different procedures for dealing with measures. It is to be reduced by this action in the exercise of delegated powers by the Commission to three procedures. This is a drastic reduction and all it will mean is that objections to Commission proposals by individual member countries—that includes us—will not be allowed to hold up indefinitely the enactment of measures which member countries regard generally as beneficial to the Community. In other words this will mean qualified majority decisions.

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Anxieties have been expressed by the noble Lord, Lord Bruce of Donington, in a most cogent speech, about the implications of loss of sovereignty by Britain as the result of this new proposed procedure. I have received cogent briefing on this subject from outside. These anxieties go to the very heart of the European Economic Community. Either you believe in the concept of the free nations of Western Europe joining together to strengthen their basic economies and to conserve their unique heritage of wetern civilisation or you believe that the loss of sovereignty would be so serious that it would threaten our traditional form of life. Certainly it would be naive to pretend that there will be no sacrifices. But in my belief the potential gains in the long term appear to be very great and far outweigh the losses.
For some years I have been a member of one of the sub-committees of your Lordships' European Communities Select Committee and therefore I have often seen Commission directives and proposals with which I disagreed. My fear has been particularly in relationship to the environment. In fact, I recognise—and this is a point that the noble Lord, Lord Bruce, made in a slightly different context—that in some matters the psychological approach of our European neighbours is different from ours. Sometimes we have had to give way; sometimes they have done so. Often a compromise has been found. I also have to confess that recently I have felt greatly disconcerted by the European Court overturning a decision of the Court of Appeal here on a point to do with the Customs and Excise.
These are examples of the penalties of membership of the Community. They are irritating, even galling; but I accept—and I suppose that each one of us has a struggle in our conscience on this great issue—that they must be set against the vision of a fully integrated European market, where commerce, transport and trade moves uninhibited between member countries with the same freedom as it moves between the states of the United States of America. The boost to our economy overall in economic and political strengths would be enormous. We can in fact become a united states of Europe, and we must recognise the point which my noble friend Lady Young made in opening the debate: that we live in an age of super-powers, with the United States and the Soviet Union, with Japan coming up and with China yet to come.
In this perspective, our best prospect of preserving our standard of life and our way of life is in partnership with our Western European neighbours as a member of the European Community. In my opinion, the more vigorous and generous our participation in the partnership, the more effective our contribution will be in developing the kind of European Community that we would like to see. In parenthesis, I say that I am sorry to note that my noble friend is not here, but it sticks out a mile that to join the European Monetary Fund is something which should have been done yesterday.
It is in this spirit that I support this highly significant step in the development of European unity; and, in the old countryman's phrase which the noble Lord, Lord Walston, will know well, "When you put your hand to the plough, you must follow through to the end of the furrow".
3.28 p.m.
The Earl of Bessborough: My Lords, as I think my noble friend Lord Cambell of Alloway is not here, nor indeed the noble Lord, Lord Hatch of Lusby, it is my turn to speak. I agree with every word that my noble friend Lord Nugent has said. I was going to say almost exactly the same thing. I shall continue to say it in slightly different terms, but I am very glad that he has spoken in the way that he has. I am very glad to have the opportunity to do so on this Bill so well introduced by my noble friend Lady Young and on the valuable report of the noble Baroness, Lady Llewelyn-Davies. Despite the conclusions of that report, which the noble Baroness summarised very effectively, I hope that the Bill will have a smooth passage through your Lordships' House.
We are now members of the European Community and indeed now occupy the presidency, and we want to make it a success. The battle over membership was fought 15 years ago and we decided to join. This was later confirmed in the referendum. Now we must make a success of our membership. As my noble friend Lady Young has said, it is true that we were not among the original parties who drew up the treaty, but now we are able to influence the nature of the Community and have an interest in doing so. The revisions set out in this Bill largely reflect our own objectives. In my view their introduction is therefore desirable both from a European and from a purely British national point of view.
On specific points—and this is one that has not so far been raised in the debate—I certainly support the proposals in the Bill about relieving the greatly increased workload of the European Court of Justice, whose proceedings as a vice-president of the Parliament I used to attend from lime to time. The establishing of a court of the first instance, in my view, should greatly relieve the main court of minor cases concerning staff, and so on. I shall be interested to hear whether the noble and learned Lord, Lord Denning, has anything to say on the establishment of this subsidiary court.
On the internal market, I believe there is general agreement on the importance of completing it by the end of 1992; and it is good that Her Majesty's Government have long championed the achievement of the freedoms set out in the treaty concerning the free movement of goods, persons, services and capital. I could not agree more with the commitment to accelerate progress towards these ends. Certainly it must be in the interests of British firms within the Community that this internal market should be completed so as to enable this country, in the words of my right honourable friend the Prime Minister,
"to realise more fully the benefits of our membership".
I also agree with the provisions concerning majority voting and the assurance of my right honourable friend the Prime Minister that Britain's position and that of the Westminster Parliament are properly protected on such vital questions as frontier controls in relation to terrorism, crime, drugs and immigration from outside the Community.
I note, too that the Luxembourg Compromise, which has been mentioned several times, concerning important national interests, is unaffected. I also

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support the new co-operation procedure giving the elected European Parliament greater influence by making its views better known and obliging the Council to take account of them before final decisions are taken, even if the last word must in fact remain with the Council.
In that connection I hope that the conciliation procedure between Parliament and the Council over the budget, in which in the 1970s the noble Lord, Lord Barnett, and I (he as Chief Secretary to the Treasury and I as leading the Parliament's delegation) used to be involved, is now operating more effectively. My noble friend may perhaps have a comment to make upon this.
I need hardly add that, as a former Minister for Science and Technology, and having advocated in your Lordships' House for nearly 25 years, and later in the European Parliament, a greater degree of European technological co-operation, I am glad that the purposes of European unity are clearly defined in the new Act in terms of the practical application and needs of industry. I hope that the potential of the internal market will be fully exploited, that public contracts will be opened up and that legal and fiscal barriers to co-operation will be removed.
As chairman in the early 1970s of the committee of inquiry into the industrial research associations, I am encouraged by the fact that the Community is now adopting a more industry oriented approach through the European strategic programme in information technology and the basic research programme known as BRITE, as well as Eureka, which met very recently here in London. Only through such co-operation can we in Western Europe hope to compete effectively with the United States and Japan. Incidentally, it is interesting to note how the United Kingdom has benefited from the EC regional fund to the extent of some £2 billion since 1975. We should not ignore that.
Political co-operation in foreign policy has certainly been moving ahead well, and it was remarkable that my right honourable and learned friend the Foreign Secretary was able to get agreement with the other 11 member state governments on the question of sanctions in South Africa. However much some may have opposed the agreed policy of postponing such sanctions, it is a remarkable fact that this policy was unanimously agreed by all 12 governments, for whom my right honourable and learned friend Sir Geoffrey Howe was speaking on his very difficult South African tour, and we have heard the account of his arduous work from my noble friend Lady Young only this afternoon. But, however difficult this tour may have been, at least my right honourable and learned friend was, as President of the European Council, speaking not only for Britain but for the Community as well.
On a possible future federal union in Western Europe which is, I think, in the minds of some members of the Liberal Party, I was interested to read what my honourable friend Mrs. Lynda Chalker said on Second Reading in another place. She made it clear that the Single European Act would not lead to federal union. And I was interested to hear my right honourable and learned friend Mr. Geoffrey Rippon say, also in another place, that European union was not about some Utopian plan for a European
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federation, but about how best we can, step by step, realistically bring about the aims of the Community.
In parenthesis, I cannot fail to mention, especially in view of the Statement this afternoon and the way in which it was treated, the tribute paid by my right honourable and learned friend Mr. Rippon to your Lordships' House as having, nowadays, a higher reputation in many quarters than another place, although perhaps the proceedings this afternoon may prove to have been an exception. I was glad that my other right honourable and learned friend the Foreign Secretary was able to say on the same day that, in a world where no European power can any longer stand on its own, our national goals can be achieved only in co-operation with our Community partners.
Of course, any development in the European Community towards European union is bound to cause some derogation of national sovereignty, as has happened, for example, through NATO and the IMF. But I do not believe that the Single European Act will involve any major derogation, and I am not unduly alarmed by the fact that the Act may slightly affect the scrutiny procedure in this House, which has been described by the noble Baroness, Lady Llewelyn-Davies, even if her committee's task may become a little more difficult.
I would say that if federal union may not be acceptable at present, we must develop a greater degree of political union in the Community, if Western Europe is to become an effective third political force in the world. Political co-operation, in which my noble friend Lord Carrington and my right honourable and learned friend Sir Geoffrey Howe have played such important roles, should continue in the case of all major international issues, even perhaps, ultimately, in defence—if this could be made acceptable to the Republic of Ireland and Denmark. Certainly so far as possible monetary union is concerned, to which I referred during our debate on Britain joining the exchange rate mechanism of the European monetary system, I was glad to hear my noble friend Lord Young say that full monetary union is the right direction and the direction which we should certainly follow.
We cannot yet tell, my Lords, exactly what forms political, economic and monetary union in the Community will ultimately take. All one can say is that we can be sure it will not be anything precisely like the Commonwealth or the United States of America, and even less the Soviet Union, or indeed the People's Republic of China. But when I became the first British vice-pesident of the European Parliament, a post in which I am happy that my noble friend Lady Elles has succeeded me, I had a fervent hope of greater political as well as economic and monetary integration. Although progress in these directions has been slow, I still retain these hopes today.
Finally, only yesterday one of my noble friends said to me that he thought I was clearly a more enthusiastic supporter of the European Community than of the Commonwealth. My reply to him was that as the son of a former governor-general of one of the most important members of the Commonwealth, Canada, I am still a strong supporter of that grouping of nations which I should not like to see disintegrate. I have read the two feature articles in The Times today on this

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subject, one of them by my noble friend Lord Beloff. Yet I must admit that as a member state of the European Community, we are, through the EC's Association of African, Caribbean and Pacific States, the ACP, associated with many more overseas countries than are members of the Commonwealth today. I am sure the Commonwealth still has a very important role to play in the world. Nonetheless, I warmly support Britain's adoption of the Single European Act and this Bill which will implement it.
3.42 p.m.
Lord Beloff: My Lords, under the rules of this House my five-year membership of the Law Sub-Committee of your Lordships' European Communities Committee comes to an end with this session. I shall not use the occasion to traverse again the ground in relation to parliamentary scrutiny which has been so fully expounded by the noble and learned Lord, Lord Templeman, and my noble friend Lord Broxbourne.
However, on a more general point, it has struck me over these five years how vast are the gaps in our legal and constitutional thinking between ourselves and most of our Continental partners. There have been times when I have felt some sympathy with the patriotic emotions expressed earlier this afternoon by the noble Lord, Lord Bruce of Donington. There are times when one is tempted to say, "We do it much better here". On the other hand, I do not think emotion—patriotic or other—should be a governing factor in considering the position of this country in the world, the problems that it faces, and the methods by which it might seek to resolve them. I have become more and more convinced over these years not only of the difficulties which there are in our membership of the Communities but also of the advantages which they bring and are bound to bring in the future.
It seems to me that a point which has been insufficiently stressed so far in this debate in relation to the changes in the Treaty of Rome which we are being asked in this Bill to agree to is that the relationship is and must be a bargaining one. This country has common interests and it has a participation in the general interest. The question for this country, as for its partners, is and will continue to be: how do you achieve a balance? The particular question which was explored by the noble Lord, Lord Bruce of Donington, was whether it was worth making the machinery rather more likely to produce a positive result if some of the positive results might be those which we would find disagreeable. That, of course, is a balance.
I find it very difficult to explain to myself—and I do not know whether other noble Lords felt this too—why the noble Lord, Lord Bruce of Donington, should find it odd that the Government response to the report to which he referred should have said that there is a balance of advantage. By and large it seems to come out on the side that we gain more than we lose. What could a government say? What would have been said of these proposals if every government had gone back to their parliaments and said, "Look, we have achieved total success. We are going to be able to have all the things we want and none of the things we do not want". People would have begun to think that this must be a very curious document indeed.
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So it becomes a balance, and I should have thought that with the safeguards—the number of matters which remain excluded from qualified majority voting, the matters upon which in one way or another unanimity (the veto) still remains in force—this comes out right. Otherwise, suppose we or one of our partner countries were to reject these proposals, we should be back with very little prospect of the enlargement of the operations of the Community in many of the areas which we have said again and again are of great importance to our own commerce and industry.
No doubt one could think of an ideal constitution which would say, "In the end Britain has the only vote", but that would hardly be a Community or commend itself to our partners. Therefore it seems to me that we have first of all to accept that this is a step forward worth making. Secondly, we have to express the hope—and I am sure it is not a vain hope—that our Ministers in the several councils will do their best to make sure that Britain's interests and voice are not overlooked, and that they will be as good bargainers on our behalf as the Ministers of some of our Community partners have proved to be in the past on behalf of their national interests. We must certainly try to ensure, as the Select Committee on the European Communities has said, that Parliament has the maximum number of opportunities to express its opinion. It can be no more than an opinion; the responsibility is with government.
On the question of the European Parliament, I take the more cautious view suggested by the noble and learned Lord, Lord Templeman, rather than the view suggested by the noble Baroness, Lady Llewelyn-Davies. It is of course true that representative assemblies have tended to acquire more power as time went on, but that has usually, if not always, rested on a dependence upon them by the executive of the nation or community involved. When it is circumscribed, as in this case, by very precise indications of what are and are not the powers, then any worries must at the moment, and for some time to come, be beside the point.
If we have a worry, then it should rather be to see that in the parliament as well as in the other institu-tions of the Community there is adequate knowledge of our own positions within our own Parliament on the subjects that arise. I myself feel that the hostility on the part of some Members of another place towards greater recognition of the role of Members of the European Parliament, and towards the provision of facility for those Members in Westminster, is something that does no one any good. Certainly it does not diminish the powers of the European Parliament in any way. It only makes more difficult the task of those who have to represent our interests in that parliament. I hope very much that noble Lords opposite, whose party has been unwilling to recognise the status of MEPs in another place, will think again.
It will surely become evident when this Bill becomes law, as it will become law, that whatever may have been the openings or alternatives available to this country in the 1970s or in the 1950s, the die is now cast. We can either do well in the communities, or we can do badly in the communities. But surely no one in any part of this House seriously believes that we shall turn our back on the communities. In that sense this

