HL Deb 11 December 1991 vol 533 cc772-86

5.24 p.m.

Lord Waddington

My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Prime Minister on the European Council in Maastricht. The Statement is as follows:

"With permission, Mr. Speaker, I should like to make a Statement on the European Council in Maastricht which I attended with my right honourable friends the Foreign Secretary and the Chancellor of the Exchequer.

"The European Council has reached agreement on a treaty on European union. The relevant texts have been deposited along with the Presidency conclusions. The House will be invited to debate the outcome next week.

"Let me set out for the House the main provisions of the agreements we reached. The treaty covers economic and monetary union and political union. It follows the structure for which the United Kingdom has consistently argued. The treaty creates a new legal framework for co-operation between member states in foreign and security policy and in the fight against international crime. That co-operation will take place on an inter governmental basis outside the Treaty of Rome. That means that the Commission will not have the sole right of initiative and the European Court will have no jurisdiction.

On defence, we have agreed a framework for co-operation in which the primacy of the Atlantic Alliance has been confirmed and the role of the Western European Union has been enhanced.

"As the House knows, there was strong pressure over many months for all aspects of co-operation to come within European Community competence. That was not acceptable to this country. Instead, an alternative route to European co-operation has been opened up. I believe that this will be seen as an increasingly significant development as the Community opens its doors to new members, and more flexible structures are required.

"I turn now to the main features of the text. The treaty provides for the possibility that member states will wish to adopt a single currency later this decade. But they can only do so if they meet strict convergence conditions—conditions for which the British Government have pressed from the outset. These cover inflation, budget deficits, exchange rate stability and long-term interest rates.

"A single currency may come into being in 1997, but only if a minimum of seven countries meet the convergence conditions, and eight out of the Twelve vote in favour. The treaty lays down that a single currency will come into being by 1999 but only if those convergence conditions are met and only for those countries which meet them. It is therefore highly uncertain when such a currency will be created and which countries it will cover.

"In the House on 20th November, I said that there must be a provision giving the United Kingdom the right to decide for ourselves whether or not to move to stage 3. That requirement has been secured. It is set out in a legally binding protocol which forms an integral part of the treaty. The protocol was drafted by the United Kingdom and fully protects the position of this House. The effect of the protocol is as follows. We have exactly the same option to join a single currency at the same time as other member states if we wish. We shall be involved in all the decisions. But, unlike other governments, we have not bound ourselves to join regardless of whether it makes economic and political sense.

"The treaty text on political union provides for enhanced intergovernmental co-operation on foreign and security policy, on defence policy and in the fight against terrorism, drug trafficking and other crimes.

"International crime knows no frontiers. Terrorists and other criminals must not be allowed to escape justice or to "retire" abroad with the proceeds of their crime. This text gives us a new basis for co-operation with our partners in bringing these criminals to justice.

"The text provides for joint action in foreign policy, building on what was already agreed in the Single European Act. But as I told the House on 20th November, if Britain needs to act on our own we must be free to do so. The treaty meets that requirement. Joint action can take place only if we agree. Where there is no joint action, each member state is entirely free to act on its own. If, after joint action has been agreed, a member state needs to take its own measures to meet changed circumstances, it may do so.

"There was pressure from other member states to take foreign policy decisions by majority voting. I was not prepared to agree that Britain could he out-voted on any substantive issue of foreign policy. Some of our partners also sought to draw a distinction between decisions of principle, where unanimity would apply, and implementing decisions which could be subject to majority voting. No one was able to explain how that distinction would work. I told the European Council that if such occasions did arise we should consider the case for majority voting on it merits. The treaty reflects our view. It provides that the Council may, but only by unanimity, designate certain decisions to he taken by qualified majority voting. But we cannot be forced to subject our foreign policy to the will of other member states. We have in fact preserved unanimity for all decisions where we decide that we need it.

