HL Deb 31 July 1986 vol 479 cc1046-88

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.

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 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 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 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.

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 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 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 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 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 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 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 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.

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, "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 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. 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? 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 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. 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 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 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.

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 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 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 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, 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 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 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.

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, 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.

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 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". 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 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 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 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 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.

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.

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.