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quite modest Bill—and I will agree with my noble friend the Minister—marks yet another stage in the general acceptance of the communities as Britain's main area of economic, political and cultural influence.
3.53 p.m.
Viscount Massereene and Ferrard: My Lords, I spoke once or twice on the Common Market before we entered it, and at that time I was frightened of the bureaucracy in Europe. On the Continent they appear to have standards that are different from ours in certain spheres. Certainly that is the case in respect of their laws. Not being a lawyer, I certainly do not intend to speak about the law but I await with interest the speech of the noble and learned Lord, Lord Denning, regarding that aspect in relation to the EC.
I personally have always regarded the House of Lords as the guardian of our constitution, and, no matter what my noble friend the Minister has said, it appears that the Bill may weaken our constitution. There will no longer be the veto; but then, I understand that in certain respects, if all the other member states were against us, even when we had the veto, we would give in. In fact, according to the law of the EC we shall still have the veto; that is, according to the Treaty of Rome.
What I do object to is the way in which the Bill has been brought before your Lordships' House. The Bill comes to this House on the last day when we rise until 6th October. It rather seems as if it has been smuggled in. I only saw the Bill a few days ago and when I looked at the front of it I thought it contained some not very important amendments to our position regarding the EC. Of course, it is far more important than that. With due respect to my noble friend the Minister, it was rather hamfistedly brought in, but I will not dwell on that.
I should have preferred that in this debate we spoke more about the economic aspects of our membership of the EC, and indeed we have spoken a little about that. It is very important. We are told that 48 per cent. of our exports go to the EC. That has taken 14 years to achieve. I should have thought we could have done better than that. Your Lordships must remember that the EC countries export far more to us than we export to them. I believe it is at least 50 per cent. more, and probably above that.
People might say that that has caused some of the unemployment in this country because some goods that we import from the EC could be made here. Although that does not necessarily follow, it is a point worth considering.
We had the referendum 11 years ago, and if the public had been told then that we would not have the right of veto on anything serious affecting the UK I very much doubt whether the public would have voted for us to join the EC. For example, if we take sovereignty in regard to foreign affairs, I am sure that if the position that this Bill proposes had been applicable at the time of the Falklands war we would not have been able to defend those islands. With regard to our defence equipment, if we had wanted to buy any particular item of defence equipment from outside the EC we might have been prevented from doing so.
Baroness Elles: My Lords, may I intervene briefly? I can assure the noble Viscount, with all the knowledge we have in this House about the working of the EC, that the Falklands war would have been in no way impeded by our membership of the EC. On the contrary, the Prime Minister herself said that the very first person to telephone her at No. 10 to give full support was President Mitterrand of France. The question of the Falklands in regard to the EC is irrelevant to this debate.
Viscount Massereene and Ferrard: My Lords, but this Bill slightly alters the position from what it was then.
A noble Lord: No, my Lords.
Viscount Massereene and Ferrard: Then I am mistaken, my Lords, I thought it did.
Lord Stoddart of Swindon: My Lords, the noble Viscount is quite right, it does.
4 p.m.
Viscount Massereene and Ferrard: My Lords, my train of thought has been broken, but to get back to the point, what we must do is to try to make the EC far more effective in regard to the economic position. For example, I refer to the common agricultural policy. It seems to be quite crazy, as has often been said, that we have these mountains of beef, lakes of wine and vast stores of wheat and butter.
Of course, I am told that 50 per cent. of the funds obtained by the EC goes in dumping this food and in exporting it to places such as Russia, Eastern Europe, Libya and so on at a very small fraction of the total cost. That seems to be absolutely mad. Can we not do something to correct that situation? For my part, I do not know what we can do; I leave that to others who are more expert than I in these matters, but it is an appalling situation. I suppose that we could send quite a lot of the surpluses to Africa, but it would have to be done on a charitable basis and then the EC would probably run even shorter of cash.
I do not want to speak for much longer. There are many things that I should have liked to say, but most of my points have already been made. However, I should like to make a remark about not the honour—I do not think that is the right word—but the trust of the EC. I understand that in 1984 we were asked to produce more cash and, as a condition of doing so, we were told that there would be monthly reports on its spending from the Commission to the Council. So far as I am aware, there never have been such reports. That happened some time ago but it seems to be something like a breach of faith and it is worrying.
With due respect to the Foreign Secretary, whom I much admire and who, so far as I know, is a very kind and nice man, I think that he may have been slightly manipulated as regards the EC. I should like to read to your Lordships something which I found rather surprising but which may contain more truth than one would think:
"In 1940 the controller of the political section [of the Communist Party in this country] told his members to infiltrate the political parties, aiming for the right of the Labour Party and the left of the

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Conservative Party … Those infiltrating the Conservative Party would launch the project known variously as the Common Market, the European Economic Community, the European Community and. if the European Communities (Amendment) Bill is passed, the European Union".
It may be complete and utter nonsense, but I am quoting. It appears that this was to be used as a smokescreen for a Marxist takeover. If that ever happens, certainly it will happen a long time from now. However, I thought I ought to read that to your Lordships; and it should make one think. I shall say no more on this topic, but I do not feel too happy about it.
As I see the noble and learned Lord, Lord Denning, about to rise to his feet, perhaps I may first tell your Lordships about an experience of mine regarding the law in the Common Market. I had some tenants to shoot and fish and so on who came to me through an agent in Italy. The agent did not pay me and the debt represented quite a large sum of money. I tried to sue him in Italy, but my solicitor over here said, "Oh, it's hopeless, owing to the differences between Italian law and our law. This can go on for years and it will cost you a lot of money". So I gave it up. Now I am a bit frightened about that, but I am interested to hear what the noble and learned Lord, Lord Denning, will say regarding the differences between our law and the law as practised in various other countries of the European Community.
4.5 p.m.
Lord Denning: My Lords, even at this late hour I wish to remind your Lordships of the important constitutional questions now under discussion. First of all, I admired greatly the speech of my noble friend, Baroness Young. She explained the mischiefs and difficulties encountered in the running of the Common Market at the moment, as well as the differences of opinion, the delays and the obstructions of the machinery. It should be got rid of; I quite agree. I agree with all the measures which she was suggesting and all the procedures and the delegations. I fully agree with all of them.
I wish to remind your Lordships, nevertheless, of the impact of this Bill, if it is passed, on our Constitution. Fundamental to our constitution is the supremacy of the Queen in Parliament and that our laws should be enacted by Parliament, by its authority in regulations, or indeed by judges in declaring the common law. That is what I understand is meant by the supremacy and sovereignty of the Queen in Parliament. I hope to show you in the course of my observations that that sovereignty is being eroded and that we are coming under another sovereignty—that of Europe and of the Council of Ministers. That is the challenge we face today. It is all very well for Mrs. Lynda Chalker to say that the great debate is over. It should be just beginning.
When we went into the Common Market and the European Communities Act 1972 applied the Treaty of Rome, let me remind you that that was dealing only with economic unity. It involved destroying customs barriers, if you like, destroying tariff impositions and seeing that there was no undue or unfair competition or abuse of dominant positions. All that was in
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the Treaty of Rome to deal with economic matters. That was the sole concern of the Treaty of Rome, both in its preamble and in its illustrations. When the matter was put to a referendum in this country, it was put in these words:
"Do you think that the United Kingdom should stay in the Common Market?"
Sixty-six per cent. said "Yes". There, again, the emphasis was on economic unity and on staying in the Common Market for the sake of that economic unity.
My Lords, as I view the Bill now before Parliament it is a new challenge. It involves not only economic unity but, if you please, political and indeed legal unity. That is what is proposed by this Act. That has not been supported by any referendum. It is a new challenge which we have to face and I must tell you that in my opinion our sovereignty—the sovereignty of the Queen in Parliament—is seriously eroded by this Bill which is now before this House.
When the Common Market was economic, one of the difficulties faced was this. The book on the European Union at page xxvii states:
"Since the powers of the Community are limited, it follows that, however desirable a particular measure may be. it is first necessary to determine whether it is legally possible. In general, under the EEC Treaty, it is necessary to show that the measure is designed to achieve economic objectives … This by itself causes delay since there may well be dispute, both within the Community and within or between Member States, as to whether a particular measure is permissible or not".
That limitation as to economic matters is disappearing. The preamble to the Single European Act, which according to the Bill is to be treated as part of our law, states:
"Moved by the will to continue the work undertaken … and to transform relations as a whole among their States into a European Union".
That is the objective. It is not confined now to economic matters.
The preamble also states:
"Determined to work together to promote democracy on the basis of the fundamental rights recognized in the constitutions and laws of the Member States, in the Convention for the Protection of Human Rights and Fundamental Freedoms and the European Social Charter, notably freedom, equality and social justice".
That is in the preamble which we are putting into statute. Furthermore, Article 3 states:
"The institutions of the European Communities … shall exercise their powers and jurisdiction under the conditions and for the purposes provided for by the Treaties".
Having read that, I ask this question. Suppose that the Council of Ministers, sitting in Brussels, if you please, with the co-operation of the European Parliament in Strasbourg, made a decree that member states should apply and implement Articles 1 to 14 of the European Convention on Human Rights. As I understand it, that would become our law; the convention would be written into our law.
Year after year we have had Bills before us seeking to put that convention in as part of our law. It has never got in because of the difficulties that prevented it; it never got through Parliament. Can all those difficulties be overcome by the Council of Ministers in Brussels saying that the convention shall apply henceforth throughout the market? That is the question I ask. If so, we have a great new legislative power in Brussels taking supremacy over our