"We are agreed that Europe must do more for its own defence. We should build up the Western European Union as the defence pillar of the European union. But the treaty embodies the view set out in the Anglo-Italian proposal two months ago, and endorsed at last month's NATO summit, that whatever we do at European level must be compatible with NATO. The Western European Union must in no way be subordinate to the European council. It is not. We have avoided the danger of setting up defence structures which would compete with NATO. We have created a framework in which Europe can develop its defence role in a way which complements the American presence in Europe and does not put it at risk.

"In these negotiations we put forward a series of proposals designed to be of direct benefit to the citizen. All of them were accepted. The Community has agreed: to increase the accountability of EC institutions; to strengthen the European Parliament's financial control over the Commission; to allow the European Parliament to investigate maladministration and to appoint an EC ombudsman accessible to all Community citizens; to build up the role of the Court of Auditors, which becomes an institution of the Community; and to ensure compliance with Community obligations by giving the European Court of Justice power to impose fines on governments who do not enforce them.

"We wanted—and secured—a sensible enhancement of the role of the European Parliament. We did not accept the proposal made by other member states for a power of co-decision between the Parliament and the Council. As I told the House on 20th November, the Council of Ministers must be the body that ultimately determines the Community's laws and policies. I also said then that we were prepared to consider some blocking power for the European Parliament. That has now been agreed. The treaty sets up, in a limited number of areas, a conciliation procedure where there is a disagreement between the Council and Parliament. In the last analysis the Parliament would be able to block a decision in those areas, but only if an absolute majority of its members turned out to vote the proposal down.

"The House has been rightly concerned at the creeping extension of Community competence over the past few years. The Commission has often brought forward proposals using a dubious legal base; and the Council has found it difficult to halt that practice in the European Court. We have taken significant steps to deal with that problem.

"First, the structure of the treaty puts the issues of foreign and security policy, interior and justice matters and defence policy beyond the reach of the Commission and the European Court. Secondly, the treaty itself embodies the vital principle of "subsidiarity", making it clear that the Community should only be involved in decisions which cannot more effectively be taken at national levels. Thirdly, in some areas—notably health protection, educational exchanges, vocational training and culture—we have defined Community competence clearly for the first time. Fourthly, there will be no extension of Community competence in employer-employee relations—the so-called social area.

"We have a high standard of social protection in this country. Our National Health Service, free at the point of use, is the envy of many in Europe. But we recognise the Community's social dimension. And, unlike some of our European partners, we have implemented that dimension too. Nineteen out of the 33 measures in the social action programme have been agreed. But there is no reason for the Community to get involved in employment legislation, which must be for each country to decide for itself. Over the past 12 years we have transformed labour relations. In 1979, 29 million working days were lost in strikes. Last year, the figure was less than 2 million. I was not prepared to see that record put in jeopardy. I was not prepared to risk Britain's competitive position as the European magnet for inward investment. I was not prepared to put British jobs on the line.

"Many of our partners have a wholly different tradition of employment practice which is reflected in the separate arrangements that they have agreed which will affect only their countries and for which only they will pay. But even among these member states there are many who fear the effect of Community measures on their jobs and their ability to compete. Our arguments are not based only on our national interest but on the risks we perceive to the competitive position of the Community as a whole.

"This week's events in the Soviet Union were a salutary reminder that reform in the Community is not an end in itself. The Community's primary task must be to extend its own advantages of democracy, stability and prosperity to eastern Europe. At British initiative, we committed ourselves at Maastricht to the further enlargement of the Community, starting with the EFTA countries. When they and, in due course, the new democracies of eastern Europe are ready to join the Community, we shall be ready to welcome them.

"With this in mind, the Commission will report on enlargement to next June's European Council in Lisbon. Thereafter, it will be for the British Presidency to carry that work forward. I look forward to doing so.

"We agreed a number of statements on foreign policy issues. I will single out two of them. On the Soviet Union, the European Council calls on the republics to respect the rights of minorities, to implement international agreements on arms control and nuclear non-proliferation, to control and secure their nuclear weapons and to honour their obligations in respect of the Soviet Union's external debt.

"The European Council has endorsed the demands which we, France and the United States have made to the Libyan government requiring them to abandon their support of terrorism and to hand over the perpetrators of the Lockerbie bombing.

"The founders of the Community knew that they could not create a viable organisation if they established goals that could never be achieved. In talking about European union, we are talking about concepts that have to be cast in the reality of national legislation and every-day life. The Single European Act started as a grandiose design and ended up as a workmanlike blueprint for a free market. These treaties have followed the same course.

"Our role has been to put forward practical suggestions—and sometimes to rein in the larger ambitions of our partners. Where we believe their ideas would not work, we have put forward our own alternatives. And these can be found throughout the treaty. As with all international negotiations, there has been give and take between all Twelve member states. But the process was one in which Britain has played a leading role. The result is one in which we can clearly see the imprint of our views.

"This is a treaty which safeguards and advances our national interests. It advances the interests of Europe as a whole. It opens up new ways of co-operating in Europe. It clarifies and contains the powers of the Commission. It will allow the Community to develop in depth. And it reaches out to other Europeans—the new democracies who want to share the benefits we already enjoy.

"It is a good agreement for Europe and for the United Kingdom. I commend it to the House". My Lords, that concludes the Statement.

5.40 p.m.

Lord Cledwyn of Penrhos

My Lords, I thank the noble Lord the Leader of the House for repeating the Statement. It seems that the Treaty of Maastricht has been signed after a considerable struggle, a struggle in the main between the United Kingdom Government and the rest. We shall need to study all the implications, and ascertain what concessions have been made on both sides to secure agreement. The House will be aware that we on this side are most concerned and disappointed that the Government fought to the last ditch, not on foreign affairs, not on defence, not on the single currency, but on the social dimension. Social policy has been set aside to suit the Government.

Although 11 countries supported the Social Charter, the Government resisted its adoption to the end. It is extraordinary that subjects of critical importance upon which this country has given the lead to Europe over the century are dismissed by the Government. They say that the cost to British industry is too high. Will the noble Lord explain why Germany and France in particular, both with more successful economies than this country—one with a Conservative Government and the other with a Socialist Government—supported the social policy from the start? Why does it present dangers to us but not to them?

I have a further question to put to the noble Lord. Are the 19 out of 33 measures referred to in the Statement embodied in the Maastricht Treaty?

We are also anxious to strengthen the European Parliament; but the Government have always tended towards the status quo. It is now to have more powers. Will the noble Lord indicate precisely what they will be? On the question of a single currency, does he agree that we have chosen the second track? Is that not likely to damage British industry far more than is support for the social policy? How will the opt-out clause affect the confidence of British finance and industry?

The Statement says that the single currency may come into being in 1997 only if seven countries meet the convergence conditions, and if eight vote in favour. What are those conditions, because they are not clear from the Statement? Furthermore, how does the noble Lord think that will affect this country's prospects of, and proper bid for, having the European bank established in London?

As I understand the Statement, foreign affairs are now divided into two categories: one subject to majority voting and the other not. Will the noble Lord give the House an example of one or two issues upon which the Government will accept majority voting? Without that information, it is difficult to make a judgment on the value of that part of the Statement. There are several other matters which obviously require close attention, and I warmly welcome the noble Lord's announcement that there will be a debate in the House next week.

Lord Jenkins of Hillhead

I also thank the noble Lord the Leader of the House for repeating the Statement upon which I shall endeavour to make a brief initial comment. I hope that the noble Lord, Lord Cledwyn, was right in assuming that there was to be a debate in the House next week. I thought that the Statement referred to the fact that there would be a debate in the other place next week. That, if I may say so, underlines the need for an early debate in this House. The first point with which I hope the noble Lord will deal concerns when we will have a debate in the House, because the superficial comments that one can make on this occasion are no substitute for a debate.