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Parliament. How far does that legislative power under the new Bill go? It is not confined to economic matters; I have shown that. It goes to political and legal matters as well. That is why I am worried about the extent of the Bill. In this Bill we recognise the European Convention on Human Rights, although we have not enacted it. Is that the supremacy of Parliament?
Under the recent decisions of the European Court at Luxemburg our statutes have been held to be invalid and inoperative in England. Is that the supremacy of Parliament? Let me give two illustrations. The cases took place this year. The one which is almost the most important relates to a dietician in a Southampton hospital. She had worked for some years. She went on working after the age of 60. At 63 she was dismissed, as she was entitled to be dismissed. In 1975 our social security system provided that women who retired at the age of 60 could thereafter obtain supplementary benefit at once. Men did not receive it until they retired at the age of 65. That was the law enacted by Parliament. It was dealt with under the sexual discrimination legislation. Under Section 6(4) of the Social Security Act 1975 it was perfectly legitimate to have different retirement ages.
That lady challenged the dismissal. She did not prevail in our courts. She took the matter to the European Court. It said that it had a directive made by the Council of Ministers which said that there should be no discrimination with respect to employment and retirement. She said that our law did not matter and that the directive prevailed. She said that she could not be dismissed at the age of 62 and should be treated the same as a man. The European Court and the directive said that was so. She said that the court should not take any notice of the 1975 Act.
I am sorry to say that the European Court held her to be right. Our 1975 statute was in effect overruled by a directive issued by the European Community in 1976. We must face that. Our Legislature must now reform our law and get round that decision. It presents an economic problem. We talk about the supremacy of Parliament, but it can be overruled in that way by a directive from the Council of Ministers.
There are a number of cases, and they all occurred within a short time. I shall tell your Lordships about another one. It is almost too sordid to mention. It is all about inflatable dolls. They are life-size female figures, with orifices and the like. They can be blown up to full size. They came from Germany. The Customs authorities at Heathrow said, "We cannot have this stuff coming into the country. It is obscene and indecent."
The magistrates' court and the Crown Court agreed with the Customs authorities, because in 1876 Parliament had declared that the Customs authorities could prevent obscene or indecent articles coming into the country and could order their forfeiture. You might think that the Customs officer could say, "But I have my own Parliament. The Act of our Parliament allows me to prevent these things coming in". "But", said the European Commission, "Not so quick; look at the treaty". "Yes, I do not mind looking at the treaty. There is a special article which says that a country can be justified on the grounds of public morality in prohibiting the imports of goods like this". The Customs authority therefore says, "That is all right. I
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have looked at the treaty. I can still obey my Act." The European Court says, "Stop, a minute. Do not look only at Article 37 which says that you can justify it on the grounds of morality. Look at Articles 30 and 34 which deal with the question of the qualitative importation of goods and matters of that kind. If you look at that and at our decisions you will see that you can only prohibit the import of those indecent articles if England itself had a statute prohibiting their manufacture here".
Although none has ever been made here, one would have to go fumbling through the statutes. After the Customs officer goes through all the statutes, they say, "That Customs Act of 1876 which enables you to prohibit the importation of obscene or indecent articles is no good to you. You need not obey that in England any more. You need not apply it. The statute—the treaty—as we interpret it does not allow you to prevent their importation". The judges, no doubt being dedicated to European unity, and to the free movement of goods, may decide that if these goods can be manufactured and exported from Germany, surely they can be imported into England.
I simply draw your Lordships' attention to our Customs Act 1876. That is perfectly clear in its terms. It tells the Customs people that they are entitled to prevent the importation of indecent or obscene articles. That statute is made of no effect, not by the treaty, because that allows us still to prohibit this. It is prohibited by the decision and the way the European Court applied it.
How are Customs officers in England to act? If they read the Act of our Parliament it is all right. Then afterwards, through some directive, the European Court says, "You need not obey this Act". That is why I give your Lordships that illustration. The supremacy of Parliament, of our own courts, of our own Acts of Parliament is being overruled from Brussels or from the court. This is a great challenge. The supremacy of Parliament, and our own Acts of Parliament, is derogated and made of no use by decisions made elsewhere and of which the people who have to apply them have no notice. That is why I say that it is a challenge.
If one takes our courts of law, under the European Communities Act 1972 the supremacy of Parliament was maintained. Section 2 said that the provisions of the treaty apply, if they have said they are to apply. If one does not have directives, then they have to be brought back into our English law by means of our regulations.
I had a very good illustration of that the other day in our debate on the Devonport dockyard. The European directive dealt with the transfer of undertakings and what was to be dealt with in regard to the servants of those undertakings. It was dealt with by a directive in Brussels. However—this is the right way to do it—our own department made regulations part of our law so that it was all set out in regulations in regard to the transfer of undertakings. That is the way to do it, and that is why in a sense I say that the European Communities Act 1972 did not contemplate the erosion of our sovereignty.
Let us consider our own courts of law. The White Paper prior to the 1972 Act said that there would be

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no erosion of our sovereignty. So far as I can see, that was quite right at that time. It was all subject to an Act of Parliament being introduced. The only matters which went outside were questions of interpretation of the treaty. They were sent off to the European Court. Such questions were the only ones that had to go to the Community court where they all knew the meaning of the treaty. How far we have departed from that!
As I have told your Lordships, the European Court has ruled that there is supremacy of European law as expressed in the decrees of the Council of Ministers. Such laws take supremacy over our own laws and anything inconsistent with those directives is not valid. Moreover, it has been held that those directives can be enforced in our own courts and have supremacy over our own courts. That is why I asked: what important constitutional questions are involved before us?
Let us consider again our courts of law. At present in Europe there is just the European Court of Justice at Luxembourg deciding points of law on the interpretation of the treaty. I have shown your Lordships how, so far as I can see, it has gone beyond that. However, such matters at present go to that one court—the European Court. Under the new treaty—and I can understand it—that court is so overwhelmed with work that something must be done to relieve the pressure. Let us have courts of first instance; that is what the treaty says.
Under the treaty, there are many instances when a person can bring proceedings. For example, on the financial side, there is the abuse of a dominant position in the market, or there is the example of unfair competition. Articles 85 and 86 of the treaty are part of the law of England and they could and can be enforced in the European Court or here. Those questions can now be decided by a court of first instance.
Are we to have courts of the European Community sitting here in England? There may not be an Englishman sitting on the court; I do not know. The four or five cases about which I have been telling your Lordships all involved foreigners, all dedicated to the cause of European unity. Are we now to have other courts sitting in England? Hitherto the jurisdiction of our courts has always been the jurisdiction of Her Majesty's courts. Are we to have in England courts of first instance from overseas deciding our disputes? That is a constitutional question.
I thought it my duty this afternoon to describe to your Lordships the great constitutional matters which go beyond this Bill. In the other place, Mrs. Lynda Chalker said that the great debate was over. That is not correct. As I understand the position, the great debate ought to begin. It ought not to be just put in at the end of a Commons Session and guillotined. It ought not to be put in on the last day of our proceedings here. It is a great constitutional issue.
Mark you, I agree entirely with the objectives that Mrs. Lynda Chalker gave. I agree entirely with those objectives, and about the mischief that there is and what should be done to speed it all up. I take exception because the measures proposed in this Bill to cure that mischief ought to be modified or dealt with in some other way. We have to face the fact that by going into
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Europe like this our sovereignty will be eroded in the future. It looks as though this is one step towards a federal union.
We may have to face that. It may be the right thing in the long run for our country to be just one of the European states. I can see the force of the argument that we have no power in the land; that we are just a little island off Europe; that we must join this great Europe and be just one of the states of Europe, and then we can use our voice with the others. I can understand that argument. I can understand all those who derogate to European Union. It may be the right result in the end, we have to face it, but at all events the country ought to know this before it takes these great steps, and that is what I have tried to tell your Lordships this evening.
4.32 p.m.
Lord Bethell: My Lords, having so recently debated the matter in another Parliament some hundreds of miles from here where the concern overall was merely about the modesty of the proposals, and whether indeed they are firm enough to enable the European Community to fulfil its potential and indeed its obligations, it is indeed a sobering experience to listen to your Lordships today expressing certain misgivings about the Single European Act.
I find, though, a certain sense of déjà vu in many of the contributions made this afternoon. I remember that the questions that were asked and the arguments that were put—and not least by the noble and learned Lord who has just resumed his seat—were hotly debated in the early 1960s during our first application to join the Community. They were discussed before our successful application was made by the then Labour Government under Mr. Harold Wilson, supported by Sir Alec Douglas-Home. They were most thoroughly debated in both Houses of Parliament in the run-up to accession in January 1973.
At that time it was made perfectly clear that there would be another way of making laws which would be applicable to all of us in the United Kingdom. It was made clear that a law from then on would not necessarily be made by the House of Commons and the House of Lords and receive the assent of Her Majesty; that it was possible for a proposal to come from the Commission in Brussels, for it to receive the advice of the European Parliament, and for it to be made into law by the Ministers sitting in Council, either as a regulation which took automatic effect as law in all the then nine countries, or as a directive which required the ratification of the national parliament.
I would say with great respect to the noble and learned Lord that there is not quite so much new about what is proposed as he would have us believe. What should concern us rather more is not the safeguards that we require in order to make sure that somehow your Lordships and another place are not weakened, but how we can make more effective the machinery and the decision-making process of the European Community institutions, because the danger is of paralysis rather than usurpation. I should put that argument to the House.

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Time and again we have found that some crisis has arisen during our European Community membership: whether it be an economic crisis over a dispute over steel with the United States, for example, or over fish with Denmark, a Community partner, or the present crisis over importation of cereals or citrus from the United States. The Community finds it difficult to come to a decision because the decision-making process is so slow and the institutions do not have the machinery' to carry it out as they should.
I believe this proposal will improve the situation tremendously. This is why I hope your Lordships will support it. We surely must try to get an internal market completed by 1992. I was glad to find that even those noble Lords who were sceptical about some of the constitutional aspects of the proposal nevertheless believe, by and large, that we must have a true Common Market by 1992, otherwise the whole enterprise will have been in vain. I believe this is behind some of the disillusionment and scepticism of the people of this country about the European Community. It is meant to be a Common Market, but it has not been a common market. People travelling to the Continent see lorries stacked up at frontiers and find themselves still obliged to queue to present passports, to have their cars examined at frontiers and to pay VAT on modest purchases when they return. They find, as many have mentioned in earlier interventions, that proposals where Britain is strong economically, such as in the insurance market, banking and air travel, have still not been implemented because of the cumbersome nature of the decision-making process. This is primarily what the Single European Act is designed to achieve.
While welcoming the report of the Select Committee, which is extremely educational and provides a good summary of the dilemma, if there is a dilemma, I must say with some respect that I regret that such prominence was given in paragraph 27—the first paragraph of the conclusions—to the bald assertion that this Single European Act will weaken the power of the United Kingdom Parliament. I do not agree. I do not believe that it will weaken the power of the United Kingdom Parliament. On the contrary I believe that after a certain period this country and our partners will be so strengthened by the Common Market by doing away with the costs of barriers to trade (the famous £7 billion a year that it allegedly costs us to maintain barriers to trade) that the power of our 12 countries will be enormously increased. Therefore in net terms the power of the United Kingdom Parliament will be increased; in other words, it will be better to have 80 per cent. of £200 than 100 per cent. of £100.
The alternative, to maintain the principle—which clearly is much longed for by the noble and learned Lord, Lord Denning—of the pure sovereignty of the British Parliament I am afraid is not possible in those circumstances. We have been through that a quarter of a century ago, or certainly two decades ago, and I do not believe that the present Single Act proposal is anything more than a logical progression of what was decided all that time ago. After all, the preamble to the Treaty of Rome speaks of a closer union of the peoples of Europe and this is a term very similar to that phrase,
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"European Union", which caused so much alarm in the hearts of some noble Lords who have spoken.
My own fear is that unless we are able quickly to pass this Bill and implement the new procedures we shall find that the European enterprise is like an aircraft which is losing speed and therefore liable to stall, liable to crash, liable to be forced to make a crash landing, if you like—and what a crash landing that would be! The alternative is to get the engines moving faster and to use them to their full potential, to use the wealth of expertise that we have in Europe, to pool it in order to get better technology working so that we can begin to compete with Japan and the United States in computers, which we are in no way doing at the moment, and to get the transport infrastructure of Europe on to a reasonable level. All this will require streamlined decision-making, and I see no alternative to the proposal now before your Lordships if this sort of decision-making is to be achieved.
Finally, I believe that under these procedures better scrutiny provisions are needed by the United Kingdom Parliament. On many occasions, I have explained the very high regard in which your Lordships' reports are held in Brussels and Strasbourg—and the noble Baroness, Lady Llewelyn-Davies, mentioned this in her intervention. I think your Lordships do a magnificent job in the scrutiny of European proposals, but I have to say that the reports that come from another place demonstrate the fact that Members of another place do not have the time or the resources to go into these proposals with the same care and they do not have time either to debate them sufficiently on the Floor of another place.
This is a great worry and is a matter of considerable concern. It explains, I think, why, for instance, this present European Communities (Amendment) Bill caused such amazement when it came to another place. One would almost have thought that it was something sprung upon us; and even one or two of your Lordships have said, "What is this thing that has been sprung upon us?" Good Heavens!, it was agreed in Luxembourg by the 12 Governments in December 1985, more than half a year ago, and very widely reported. It has not been sprung upon us. It is a matter that has been on the record for more than six months.
I believe that better scrutiny procedures are required. I would mention in this connection that in Germany there is a scrutiny procedure consisting of a committee of members of the Bundestag and members of the European Parliament, and they help one another in scrutinising Commission proposals from the point of view of the German national interest. This works very well. I wonder whether that is an idea that the Minister would consider. I imagine that it would need a fair amount of care before it was either taken on or rejected.
I understand, too, that Belgium has just adopted a similar procedure, a committee of members of parliament and members of the European Parliament, to consider proposals and to scrutinise them in the national interest. Because it is by no means the case that members of the European Parliament lose their national identity when they go to the Continent. Of course they do not. They remain representatives of this country and indeed of their constituencies; and so I