I do not wish to be unduly critical of the right honourable gentleman the Prime Minister. I admire the temperament with which he has conducted himself at the Maastricht European Council. A European Council, with its multi-lingual deliberations (although of course with expert interpreters) on a wide range of issues; in a room with no official advisers present; proceeding in private, but with public, and often selective, briefings taking place immediately afterwards, is not an easy forum for even the most experienced heads of government who are not in a specially exposed position. The Prime Minister, of necessity, cannot at present be an experienced head of government. By his pre-summit activities he put himself into a peculiarly exposed position. In those circumstances, I pay tribute to the good temper and the nerve with which he appears to have played his part in the proceedings.

I fear that that is about as far as I can go. The outcome could, of course, have been worse. There has been no rupture, but I am struck by the defensive nature of the Prime Minister's Statement. There is no European leadership voice here for this country and no call to our European partners. He can only hope that they will not read it too closely. The posture struck by it is, frankly, a defensive one of hoping that there will not be too many attacks coming from behind him.

The note constantly struck is that of looking for the exits. If one goes to watch a play and one keeps one's eye on the exit sign rather than the stage, one is unlikely greatly to enjoy the performance. That is the position struck in regard to the single currency. Any British leader negotiating in Europe should keep in the front of his mind the words—I paraphrase them rather roughly—with which the British representative left the Messina Conference 36 years ago. He was broadly saying, "What you are talking about won't happen. If it does happen, it won't work. If by chance it does work, we shall be quite happy outside it". Every one of those words has been proved to be completely false. We have lived with the consequences of them for the past three and a half decades. We might have learnt a little from that.

On the single currency, as I say, we are concentrating upon the exit signs—I put it more strongly than the noble Lord, Lord Cledwyn—which will guarantee that we cannot be a candidate for being the seat of the European central bank, although that is in a state of flux at the moment. How could that conceivably be so when we say that we might be off at any moment? I merely have to pose the question to see how ridiculous it is.

Secondly, on the Social Charter, we have chosen to stand semi-detached again, and, if the present Government are by chance returned again, it will be interesting to see whether, as the decade of the 1990s unfolds, we, without the Social Charter, prosper uniquely in Europe, whereas the German and other economies, staggering under that intolerable burden, put up an economic performance consistently weaker and worse than ours. Let us see what happens. If that is what occurs, one will have to admit that some assumptions were wrong. Until it does, I am bound to conclude by saying that it is better than a rupture, but there is nothing here which puts Britain at the heart of Europe. On the contrary, there is everything here which continues our policy of semi-detachment, of dragging our feet and of always joining reluctantly and, therefore, uninfluentially.

Lord Waddington

My Lords, I am bound to say that we have heard two comments which bear little or no relationship to what was achieved at the conference. There seems to be no realisation that at the conference the Prime Minister achieved all the Government's principal objectives. He achieved what we had set out to achieve so far as the European monetary union was concerned; he achieved what we wanted to see in the field of foreign policy, defence and interior justice. I do not believe that even the Opposition think that the Government were wrong to set out to try to keep that out of the machinery of the treaty. We succeeded in doing that. We succeeded in having the principle of subsidiarity written into the treaty, and, so far as I am aware, even the Opposition do not think that we were wrong to negotiate hard to achieve that. We have succeeded in introducing new mechanisms for more effective financial control of the Commission. As far as I am aware, the Opposition do not oppose that.

We have succeeded in seeing that the European Parliament will have new powers to investigate maladministration within the Commission. We have seen the setting up of a European Community ombudsman. We have seen more power given to the European Court so that we will see the proper implementation of Community law, and will have no more of the obscenity of people signing on the dotted line without having any intention of implementing that to which they have subscribed. We have seen the federal vocation eliminated from the text. That is not just a matter of words, because it is the key to the removal of foreign policy and interior justice matters from the treaty.

The noble Lord, Lord Cledwyn of Penrhos, talked of the social dimension. Of course we accept that there is a social dimension to the treaty; 19 of the 33 measures in the social action programme have been adopted and all have been implemented by the United Kingdom. Our standards in many fields of worker protection are higher than those on the Continent: for example, in the field of health and safety. So it is making a mockery of the facts if one talks the whole time as if Britain is not prepared to take any measures to look after the interests of workers in this country.