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agree with the noble and learned Lord, Lord Templeman, that my noble friend Lady Elles and I are not two heads of a nine-headed Hydra. We are British Parliamentarians, in the same way as your Lordships or as Members of another place. It is not in our interests that proposals should go through which are contrary to the British national interest.
Nevertheless, if such a committee were to be constituted I would venture to suggest that it would be useful to have the European view fed into it, because it is a little one-sided to have scrutiny procedures which concentrate on the negative side of things—should we stop it; should we prevent it?—rather than on the positive idea of what can be achieved if the proposal is to be put through from the full European point of view.
So I would suggest that this Amendment Bill to which we may now give a Second Reading is thoroughly necessary if the venture which we embarked upon 15 years ago is to be made to succeed. I welcome the proposals to give the European Parliament a chance for a sort of "second reading" of European legislation. I would suggest that that power which will probably be given to the European Parliament is one somewhat analogous to that enjoyed by your Lordships. It is emphasised that the Council of Ministers will have the final word in European legislation. In our legislation another place has the final word, but in your Lordships' House we have the right to say to a proposal: "We don't agree; think again. Have you considered this matter or that aspect? Please take a look at it and consider seriously whether you are right or wrong." I predict that this will be what the European Parliament will do when proposals are referred to it for second reading after they have been put through the first legislative procedure by the Ministers.
I believe this is a modest and sensible step forward. It does not bring us by itself to any great European union. It is a step towards that, whatever it may mean. Certainly it is not a step towards a federal Europe, as one or two speakers have suggested: that is something for the very distant future, if it ever comes at all. I would suggest that it is not for our generation. However, I believe it is a measure which is thoroughly essential if the ship of the European Community is to be allowed to proceed to bring us the goods that it promised us and which it can still bring us if only it is allowed to have this measure that will help it to reach its final destination.
4.49 p.m.
Lord Moran: My Lords, I must first apologise for having had to miss some of the earlier part of the debate owing to an engagement elsewhere.
This new treaty seems to have come us enveloped in a fog almost as dense as that in the opening pages of Bleak House—a fog which the noble Baroness strove valiantly to dissipate in her very helpful opening speech. It has been given a name (the Single European Act) which, despite the noble Baroness's explanation, is far from being immediately clear and intelligible and which the Foreign Affairs Committee of another place say
"must arouse fears that it may be purposely obscure and designed to mask some policy which the authors dare not yet publicly espouse."
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Its importance seems to have been rather surprisingly played down by Ministers.
But the treaty makes fundamental changes. The noble Baroness and the noble Lord, Lord Bethell, cast doubt on the conclusions of your Lordships' Select Committee's valuable report, that,
"the powers of the United Kingdom Parliament will be weakened"
by the Act; that there will be a
"gradual replacement of national competence by Community competence"
and that there will be an
"increased risk of Community law which may be unwelcome to the United Kingdom."
But it seems to me difficult to contest their view that there is a price to pay—quite a heavy price. If that is right, we need to consider whether the prospective benefits outweigh the cost. We do so in the belief that the Government did not want this treaty, but thought that the objectives of last year's Milan Council could be met without treaty amendment or changes to the institutions. Unfortunately, as often happens, they seem to have been persuaded against their better judgment to give way.
I should like, first, to say a brief word about foreign policy co-ordination, which is dealt with in Title III Article 30. This is clearly desirable in principle. It has existed in practice outside the treaty for a considerable time. It consumes a good deal of the time of very senior officials, but until very recently it has not, I think, produced much of real significance. When Community countries want to oppose us on foreign policy issues in the United Nations or elsewhere, they do. Member states will now, under this new treaty, be bound to try to
"formulate and implement a European foreign policy."
The possibility of achieving that is, I think, somewhat distant.
But another objective, the completion of the internal market, is clearly in our interest. The fact that it has been incomplete has been damaging to the United Kingdom. We have been flooded with Continental cars, textiles and chemicals, but we have been prevented from selling our insurance and financial services on the Continent. And with manufactured goods we find, again and again that our market is open and free, that Continental manufacturers can sell here without difficulty, but that our own manufacturers encounter serious obstacles which increase their costs and make it uneconomic or very difficult for them to sell to Europe. It has been a one-sided and unsatisfactory business. But is it certain that a move to majority voting is necessarily the best way of putting things right? Can we be sure that it is only one or two rogue governments that are holding up completion of the internal market?
It was only a year ago that the Prime Minister said in another place
"It is important that the internal market be completed, but 1 think it can be completed keeping the unanimity rule."—[Official Report, Commons. 2/7/85: col. 189.]
And an economic writer in the Guardian last December argued that,
"the reality within the EEC is that most other countries are unwilling to liberalise financial services, because most fear for the consequences to their own sectors. Why will majority voting help?"

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Perhaps the noble Baroness who is to reply to the debate could answer that question.
This treaty raises fundamental questions about the Community. First, what is our long-term objective? The preamble to the Act states that it is
"to transform relations as a whole among their States into a European Union"
and that the signatories are,
"resolved to implement this European Union."
But the Prime Minister said in another place on 5th December last:
"I do not believe in the concept of a united states of Europe, nor do I believe that it would ever be attainable … I am constantly saying that I wish that they would talk less aboutr European and political union. The terms are not understood in this country".—[Official Report, Commons, 5/12/85; col. 432.]
Now the preamble to this Act and the Prime Minister's remarks seem far apart about our ultimate objective. I am not surprised that the Foreign Affairs Committee of another place should have concluded that
"The references to European Union in the preamble are perhaps unfortunate, given the wide divergence of opinion about what that term—and, indeed, the Stuttgart Declaration of June 1983—is supposed to mean."
Perhaps the noble Baroness, when she replies, could clear up the uncertainty and tell us where in the Government's view we are really heading.
When we went into the Community, and when later the referendum was held, it was argued that there were both overwhelming economic advantages and wider political benefits available if we joined. On the economic side, things can hardly be said to have worked out brilliantly. It is true that there has been a change in the pattern of our exports, with far more now going to Europe; but there has been an even greater growth in our imports from the rest of the Community. Sixteen years ago we had a substantial surplus in our trade in manufactures with the EC. Now, for every £100-worth we export to Europe we import £140-worth. Only North Sea oil, a diminishing resource, is enabling us to continue with such an imbalance. Western Europe has captured a large share of our market, while we have been made to shoulder much of the burden of supporting their agriculture. This huge deficit has resulted in the loss of hundreds of thousands of jobs in this country.
On the wider political aspects, I think we have an unfortunate tendency to find ourselves enmeshed in organisations where our own views are far apart from those of the majority, so that we find ourselves constantly isolated with our backs against the wall. This has happened in the Commonwealth and it happens in the Community. We have been members of the Community for a longish time now, but it has not, it seems, aroused much enthusiasm in this country. The public sees constant acrimonious meetings and an absurd common agricultural policy now spending £150 million a week on disposing, somehow, of unwanted food, to say nothing of nonsenses like goats being classified as sheep, or attempts to change the name of cream crackers because they contain no cream.
But for better or for worse—mostly, I fear, for worse —we are in the Community. So is the transformation to be brought about by this treaty in our interests? And
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will it command support from the British public—or rather, would it command such support if they understood what it was all about? I am far from sure. Unlike the Danes, we are not being allowed a referen-dum to consider the issue. Our voice, both that of British Ministers and that of the British Parliament, will, I believe, be less effective. Your Lordships' Select Committee has pointed out that the powers of United Kingdom Ministers will in future be circumscribed in no less than five ways. Even more than hitherto, we shall, I fear, all too often be a protesting minority of one or two countries, with our 10 out of 76 weighted votes. Although the noble Baroness assured us that the Luxembourg compromise is unaffected by the Act, the Foreign Affairs Committee of another place concluded that this, our one remaining lifebelt, will now be a substantially less effective safeguard than before.
The assurances given at the time of the referendum that important steps could not be taken without the consent of a British Minister answerable to this Parliament are no longer valid. We are, in fact, bit by bit, losing control of our own destiny. Already our courts are being overruled more and more frequently by the European Court. Now our power to deal with our own problems and our own affairs in the way we judge best is being whittled away, to be replaced by majority decisions by countries which have very different histories and traditions. It is being so reduced by pressure from those who want to see a super state, the United States of Europe, in which the Prime Minister does not believe, and who are driving a reluctant Britain down that road.
One major step down the road taken by this treaty is the change in the powers of the European Assembly, now to be officially termed a parliament, especially with the complicated co-operation procedure. Under this, as I understand it, amendments to legislation by the European Assembly can be rejected by the council only if it is unanimous. That will never be easy, so in practice I imagine that the assembly will have much more power. Up till now, its role has, I think, been largely advisory, but it is now beginning to seek legislative power which must be at our expense. The MEP, Sir Henry Plumb, says, "We must accept the Luxembourg agreement, wring it dry, and then ask for more". As a citizen, I have often been unhappy with the decisions of this Parliament, but I would rather put up with decisions I dislike taken by my fellow countrymen than have an ever-increasing number of the laws and regulations governing my life taken by a body in which British representatives are only a small minority.
In sum, we have before us a treaty containing important changes which diminish our sovereignty and the powers of this Parliament. The British people are not being asked directly about these changes; indeed, I think they are largely unaware of them. But if in due time they come to realise what has happened and make it clear that they do not like it, we shall be in a difficult position because we shall have given away some of our sovereignty, as my noble and learned friend Lord Denning, with his great authority, has told us, without genuine consent from the electorate. That seems to me a dangerous thing to do.
5 p.m.
Baroness Elles: My Lords, one of the great differences between your Lordships' House and the European Parliament is that here we hear so many different views from so many different sides of the House and all ending up with completely different conclusions. One of the great joys of the European Parliament is that we seem to know roughly where we are going and what we want for the benefit of our own citizens and our fellow citizens in the European Community. It is on this basis that I warmly welcome this Bill before your Lordships' House today.
I know that many people have been befogged and bewildered by the preamble of this Single European Act, referring to those very unpleasant and highly indigestible, for the British public, words "European union". With the experience which I know my noble friend Lord Bethell shares with me and many others who have been, if I may call it so, on the European circuit for some years, perhaps I may assure my noble friends and noble Lords with all the power at my command that not one single national government in the European Community want either a federal state or a confederal state. No national government are going to give up their own powers and no national parliament is going to allow its own national identity to be swallowed up into some amorphous Brussels organisation. This is the experience which we have all had in working within the European institutions and I am absolutely positive that, at any rate for my lifetime, there will be no question of any federal Europe or anything else. But the purpose of this Bill is very clearly spelt out in the articles which are proposed in the Bill itself. I am speaking strictly to the European Communities (Amendment) Bill before your Lordships' House. They are to do with the forming of the internal market.
The internal market, as your Lordships will know, is an idea for which this Government have been pressing for many years since we joined the Community. As an island, we recognise perhaps more than any part of the Community the difficulties of tariff barriers, customs, of delays at the ports and of all sorts of legislative measures which are stopping our goods and services and people and capital flowing freely through the European Community. The purpose of the Bill, as I see it, is to free these log jams and to allow all the measures that we need for Britain to be passed. This is the purpose of the Bill; and this is why I say that this Bill is needed by Britain perhaps more than any other Community country—to ensure that British interests are sustained, maintained and developed.
My noble friend Lord Bethell has already mentioned the cost of this "non-Europe", as it was called so ably by Professor Ball and Professor Albert. Those noble Lords who have read the report on the recovery of the European Community will recognise that. It is not only the £7 billion at customs barriers and so on. It has been estimated by colleagues who have run the Kangaroo Club of which many noble Lords may have heard—and I pay full tribute to our colleague in the European Parliament, Mr. Basil de Ferranti. who has worked so hard in this field—that if the Bill were passed something like £46 billion, which is roughly 8 per cent. of our total trade, would be pleased to the Community for the good of business.
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Noble Lords who are connected with business, commerce and finance will know that everybody in those fields in this country says: "We need this internal market; please get on with it and do what you can".
Those noble Lords who have read the White Paper by my noble friend Lord Cockfield—I suppose we can still call him that—a commissioner in Brussels, will know that the provisions are set out clearly date by date. The detailed provisions are spelt out. There is nothing for the next four years that is not already known to Her Majesty's Government. We have excellent civil servants in every department. They know, draft directive by draft directive, what will come on the table if we can get it through. To my mind, this modest Bill may help in getting these measures through.
The noble Lord, Lord Moran, quite rightly drew attention to our trade in the European Community, but, regardless of the fact that we import more than we export, we should look at our own exporting and marketing facilities and abilities. Of the 10 top countries to which we export eight are members of the European Community. We must ask why we are not doing better ourselves.
As I see it, the objectives of the Single European Act are to amend the treaties that are holding up the decision-making processes in the Community. As one noble Lord pointed out, it took 17 years to get through a directive on architects and 16 years to secure a directive of pharmacists. Such delays are holding up the possibility of people in this country obtaining jobs in other parts of the Community, so it is also a question of blocking career structures for young people. There are many spin-offs where we have been closing the door and holding back this country from benefiting from membership of the Community.
How does the Single European Act intend to achieve those objectives? First, there are already 40 articles in the treaty that use qualified majority voting. The Bill will increase the 40 articles to 51. It will change six that are unanimous into a qualified majority, and there are five new articles that will have a qualified majority. To those who are afraid of the European Parliament having more powers, I say that I wish that were true. However, as has been pointed out by the noble Baroness, Lady Ewart-Biggs, when she spoke about the galloping horse that had its legs tied closely together, the fact is that even the co-operation proposals in the Bill will mean that the European Parliament will not have any powers of co-decision. It will change its role but not its powers. That must be made very clear.
The only benefit will be that brought out by Mr. Rifkind when he gave evidence to the Select Committee on European union. He pointed out, perhaps too honestly, that many decisions were taken by working parties and management committees long before the opinion of the European Parliament was even received by the Commission and by the Council of Ministers. By a process of co-operation in those very few articles, we shall at least be able to ensure that the Council will be aware of our amendments and that it will have to take a decision on our amendments after we have passed them in the European Parliament. That is at least one very small step forward in the role