However, we could not accept a text which would allow the Community to adopt measures which would drive a coach and horses through our trade union reforms of the past 12 years and which, as was mentioned by the Prime Minister, have reduced the rate of strikes in this country and restored order where previously there was chaos. Those reforms revived us from a position where we were the laughing stock of Europe. We cannot accept measures which would damage British competitiveness and cost British jobs.

It is interesting to note that others have signed the protocol but there is nothing specific in its terms, nothing about working conditions in its terms. If the others adopt measures which are worthwhile, we can act similarly. As it is, we have welfare provisions which do not exist on the Continent. We have a health service whereas there is nothing comparable on the Continent. But perhaps Mr. Delors is right, American and Japanese investment will flood into Britain as a result of this ill-considered decision by the other members of the Community. Why should I or anyone else complain about that?

The noble Lord, Lord Cledwyn, asked about Germany. Why cannot we take on all these measures if Germany can do so? That is a matter for Germany, but one must be careful in making these comparisons. There are plenty of examples of Britain being in the lead in the social field. I have already quoted many and I shall not bore the House with any more.

As regards the single currency, I believe that we have chosen the best of all conceivable worlds. We can decide at a later date whether or not it is to the advantage of Britain to go in. All our options are open, we do not have to accept any control of monetary policy during Stage Two and we can make the decision, if and when we wish to do so, to enter the single currency.

The noble Lord, Lord Jenkins of Hillhead, was kind enough to pay tribute to the good temper and nerve of the Prime Minister, but I did not appreciate much of what he said beyond that. I point out to him that the question of the seat of the European central bank does not have to be addressed now and probably will not be addressed for many years to come.

As regards the Social Charter, I was amazed to hear what the noble Lord, Lord Jenkins, had to say because his views certainly do not equate with those of Mr. Ashdown. Mr. Ashdown wrote a letter to the Guardian yesterday pointing out that he did not believe any of this nonsense of our signing on the dotted line for the social dimension. He wrote: My concern is that the draft Treaty Chapter fails this test [of subsidiarity]. It provides for an expansion of treaty-based Community competence into areas of wage bargaining and social security that should rightly remain with member states, or with individual firms and Citizens". The noble Lord's statement only shows the infinite divisibility of even a small quantity of matter.

5.54 p.m.

Lard Boyd-Carpenter

My Lords, will my noble friend first clear up the question as to whether the reference in the Statement to a debate next week was to a debate in another place or whether it also included—as I hope it does—a promise of a debate in this House? At the moment that matter seems obscure to me.

I also ask him whether he appreciates—as I am sure he does—that to most of us certainly on this side of the House the outcome of this gathering is a great personal success for the Prime Minister. I very much appreciate what was said by the noble Lord, Lord Jenkins of Hillhead, as to the strain of dealing with all these complex matters in the personal way in which they have to be dealt with at these gatherings. I am sure that most of us wish to send our warmest congratulations to the Prime Minister and an indication that this outcome causes us to have increasing confidence in his management of this country's affairs.

Could my noble friend also clarify two other points? First, he said something about a budgetary deficit affecting the financial arrangements if we entered into them. What exactly is the provision concerning a budget deficiency affecting the agreement once entered into? Secondly, can he say whether any of the new candidates for membership of the Community are likely to come forward in the next few months? He referred to the EFTA members but did not indicate whether there was any barrier to their coming forward right away, within the next few weeks, if necessary. Perhaps he could give us some indication of that.

Finally, I should like to say how delighted I am that the Social Charter has been rejected. Apart from anything else, it would have interfered entirely with our working hours and days of the week, with Sunday working. We have grounds to be proud of our arrangements for labour law and social matters which, in my view, are greatly superior to those on the Continent. There is no earthly reason why we should lower our standards in order to coincide with them.