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of the European Parliament in the formation of legislation.
I should like to say something about the scrutiny powers. I see that the noble Lord, Lord Bruce of Donington, is removing himself from the Chamber, but he made a point with which I and many other noble Lords agree. A problem will be created unless we examine the scrutiny powers very carefully and sensibly to see how we should proceed. The noble and learned Lord, Lord Templeman, addressed his main points to the difficulty of the Commission and its powers in relation to secondary legislation.
Under Article 155, as noble Lords will know, at present the Council can delegate for the Commission, but it very seldom does so for the reasons that have been clearly adumbrated by the noble and learned Lord, Lord Templeman. The fact of the matter is that in the new draft proposal for the implementation of procedures that has been put forward by the Commission, it has taken unto itself a very considerable role in secondary legislation. I may tell your Lordships that in the last session of the European Parliament, I objected very strongly that it was not the democratic practice of this parliament or of other national parliaments that the executive should have such powers over secondary legislation when there is no way of scrutinising those powers or of being able to amend or comment upon them.
I point out that the European Parliament can sometimes impose some form of democratic control, although that is not always recognised by another place. So as a result of that debate, the proposal in question was stopped from going through the European Parliament last week. We have held it up because we say that the matter has to be studied further. The European Parliament and the Council of Ministers must have an opportunity to see what is the secondary legislation before it is adopted. We tabled amendments that the Parliament should be informed and consulted before this secondary legislation is adopted. I hope we shall be able to come to some measure of agreement. I certainly hope, through my noble friend the Minister, that the Council will be watching very closely this particular draft proposal from the Commission to see that it does not go through unless there is some amendment to its present state.
I noted in the report from your Lordships' Select Committee that the views of the European Parliament will be taken in the second stage of the report—this is an interim report—so I very much hope that the noble and learned Lord, Lord Templeman, will be able to listen to some of the objections that the European Parliament raised; particularly in a title which was known as the Hänsch Report on which we refused to vote at the last session.
I should like to comment on the point mentioned by my noble friends Lord Bethell and Lord Beloff concerning the relationship between the European Parliament and scrutiny committees both in your Lordships' House and in another place. It is quite incredible that in another place they can hold a Select Committee on the European budget without a single member from the Commission being able to consider
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the proposals before the Council of Ministers on the European budget earlier this year. It was an incredible document which could only have come out of Alice in Wonderland. It bore no relation to reality. Indeed, if only it had been able to take evidence, that report would have been infinitely more valuable.
Therefore, I should like to propose with my noble friend—I gave notice to my noble friend the Minister that we would make this point—that there should be some way in which the MEPs could be given the opportunity to express their views to the Scrutiny Committee in another place. Of course, I know that through the courtesy of the noble Baroness, Lady Llewelyn-Davies, many MEPs (not only British but of other nationalities) are invited to give evidence to the House of Lords' Select Committee.
I believe that it would be a practical and sensible way of proceeding to have—as do the Belgian and German governments, and as other national parliaments are thinking of having—a small committee of, say, 10 members on either side to meet once a month. Either side can have items on the agenda of national importance to the country concerned—in our case, of course, Britain and represented only by British MEPs in proportion to their political parties. That idea is well worth examining. It could be done on a continued basis, particularly in relation to secondary legislation which is going to arise under the new proposals.
I should like to say a few words about the co-operation proposals which are in the Bill. I know that some noble Lords have expressed concern about the veto. This, of course, ties in with paragraphs 15 and 16 of the Select Committee report which the noble Baroness, Lady Llewelyn-Davies, so ably introduced. I must say that the first time I slightly disagreed with some of the contents of this report was particularly in relation to paragraphs 15, 16 and 17. From the way the paragraphs are written it seems to me that there is no understanding of the way the system works.
The Commission does not just draw out draft proposals from a hat. They are usually decided with advisory committees, management committees and all sorts of committees long before a draft proposal is actually planted in front of anybody. I have always held that the procedures in the EC are infinitely more democratic (dare I say?) than in our own country where the first sight that the public have of a Bill is on First Reading. A draft proposal in the Commission, on the other hand, is circulated widely for general discussion and comes before the committees in the European Parliament for discussion and amendment long before coming even to the plenary session.
I think there is slightly more concern in these paragraphs than justifies the fact that the United Kingdom is always going to be the loser. I think that with the particular Bill and the measures we want we should hope that Britain, at last, will be the winner. The veto will remain, if it is needed, in any case where a unanimous vote is needed. There is, after all, the power to block. Where there is a qualified majority only 23 votes are needed to block a proposal. I am quite certain that Britain, with its very able powers of lobbying, could rustle up 13 votes. It only needs two other countries out of 12 to do that. So that is another way of blocking, if they want to block anything.

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The third way of course is that the Council does not have to take a decision after first reading. There is no time limit so it can go on procrastinating for as long as it likes. I very much hope that, after having given away what is clearly not a professional secret, this right will not be abused, but it is perfectly possible to hold up any proposal that is before the Council for a very considerable period of time. My own view is that the loss of sovereignty is irrelevant to the argument that is before your Lordships' House.
I very much welcome the extension of the two new areas—which of course do not extend the competences of the Community—in the field of environment and research and technology. Environmental matters have already been dealt with under Articles 100 and 235. All that will perhaps happen is that things will be done a little more efficiently and a little more speedily. As your Lordships hardly need to be reminded, clouds cannot be controlled even across the European Community's frontiers. Some of the problems with which we have had to deal, such as acid rain or lead in petrol, are clearly matters which can only be dealt with on a multinational basis and not simply at home. I am thinking also in particular of problems about the transport of toxic waste, nuclear waste disposal and all the problems with which so many people are involved.
With regard to research and technology, as noble Lords will know there is already an excellent report from the Select Committee on the ESPRIT programme. That again was an initiative by the Commission on the development of information technology in the Community, where it is recognised that there is a need for common standards and a need for compatibility of equipment, particularly in the field of electronics. I think that if one wants United Kingdom manufacturing industry to succeed and expand, one cannot but approve of these programmes and proposals.
I should like to say one word about the European Court of Justice, because I know that the noble and learned Lord, Lord Denning, expressed some concern especially about the second court which might be established under Article 140A of the Single European Act. In fact, I think that this is a great tribute to your Lordships' House. Again, I pay tribute to the Select Committee on competition practice, which at the time was chaired by the noble Baroness, Lady White. It was in paragraph 42(j) of the conclusions of that report that it was recommended that an investigation should be made into whether a separate court should be set up to have judicial review over decisions made by the Commission, particularly in the field of competition practice. I think that this is the first time that such a measure has been proposed and I shall certainly very strongly support that particular conclusion, in view of the way that the Commission works in the procedures of competition law.
I think we should welcome most warmly this proposal in the Single European Act, because it will now be possible to set up a tribunal to exercise judicial review in certain classes of cases. It should be pointed out that the provisions of the protocol on the statute of the Court of Justice will apply to this court. It will not be an itinerant group of out-of-work lawyers trotting round the Community, as I think perhaps the noble and learned Lord tried to imply. I very much hope that
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they will be appointed from the senior judiciary of our respective countries and that they will play a useful role in looking at these particular cases, which are very difficult and which take up a lot of the time of the European Court of Justice at present.
Turning to my final point, I am delighted that we shall now be known properly as the European Parliament. I am happy to say that even those who used to call it the Assembly never got so far as calling us MEAs. I think that we were always called MEPs, but I assume that that was because there might have been some confusion with Middle East Airlines or some such body. Anyway, at last we shall officially be known as MEPs. I think that this will be very welcome to our fellow Members.
In conclusion, I should like to say to your Lordships that I have been reminded of a few words spoken by the late President Kennedy, who said: "Change happens through all our lives, but if you spend too much time looking at the past, and indeed the present, you may miss out on the future". It is in that spirit that I warmly commend this Bill and support the Government in hoping that it will pass speedily for the benefit of the United Kingdom and all its citizens.
5.20 p.m.
Lord Hatch of Lusby: My Lords, I apologise to the House for not being able to speak in the order of the list, but I made it clear yesterday through the usual channels that I had an unbreakable appointment at three o'clock. I apologise to the noble Baroness for leaving during the discussion on her Statement, and it may also be that I shall not be here for the whole of the winding-up speech.
I only speak now because, until I heard the noble Lord, Lord Moran, speaking a few minutes ago, I thought that I would be putting a point of view which was unique in this debate. I shall come back in a few minutes to the material which the noble Lord, Lord Moran, put before us, but it is in fact the ammunition from which I shall draw my conclusions, and I am grateful to him for what I thought was a magnificent analysis of the opposite side of the case to that which has been generally put on this Bill today.
I am, and have been, an unashamed opponent of joining the European common market from the days when the noble Lord, Lord Murray of Newhaven, and I were brought in by the late Hugh Gaitskell to advise and discuss on that issue. That was before 1960. I wrote and spoke against our entry during the time of the referendum. Of course that referendum decided the issue, and I accept that decision. However, the reasons that led me to oppose our entry have not disappeared, and while we are members it is up to those of us who hold these different views to try to continue our arguments, not against membership of the Community, but against those factors that arise from membership which led us to oppose that membership in the first place.
I opposed membership for two reasons. The first reason was that I am a Socialist and I feared that membership of the European Community could well lead to inhibiting the Socialist measures which I should like an elected Labour Government to take in this country. I would also say that the same principle applies to Conservative measures. I do not want only

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Socialist measures to be applied, irrespective of the wishes of the electorate of this country; I also in the same way want Conservative measures to be applied when they are supported by the majority of the electorate. In both ways there can be inhibitions and obstacles created by membership of the Community.
I am concerned about quotations which we have heard in this debate from the two Select Committee reports. The noble Baroness, Lady Elles, with whom I crossed swords when we were on opposite sides of the House several years ago, assures us that there will not be a European federal union. I do not know whether there will be or not. But the preamble to the Act declares the will of the signatories,
"to transform relations as a whole among their States into a European union".
I do not know what kind of union, and we have not been told. But I am concerned that this is likely to lead to an invasion of the sovereignty of this Parliament. As the noble Baroness, Lady Llewelyn-Davies of Hastoe, made perfectly clear in a speech of absolute clarity regarding the issues involved, and as is stated in the 12th Report of the Select Committee in paragraph 28:
"The powers of the United Kingdom Parliament will be weakened by the Single European Act".
We must make that clear. The public should know what is being done by Parliament; the public should know that the powers of the British Parliament are being weakened by the Act.
The Nineteenth Report at paragraph 60 states:
"Safeguards are needed to protect the interests of persons or bodies directly affected by Commission proposals and major national interests and in the tradition of democracy to ensure that legislative acts are not delegated to the Executive without reference to a legislative body responsible to the electorate".
We have not been told whether the safeguards which the Select Committee finds are needed are to be instituted.
I said that I had two reasons. The first I have explained: I fear the diminution of the sovereignty of the British Parliament. The second reason is connected to the first. All the way through the argument over the past 25 years we have heard that those who believe in joining the Community are internationalist and those who oppose it are nationalist. That is not the case. I hold to a different internationalism from that which allies us to a small part of the world.
It is not even a European Community; it is a partial European Community. Nor are our historic, personal and commercial ties simply with Europe. This is where I come to the excellent ammunition provided by the noble Lord, Lord Moran. That has been supplemented by the revelations during the year in which I served on the Select Committee on Overseas Trade. The manufacturers of this country are concentrating far too much on trying to penetrate the European market—the market of our major competitors—and neglecting the closed markets of other parts of the world which we should be opening.
That is my major case. My form of internationalism is not to connect ourselves with and to dig ourselves deeper and deeper into a small, white, rich and industrialised section of the world's population, thereby neglecting the opportunities which are open to
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us now and which could be used at least to help the recovery of our manufacturing and industrial sectors. There is the question of exchange controls, for instance; the amount of capital that is drawn to Europe. The noble Lord, Lord Moran, pointed out the imbalance in trade between this country and the European Community.
In our work in the Select Committee we were shown time after time that, whereas that imbalance with our major competitors was growing, the opportunities in the poorer—the developing—world were being neglected. I agree completely with the noble Baroness if she says that our manufacturers should improve their marketing, have better management and do more to develop our exports, but we should not concentrate solely on Western Europe and America. Of course that will continue, but there are other opportunities for revival and I believe that the opportunities in the developing world are being neglected and in many cases hindered by our continued obsession with the EC.
I have seen—this was one of the reasons why I was opposed to membership in the first place—the way in which the EC before we joined it, particularly the French, exploited the power of the EC in, for example, the Ivory Coast where after independence the number of Frenchmen tripled and the outgoing of capital to France more than doubled. That is a prescription for exploitation.
My worries about the Bill have been expressed by the noble Baroness, Lady Llewelyn-Davies. She clearly brought to our attention the fact that the Bill reduces the sovereignty of the British Parliament. That point was also brought to our attention by the noble Lord, Lord Moran, who pointed out the economic effects of the concentration of the building up of the power of the EC and our subservience within the EC. For those reasons, I believe this is a bad Bill. It is bad for the British people and above all for this country's future economic development.
5.32 p.m.
Lord Walston: My Lords, much of what the noble Lord, Lord Hatch of Lusby, said tempts me to enter into arguments with him, but I agree with a certain amount of what he said. I shall restrict myself to one point. I share with him a worry that our manufacturers are not looking sufficiently to distant countries, in particular the third world, for their markets and have concentrated too much on Europe, important though that market is. I cannot for the life of me see how the Bill in any way affects that problem. I hope that it will be overcome by the manufacturers themselves. I am sure that your Lordships will agree with me that it will not be exacerbated in any way by the Bill.
The noble Baroness, Lady Young, rightly reminded us that many changes have taken place in Europe during the 30 years since the Treaty of Rome was established and the founding fathers laid down the guidelines for us to follow. For all that, the need for Europe is as great as ever it was. I would say that it is greater. The world needs a strong European voice. The events in South Africa today surely demonstrate that. The fact that the voice is not strong enough is no argument against doing what one can to strengthen it, particularly if the voice is reinforced, as it should be,

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and I hope increasingly in the future will be, by this country's voice speaking with the authority of one of the senior members of the Commonwealth.
When the Community was started, in the minds of many people, particularly those who had experience of and lived through two world wars, one of the main arguments in its favour was the hope that it would diminish and eventually abolish the threat of yet further armed conflict—a further world war—among the countries of Western Europe. I think one can safely say that that threat has disappeared. It is inconceivable that any of the members of the European Community should, in the foreseeable future, go to war with one another.
Despite the fact that that threat has disappeared, the need for a strong European voice is greater than it ever has been. We need it in two ways. We need it for our economic wellbeing and in our foreign policy. We must have a European economic policy. We must have a European foreign policy. No single European country today is large enough to speak with authority in the world councils. At the moment the gap is open for us and the voices that are heard are those of the United States and the Soviet Union. No matter how close our relations are and how much agreement we may have with the United States, there are few people who would deny the fact that the European experience in foreign affairs is far greater than that of the United States and far more rational and helpful in the cause of world peace than if these vitally important matters were left solely to the two super powers.
From the economic point of view—the noble Earl, Lord Bessborough, among others, mentioned it—the companies of single countries in Europe are not big enough to afford the vast amount of expenditure that is needed in research and development, let alone in production and in the marketing of their products. The closer we can be integrated throughout Western Europe the stronger will our economic position be. With 300 million people or more, as we are at the present, there is no reason why we should not be an economic and political giant equal in every respect to the United States and the Soviet Union.
This Bill helps in this general process. It is not a great help—nobody pretends that it is an earth-shattering Bill—but it helps us along this path of closer European integration. But we must remember that the Bill alone cannot succeed. There must also be the will to create this form of Europe. There must also be the leadership to make that possible. Here, this country has failed. No other country has come forward to take our place. There is therefore still room for us to take that lead. It is not too late for us. I sincerely hope that during the next few months of our presidency, and in the years thereafter—because when one is not president one can exert a very substantial influence—we shall take the initiative and be the protagonists of a genuine reform, for instance, of a common agricultural policy. That would not be solely for the sake of saving money within the Community, nor for the sake of the farmers and the taxpayers, but above all for the sake of world trade and the impending trade war threatening from the United States.
Other noble Lords have mentioned this point. Let us show by our deeds as well as our words that we are
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increasingly European by joining the European monetary system. These are steps we should be taking, and I hope we shall take them. This Bill gives us some small opportunity for doing it. It is good that the European Parliament is being given a little more power. It is only a very little more power, but it is slowly moving along the road of transition from a purely consultative assembly to what eventually may emerge, with many restrictions and hedged around with safeguards, into something more approaching a legislative body. That process must be slow—it will take many generations—as in this country and all countries which now enjoy parliamentary government the process has been slow. However, we must move in the right direction, and that is what the Bill is helping us to do.
In that context, we must remember—and I have a feeling that some noble Lords who have spoken today tend to forget this—that, despite the fine talk about the supremacy of Parliament in this country, Parliament is not and cannot be supreme. Inevitaby, because we live in a world which knows no boundaries of countries, we are inhibited by economic affairs over which we have no control and the economic policies of other countries. One does not have to go back very far to previous Labour Governments to realise that we were unable to do the things that we wanted to do because of financial restraints imposed not in our own country but from outside.
As regards military matters, we cannot stand on our own. The British Empire no longer exists. The thin red line is no longer the sole bulwark. We now live in a world where we must collaborate with other countries as regards our defence as well as our economy.
Lord Bruce of Donington: My Lords, before the noble Lord leaves that point, will he explain to the House what assistance the European Community was to the United Kingdom in the course of the Falklands campaign?
Lord Walston: My Lords, most people already know the answer to that question. I shall not be led astray into discussing the Falklands campaign or the part played by the European Community, although it did give us a certain amount of assistance in agreeing to sanctions against the Argentine.
The point which I am trying to make is that in this country Parliament and the Government are not, and cannot be, independent of the effects of what is taking place in the outside world. Therefore, when we say that we are to surrender some of our sovereignty, we must remember that we do not enjoy the absolute sovereignty which some people who prefer to live rather more in the past think that we enjoy. I suggest to your Lordships that if as a member of the European Community, we show the right form of leadership and the right form of enthusiasm for the concept of a united Europe, we shall have far more influence and be in a far better position to control some of the outside influences than we would be if we were seen to be dragging our feet and remaining outside.
I turn to more practical and immediate considerations. There has been considerable talk about certain matters and select committees, having looked at them with a great deal of care, have come up

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with some valuable suggestions. There is a great problem which faces the Community and all governments; namely, to hold the correct balance between efficiency and what one can call democratic consultation. If we want quick decisions and efficiency, then consultations must be kept to a minimum and we must override the wishes of many people—minorities and even, perhaps, majorities at times. On the other hand, if we have full consultation so that every possible point of view is taken into consideration, matters can drag on, as we have seen and as the noble Baroness Lady Elles, mentioned, for 14, 15 or 16 years before decisions are taken.
On the whole, the proposals before us at present will speed up some of the decision-making and will give reasonable scope for proper democratic consultation. In particular, I would refer your Lordships to a small suggestion in paragraph 66 of the report dealing with the delegation of powers to the Commission. It puts forward a very important suggestion; that is, that Parliament should be able to exercise some scrutiny over the delegated legislation while in draft, rather than waiting until it has passed beyond the draft stage. In this type of consultation the balance between efficiency and speed and democratic control is something that must be watched continually, and is obviously something that changes from time to time.
There is one matter which was touched on by the noble Lord, Lord Beloff. My noble friend Lord Gladwyn, had he been able to speak, would have mentioned it, and I too feel strongly about it; it is the need to have far closer contact than we have at the present time with members of the European Parliament. It is nothing short of ridiculous that we have members of the European Parliament who have no rights of access to this place unless they happen, by chance—and fortunately some of them are—to be Members of your Lordships' House. We have no formal means of contact with them and rely solely on chance meetings, and possibly personal friendships. We must evolve some means by which at least the British members of the European Parliament can be brought into far closer contact with members of both Houses in this country.
There is little more that I can say. All the points that should have been raised have been raised, and raised eloquently by other noble Lords. I would say no more than that we, on these Benches, strongly support this Bill as it is presented to us, and urge the Government to act on some of the points—particularly those that I have mentioned—which are raised in these two admirable reports, and which have been raised by noble Lords on both sides of the House during the course of this debate.
5.47 p.m.
Lord Silkin of Dulwich: My Lords, I hope it will not be thought in any way impertinent of me if I congrat-ulate those noble Lords who have stayed the course on this long debate on their stamina, which I hope not to impose on too greatly. In particular may I congratulate the noble Baroness, Lady Young, who has certainly had an extremely hard day today. She shows no sign of strain as yet—but who knows what may happen in the next ten minutes or so.
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Unlike my noble friend Lord Hatch of Lusby, I am not an opponent of British membership of the Community. I think I never have been. But like the noble Lord, Lord Beloff, I regard all that as very much water under the bridge. To use his phrase, the die is now cast. Today we are considering not whether we should be members, or whether we should extend the membership, but whether the Bill before the House is a sensible way of making the Community work to the benefit of ourselves and other members, and also of course the effect of the Single European Act.
Perhaps I may begin by dealing with that part of the Single European Act which is not embodied in the legislation, as the Bill before the House seeks to give national effect to those parts of the Act which relate to the Communities. It does not give effect to those parts which concern co-operation in the sphere of foreign policy. At first sight that might be seen to be surprising, because the sphere of foreign policy was seen by the signatories of the Single European Act as an essential part of the concept of European Union. The preamble declared the member states to be resolved to invest that union with "the necessary means of action".
It is plain, therefore, that the Government do not see co-operation in foreign policy as a sphere which can at this time be embodied in our national law. That cautious view—which was expressed also by Mr. Geoffrey Rippon who was quoted in that sense earlier in the debate, and I agree with him—must surely be the right view. The necessary means of action for implementing European union in the sphere of foreign policy must be found, I believe, not in qualified majorities but in agreement, as and when that can be achieved. Title III of the Single European Act is permeated with gradualism. The noble Lord, Lord Banks, spoke of it as being something of an anticlimax. That no doubt was what we had in mind.
To that gradualism perhaps the most striking contribution is the phrase in the Act itself that member states are asked as far as possible to refrain from impeding the formation of a consensus. It seems to me that that phrase is a striking illustration of the fact that, despite the fine words of the preamble, the member states do not expect to proceed too fast in this direction and realise the many difficulties involved. That does not take us very far from the policy of what one might call the lowest common denominator, which I believe has been clearly demonstrated by the nakedness of our own Foreign Secretary at the South African negotiating table. I do not criticise high aspirations so long as they do not lead us, as I believe on this occasion they may have, into impossible positions, or those which are damaging to our standing in the Commonwealth, as without doubt was also the case on this occasion.
I believe it would be wise and sensible to accept that full European union will not come simply by willing it; it will come when Europe is ready for it. That will not be before the integration, which has always been the principal aim of the Economic Community, has been achieved. We are still a long way from its full achievement, but at least the Single European Act—by looking towards the areas of social policy, by emphasising the need for social as well as economic cohesion and by encouraging the search for technological development to which the noble Earl,

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Lord Bessborough, and others drew attention—is looking in the right direction. From these Benches we shall be watching to see how our own Government repond to the direction made to encourage improvement in the working environment and the aims of reducing regional disparities and restructuring regions of declining industry. Those are admirable aims which deserve full support and enthusiastic implementation. We shall expect the Government to pay more than mere lip service to those aims and to give them priority over any preconceived dogmatisms.
The Bill before the House is intended to incorporate into law the procedures in the Single European Act for furthering those aims and for completing the internal European market. That, as everybody so far has agreed, taken by itself, never mind the implications between the pro-marketeers and the anti-marketeers, is a most important objective which has been too slow in arriving. For myself, while I hope that the year 1992 may be realistic, I wonder whether in practice so short a time is realistic. The Bill has now passed through the elected House so that it certainly would be wrong to deny it a Second Reading in this House. It is an important constitutional Bill. The noble and learned Lord, Lord Denning, has drawn particular attention to that. But we are entitled to consider the timing of this Bill and to ask the Minister why it is necessary to bring it forward now rather than during the next Session of this Parliament.
From all sides of the House, doubts and anxieties have been expressed with regard to the procedure of the safeguards. My noble friend Lady Llewelyn-Davies expressed the doubt of the Select Committee about the value hereafter of the veto; and the noble Baroness, Lady Elles, and the noble Lord, Lord Bethell, I think, coming to give their experience and views from Strasbourg, have stressed the importance of the safeguards that are needed, not merely for national parliaments but for the European Parliament as well.
Indeed, we must have regard to the fact that the procedures which this legislation is intended to simplify and to speed up affect a number of groups of parties—the council, the Commission, the European Parliament and the national parliaments, all of which, quite rightly, require to be consulted at the different stages of the process of Community legislation, and especially now that the Single European Act has in many areas increased the scope of qualified-majority decisions of the Council.
In order to operate the system, the Single European Act already involves a complex system for promulgating subordinate European legislation. So complex is it, indeed, that the Commission has proposed procedures for giving effect to that system. Those procedures are, if anything, even more complex. Your Lordships' European Select Committee—and we heard with great pleasure the clear views expressed by the noble and learned Lord, Lord Templeman—has expressed the firm view that safeguards are needed to protect the interests of those affected by future subordinate legislation of the Community. It has also asserted the democratic principle that legislative acts should not be delegated to the Executive, in this case the European Executive, without reference to a legislative body responsible to the electorate.
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Whether those principles will be followed cannot be assured until the Council has pronounced upon the Commission's proposals. Until then, we cannot be certain that we are not committed to a procedure which fails to meet the legitimate objectives or provide the reasonable safeguards described by your Lordships' Select Committee. That committee, although giving high priority to this work, has not yet had time to study the desirability and adequacy of consultation, either with the European Parliament or with interested bodies. Its final report will deal with those issues.
The noble and learned Lord, Lord Templeman, referred among other things in particular to the proposal of the Select Committee that there should be a right of appeal to the Council with a strict timetable. He also referred to problems in respect of scrutiny by national parliaments and the proposals for easing them.
Those are matters that need to be very carefully examined, and again I ask why it is necessary for us to bind ourselves to this legislation until the final word has been spoken on those matters. If we bind ourselves by law to accept the SEA, then it seems to me that we bind ourselves to accept also whatever procedures the Council may ultimately lay down after considering the Commission's proposals. That, I should have thought, is abandoning a valuable negotiating weapon.
It makes one wonder how valuable the study entrusted to the Select Committee is going to be in practice. I accept of course, as the noble Baroness, Lady Elles, and others have told us, that the views of this House are held very high by the European Parliament. But the negotiating weapon, as I see it, is the ability to defer ratification of the Single European Act and to defer its incorporation into our law until we are fully satisfied that the procedures contain adequate safeguards.
For my part, I cannot see what disadvantage it would be to us or to the Community generally if we were to take that course. I do not see, in other words, why a decision in principle one way or the other has to be made today. I do not know why it cannot wait a matter of a few months until we can be satisfied—that is, until the proposed implementing Community legislation has been fully scrutinised by Parliament and we know precisely what it is proposed to incorpo-rate into Community law. I hope that if there are reasons the Minister will explain them, because clearly if we are not satisfied that those reasons are good ones then we from these Benches must reserve the right to put down amendments at a later stage, which would defer the date of commencement until after Parliament has scrutinised and accepted the full procedures for delegated Community legislation.
The preamble to the Single European Act speaks of the need to work for the promotion of democracy and for new developments to correspond to the wishes of the democratic peoples of Europe. We applaud and echo those sentiments. We cannot accept that they should be pronounced only to be discarded.
6.3 p.m.
Baroness Young: My Lords, we have had the kind of debate today for which this House has a well-deserved

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reputation—a debate in which your Lordships have both sought and given information. The debate, I believe, represents a serious assessment of the importance of this Act, and your Lordships without direct experience of the Community will be better able, I believe, as a result of this debate to judge this measure and its importance.
I should like to start by paying tribute to the noble Baroness, Lady Llwelyn-Davies of Hastoe, not only for her intervention in the debate today but for the work she has done as chairman of the European Select Committee and on the reports which we have all studied with interest. We all recognise the value of those reports, not only in your Lordships' House and in another place but also in Europe itself. I should also like to say to the noble and learned Lord, Lord Templeman, that we all listened to him with great interest and, I am sure, with admiration for the clarity with which he spoke. We have studied with interest his report and I shall later comment in detail.
I should also like to apologise to those noble Lords whose speeches I missed because of the somewhat complex afternoon I have had. I shall of course read in full in Hansard what they had to say. But I was very glad to know that support has been given to this measure by the noble Baroness, Lady Ewart-Biggs, and by my noble friends Lord Bessborough, Lord Broxbourne and Lord Nugent. Indeed, there is a widespread feeling in the House that it is essential to our interests to make a success of our membership of the Community. I was very struck with the way in which this point was put, first by the noble Lord, Lord Banks, and later by the noble Lord, Lord Beloff, and my noble friend Lady Elles. There is also a proper concern to know what the effect will be on this House of the agreements negotiated by my right honourable friend the Prime Minister at Luxembourg last year. I shall turn to those later in my remarks.
But may I say to the noble and learned Lord, Lord Silkin, on the matter of timing which he raised, that all member states have agreed to ratify the Bill by the end of the year and it really is in our interests to do so as well. Furthermore, I believe that your Lordships will recognise, particularly while we hold the presidency of the Council, that it would be only right that we should ratify this Bill at the time when the Community would like us to do so. It was my noble friends Lord Bethell and Lady Elles, both of whom spoke as Members of the European Parliament and from a very great deal of personal experience, who pointed out that some of the speeches made today have a certain air of déjà vu about them.
I should like to begin by dealing with the points that have been raised, because I believe that they are not strictly relevant to the Bill. I hope that when we come to later stages of the Bill we really will concentrate ourselves on what it is doing, rather than on fighting battles which were fought 15 years ago and should by now have been settled. I myself beg to differ from the noble and learned Lord, Lord Denning, that the Community we joined was just about economic unity. The noble and learned Lord cited the preamble to the Treaty of Rome. Let me quote it:
"Determined to lay the foundations of ever closer union among the peoples of Europe".
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That is the very first recital. Again,
"Resolve by thus pooling their resources to preserve and strengthen peace and liberty".
That is the final recital. So the Treaty of Rome is not just about economic issues.
The Single European Act speaks about,
"making concrete progress towards European unity".
The preamble refers to,
"European union being achieved in accordance with the solemn declaration of Stuttgart of 19th June 1983".
That declaration, in turn, referred to European union as being achieved,
"by deepening and broadening the scope of European treaties, so that they coherently cover, albeit on a variety of legal bases, a growing proportion of member states' mutual relations and of their external relations".
In other words, we are talking about practical, pragmatic steps in co-operation with other member states—a phrase which I think the noble and learned Lord, Lord Silkin, almost used; at any rate, I think he expressed that sentiment—not steps towards federal union.
The noble and learned Lord implied that what has happened in the last 14 years was not what we expected when we joined. He cited as one example a recent case where a provision of our domestic law relating to pensions was held by the European Court to be inconsistent with the Council's directive. As Article 189 of the treaty makes clear,
"a Directive shall be binding as to the result to be achieved upon each member state to which it is addressed".
It is our responsibility to ensure that our domestic law is consistent with Community law. It is the European Court's responsibility to ensure, in the words of Article 164 of the treaty, that,
"In the interpretation and application of the Treaty the law is observed".
In this case, the Court concluded that our legislation was not consistent with that directive. The Court's powers in this respect derive from the original Community treaty. This power of review is not affected by the Single European Act.
I must confess that I was quite surprised by the speech of the noble Lord, Lord Moran. I was surprised that he, as a distinguished member of the Diplomatic Service, with wide experience of international life, should set so little store upon the role which the Community has played in strengthening democracy in countries like Spain and Portugal, and of the importance to us and to our security of strong democracies in those countries. I have already, in reply to the noble and learned Lord, Lord Denning, said what is entailed by references to European unity in the Single European Act. The fact that my right honourable friend the Prime Minister, who is rightly sceptical of federalist concepts, agreed to the language which features in the Single European Act, reflects the fact that she was satisfied that there is no question of moving forward to a United States of Europe.
The noble Lord, Lord Bruce of Donington, raised a number of questions to which he has asked me to reply. He asked me to explain what safeguards for British interests had been secured in the Single European Act. First, we have retained unanimity in 27 of the 32 articles for which unanimity is provided

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under the existing treaty provisions. Secondly, where standards are henceforth to be determined by qualified majority voting, we have the specific right to retain or introduce national measures to safeguard human, animal and plant health. This is an important safeguard for an island nation like ours, which is free of rabies and other serious animal diseases. Thirdly, the Luxembourg Compromise is, as I have said before, unchanged.
I agree with the noble Baroness, Lady Llewelyn-Davies, that the Luxembourg Compromise should be the last resort. There is no point in having majority voting and then preventing its use. But as I told the noble Lord, Lord Bruce, in the letter from which he quoted, the Luxembourg Compromise and the political reality which underlies it are a strong incentive for the Council to work for consensus and to ensure that decisions are not taken prematurely, particularly when very important interests are at stake.
The noble Lord, Lord Bruce, also referred to the delegation of implementing powers to the Commission and feared that our interests were inadequately safeguarded under what is now proposed. As the noble and learned Lord, Lord Templeman, pointed out, it would be for the Council to decide by unanimity what new arrangements to institute. That is one safeguard. What the Commission are proposing is a rationalisation of existing procedures. There is nothing new in the delegation of powers of the Commission, but under the Single European Act it will be for the Council to decide in each case, when it adopts legislation, whether to delegate powers to the Commission or whether to retain such powers to itself.
The noble Lord also drew attention to proceedings against the United Kingdom in the European Court over some of the areas where we currently apply zero rates of VAT. As my noble friend Lady Elles pointed out, the Commission are challenging our interpretation of a directive which was adopted by unanimity and to which we therefore, by definition, gave our consent. As the noble Lord pointed out, we are fighting the case vigorously in the European Court. I must stress that it pre-dates the article in the Single European Act dealing with tax approximation and is not in any way affected by it. The point about Article 99 in the Single European Act which deals with indirect taxation that the provision requiring unanimous consent to tax measures is retained.
The noble Lord suggested that the questions raised by this Bill are appropriate for discussion by a Speaker's Conference. My Lords, such conferences are normally held to consider questions of electoral reform such as the franchise, the distribution of seats, proportional representation or the conduct of elections. The present Bill is in a different field, and I do not see that it would be appropriate for it to be discussed at such conference.
My Lords, the changes implicit in the Single European Act will have implications for scrutiny. The noble Baroness, Lady Llewelyn-Davies, explained to the House the recommendations of the European Communities. I can assure the House that the Government are ready to adopt procedures to help
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meet the requirements which the committee describes. The Government have already made clear in another place that they accept those recommendations in your Lordships' Committee's report which coincide with those made earlier by the other scrutiny committee.
These are: first, that explanatory memoranda accompanying proposals for Community legislation should identify measures subject to the new co-operation procedure between the Council of Ministers and the European Parliament. Second, that departments should be on the alert to pick up anything which occurs after submission of an original explanatory memorandum and which might make it desirable to issue a supplementary memorandum.
On the first point, I can confirm that as soon as the Single European Act comes into force the Government will ensure that the explanatory memorandum identifies, first, the treaty power relied on for the particular proposal; secondly, the procedure which applies, and in particular whether or not the new co-operation procedure will apply; and, thirdly, the voting procedure applicable. On the second point—the submission of supplementary memoranda —the European Legislation Committee in another place recommended, and your Lordships' Committee has agreed, that the criterion should be that subsequent events could materially affect the Select Committee's report on an original Commission proposal.
The Government have already indicated that we are happy to operate on that basis. If the committee recommends further debate before final adoption of the measure the Government will of course endeavour to meet that request. But as the scrutiny committee itself pointed out, it will be necessary to meet the time limits laid down for the co-operation procedure. If Ministers need to give their agreement to a proposal before a further debate has taken place, then Ministers, in accordance with normal practice, will of course inform the House as soon as possible thereafter of their reasons for doing so.
As the Select Committee of another place recognised, we shall need to see how the Single European Act works out in practice before deciding on what precise further changes in scrutiny procedures may be necessary. Meanwhile, I hope that what I have said demonstrates the Government's willingness to improve scrutiny procedures and to revise them as necessary in the light of the workings of the Single European Act.
The noble Baroness, Lady Llewelyn-Davies, also referred to the recommendation of the committee that its reports should be made known to the European Parliament and the Commission. I can assure the noble Baroness that these reports are already widely read in Europe and that the Government already take steps to ensure that they are drawn to the attention of the Commission. I have no doubt that your Lordships' Committee will wish to make its opinion known to the Commission and to the European Parliament, but the Government will be willing to co-operate in any way that would be helpful.
I should like to turn to the report of the committee under the noble and learned Lord, Lord Templeman. As the committee's report explains, the Council has

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frequently conferred implementing powers on the Commission in the past but has in each case devised an ad hoc structure under which these implementing powers were to be exercised. This was cumbersome and time-consuming. Simplification of this process was long overdue. What is needed is a set of clear models which will adequately and flexibly cover the whole range of subject areas within which the Commission exercises its delegated powers.
The Government welcome the opportunity presented by this Commission proposal to save the Council's work and time in future. I should, however, emphasise that as at present it will be open to the Council under Article 10 of the Single European Act to reserve implementing powers to itself. It remains entirely up to the Council to decide whether or not to delegate implementing powers to the Commission. In general, it will. The efficient running of the Community depends on the assignment to the Commission of the responsibility for detailed implementation within the policy framework laid down by the Council, as the Select Committee's report on European union recognised last year.
It is too early to say exactly what framework for the exercise of the Commission's implementing powers will emerge from the Council's consideration of the Commission's proposal. The Council needs enough flexibility to cover the most sensitive as well as less sensitive issues. Care will be taken to examine current practice to ensure that its best features are retained in the new arrangements. At this stage, it is also too early to reach firm conclusions on any changes in the arrangements for scrutiny of Commission proposals made in the context of the exercise of implementing powers, but I should draw your Lordships' attention to the fact that the present Commission proposal does not imply any fundamental change in the nature of management or regulatory committees. The Government are of course ready to consider improvements in the scrutiny procedures, as I have already indicated in this debate.
I have already indicated that I was sorry not to hear the speech of my noble friend Lord Broxbourne. I understand his concern about the European Parliament, and in particular that the new co-operation procedure will complicate the process of decision taking and will detract from the powers of this House. I hope that I may reassure my noble friend. The European Parliament is an important institution in the Community. Directly elected, it represents more than 300 million people. It is right that their voices should be heard collectively. The Parliament is already consulted on most of the important measures that come before the Council for decision. The new procedure will give the European Parliament greater opportunity to play a constructive role in that process. However, there is no way that the European Parliament can force its views on the Council of Ministers.
Most of the fears about the way in which the new co-operation procedure might work reflect a misconception. They fail to take account of the fact that it will apply primarily to measures connected with the creation of the internal market, where the Parliament strongly supports action of the kind that we wish to see. Such fears fail to take account also of
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the fact that the European Parliament can only vote amendments by an absolute majority of all its members. They fail to take account of the fact that the new procedure is based on existing practice.
The idea that the Commission will always feel obliged to accept amendments proposed by the European Parliament is not borne out by existing practice. At present, where the European Parliament is consulted and makes suggestions, sometimes the Commission accepts those suggestions and incorporates them in its own proposals. Sometimes it does not. I see no reason for that to change.
Let us not forget that we are talking also about an area where the Commission, like the majority of member states, is keen to see progress. No proposal can pass in the Council unless it commands a qualified majority. To command such a majority in the Council, any proposal that the Commission revises on the advice of the European Parliament will have to bear a very close resemblance to the proposal on which the Council will already have formed a view at an earlier stage. The position of Parliament at Westminster will be fully protected by our scrutiny procedures and by the revised scrutiny procedures that we are ready to introduce to reflect the changes in the Single European Act.
My noble friends, Lady Elles and Lord Bethell, both raised the possibility of the view of British MEPs being reflected in the scrutiny procedures of Parliament at Westminster. I am sure that your Lordships' committee and the committee in another place will wish to reflect carefully on that suggestion. I am sure that it would be helpful for maximum informal contact to take place between those in both Houses with an interest in these matters and those who represent British interests in the European Parliament. However, my noble friend Lord Bethell will be aware of the political and practical difficulties that stand in the way of any more formal an arrangement. I was interested in the point made by my noble friend Lord Beloff, which was picked up by the noble Lord. Lord Walston, about how much more valuable it would be if there were some means of Members of the European Parliament being in closer contact with Members of another place and of your Lordships' House.
The noble Lord, Lord Bruce, referred to the Community's budget. He suggested that we had tried to veto this year's budget, but that is not so. First, it is worth recalling that the agreement we negotiated at Fontainebleau has been paying handsome dividends. On top of the 600 million abatement that we received last year, we shall receive a further 1,200 million this year. We are thus making only our fair contribution to the Community budget; only one-third of that of West Germany and on a par with that of France.
Secondly, the recently-agreed revisions to the 1986 budget will not cost the United Kingdom anything. In fact, we shall be a major beneficiary, not only from an increase in our abatement but also from additional provision on the regional and social funds. Our VAT rate has actually been reduced to 0.68 per cent. so although the overall ceiling was increased to 1.4 per cent. at the start of the year, we are contributing at under 1 per cent. There can be no better illustration of the value of the Fontainebleau system.

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To conclude, it is 14 years since this Parliament decided that the interests of Britain lay in membership of the European Community. That decision was confirmed in a referendum by the electorate 10 years ago. It has been confirmed in every general election throughout that time. We took that decision because we recognised that our national interest required us to co-operate with like-minded member states; that the preservation of peace and democracy could be achieved only as part of the community of nations; and that membership of Spain and Portugal is a vivid testimony to that fact.
Some may carp about the trade impact of Spanish and Portuguese membership. That is as nothing compared with the benefits of securing democracy in those two countries. We would have a right to be truly worried if, instead of democratic governments, there were Marxist governments in Madrid and Lisbon.
A Noble Lord: Or Fascist.
Baroness Young: Yes, my Lords, or Fascist. We also recognised 14 years ago that our economic interest lay in Europe. Membership of the Community is not an easy answer to our economic problems. It does not shield us from the need to be competitive. It does not shield us from the need to follow policies which lead to sound inflation-free growth; nor free us from the need to moderate pay settlements and improve productivity. Those are the realities of life that will be with us whether or not we are in the European Community.
If we were not in the Community, the decisions which we take now with other member states would be taken without us. Eleven powerful European countries would be deciding the conditions of trade in Europe; 11 powerful countries would be deciding the standards to which our car manufacturers would have to comply if they wanted to sell their cars beyond our shores; 11 countries would be negotiating with Japan and the United States on the conditions of trade that would give them an advantage which would not be open to us; and 11 powerful European countries would be concerting their position on foreign policy issues, and we would have no part of that.
Fourteen years of membership of the Community have confirmed the wisdom of the choice that we made. We joined the Community late. We joined a community that had been shaped by others, and now that is changing. We are playing a leading role in shaping the Community of tomorrow. We negotiated at Fontainebleau in 1984 a significant reform of the Community budget which has put our contribution on a fair basis. We have started down the road of reform on the common agricultural policy. That reform is vital, but it is not an end in itself. Reform must open up the possibility of doing new things, undertaking new policies; and that is what the Single European Act achieves.
It gives us the means to achieve the internal market in goods and services which has been our major objective since we joined the Community. It gives us the means to compete with the United States and Japan, and to establish a common voice in foreign policy with our partners.
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This House is right to be concerned about its powers and prerogatives. Yet this House's greatest prerogative, its greatest privilege, is to represent the interests of the British people. I believe those interests are represented in the Single European Act. For all its technical complexity it enshrines practical reforms for which we have long campaigned. The majority of the people in this country want us to get on with the job of making a success of membership of the Community. They will be looking to us to enact this Bill. I hope that your Lordships will give a clear signal today that that is exactly what we intend to do.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Single European Act: ECC Report
Baroness Llewelyn-Davies of Hastoe: My Lords, I beg to move that this House takes note of the Report of the European Communities Committee on the Single European Act and Parliamentary Scrutiny in the House of Lords (12th Report, 1985-86, H.L. 149).
Moved accordingly, and, on Question, Motion agreed to.

Adjournment
Lord Denham: My Lords, in moving the adjourn-ment of the House I should like on behalf of my noble friends to wish all noble Lords of the Official Opposition, those on the Alliance Benches and those on the Cross-Benches a very pleasant, enjoyable and restful Recess.
After an exceptionally heavy June and July, I particularly thank all other people who work at this end of the Palace of Westminster. In the circumstances I shall not say that they have worked untiringly but certainly they have worked uncomplainingly and always cheerfully to promote the efficiency, safety, comfort and refreshment of Members of your Lordships' House. I think that we owe them a very great debt indeed.
Lord Ponsonby of Shulbrede: My Lords, I should like to associate those on this side of the House with the remarks of the Chief Whip, and the best wishes which he has expressed to the staff, the attendants, the security staff, the refreshment department staff both upstairs and downstairs. I think especially thanks are due this year to the Hansard staff who have worked particularly long hours and even up to the early hours of this morning, working longer than they ought to according to their contract.
It is salutary to recall that during the past year up to last Friday we have sat on 32 occasions more than we did last year. This means that members of staff who are tied to our hours will have found themselves with over 50 per cent. more late duties than last year. We very much appreciate the good grace and good humour with which they have borne these extra duties. For us these hours are self-inflicted; for the staff they

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are a burden for which they did not bargain when they came here. We extend extra special good wishes for a restful and reinvigorating Recess to all members of the staff and I join with other noble Lords in extending our best wishes to them.
Lord Tordoff: My Lords, from these Benches may I echo the words which have already been spoken? In doing so I should like to add to them the name of my noble friend Lord Kilmarnock, who sends his apologies for not being here but who asked me to join his name to the words that I intended to say.
It has been a long and hard Session. We have now come to the end of the political clash and I think it is proper that we should spend just a few moments offering good wishes to each other. There have been triumphs and tragedies and there have been important decisions made, and not merely political decisions. There was, for instance, the decision that we took to invite the television cameras to remain in your Lordships' House. That was an historic decision and we should not forget it at the end of the Session.
Like the noble Lords, Lord Ponsonby and Lord Denham, we certainly wish to be associated with the good wishes and thanks to the staff—and not merely those staff in the Chamber or the refreshment departments but also the people who look after the committees of this House and who play an extremely important and valuable role. Their work is sometimes not appreciated outside your Lordships' House.
We have now come to the end of a very hard Session and we can go away and come back reinvigorated. I wish all noble Lords in the House a very happy holiday.
Baroness Hylton-Foster: My Lords, we on the Cross-Benches would also like to extend our thanks to all the staff for their kindness and courtesy during this long and rather difficult period. We should also like to join in wishing them and everybody a happy and peaceful Recess.

York City Council Bill [H.L.]
The Queen's Consent signified; Bill reported from the Unopposed Bill Committee with amendments.

Mid Glamorgan County Council Bill [H.L.]
The Queen's Consent signified; Bill reported from the Unopposed Bill Committee with amendments.
House adjourned for the Summer Recess at twenty-seven minutes before seven o'clock until Monday, 6th October next.