Lord Waddington

My Lords, I said nothing about a debate. I had been told that it was announced in another place that there would be a debate there. Obviously it is for discussion through the usual channels as to when there might be an opportunity for a debate here. I should in no way be reluctant to have a debate, although I do not believe that there will be much chance of having it next week. I do not think that that is any obvious disadvantage because we shall have the opportunity of looking at all the documents. I gather that it will be some time before we get full translations of many of the documents and will be able to study them to the extent that many of us wish. We have only heard the broad outlines today.

I am grateful to my noble friend for saying what an enormous achievement it has been for the Prime Minister. It is right to say that it was not all done in a conference lasting two days. There have been laborious negotiations, started and continued successfully under the Prime Minister's predecessor and continued successfully under his own leadership. All I said was that we would continue to be able to operate our own monetary policy during Stage Two until such time as we might decide to go into a single currency.

As regards new members, we managed to get agreement that it should be decided in 1992 whether new members should be discussed then, and that a report should be made to the Council of Ministers in Lisbon in the summer of 1992.

5.59 p.m.

Lord Stoddart of Swindon

My Lords, is the noble Lord aware that I would not have signed any treaty at all, so I regret that it has been signed? Can the Leader of the House give an assurance that the signing of the new treaty on EMU does not in practice put this country to all intents and purposes on a conveyor belt to federalism? Will the Minister give that assurance? Will he also say whether staying outside the EMU treaty will in practice exclude us from Article 105—that concerns the cost of convergence—or will we nevertheless, in spite of our so-called opt-out, have to pay towards the cost of convergence? I hope the Minister will be able to answer that question.

As the Minister is aware, there is a proposal to fine member states for non-compliance with directives. How will such fines be enforced against a state? Will German troops be sent over here to enforce fines, or will we send British troops over to Italy when Italy does not meet the terms of directives, as is so often the case?

We have had no opportunity to consider the small print of the new treaty. Therefore can we be given an assurance that that small print will not allow the Commission to increase its creeping competence in areas where that is not intended or envisaged by the Government?

Lord Waddington

My Lords, I shall deal with the noble Lord's final point first. One of our principal aims was to be cautious about accepting any agreement on an extension of competence as we have found, sometimes to our cost, that the European Court has stretched the apparent meaning of articles to their limit in order to increase powers of intervention when that is unnecessary. The agreement reached on European monetary union certainly does not put this country on a conveyor belt to federalism. As I pointed out earlier, we were successful not only in obtaining the removal of the word "federal" from the treaty, but also in removing great chunks of activities from the treaty mechanism. We managed to remove activities from the machinery of the Commission and of the European Court.

As regards the cost of convergence, I understand that we have reached no agreement to pay any more than we are already pledged to pay under the contribution system which involves contributing to other countries to bring about earlier convergence. We have reached no such agreement. On the matter of fines, I do not imagine that once the European Court has the power to order a fine to be paid by a country, the country concerned will default. The problem at the moment is that some states do not get cracking and put into effect the changes in the law which they have undertaken to put into effect. However, I cannot believe for one moment that the problem the noble Lord mentioned is a real one.

Earl Russell

My Lords, I hope the noble Lord the Lord Privy Seal will note that my noble friend Lord Jenkins of Hillhead and my right honourable friend Mr. Ashdown both speak for our party, but they were not speaking about the same thing. As regards the Social Charter, my noble friend Lord Jenkins said exactly what I heard my right honourable friend Mr. Ashdown say last night. We are in favour of it. My right honourable friend wanted to express misgivings about the social chapter before the negotiators at Maastricht. He shares—as does the party—many of the Government's reservations about the employment proposals in that treaty. We too would have resisted those proposals. However we are disappointed that the Government resisted so much else as well.

I understand the argument of cost. However, there is no such thing as a free lunch. If we do not implement the directive on part-time workers, for example, does not the noble Lord agree that the costs of low wages must fall somewhere? They would most likely fall on the social security budget through housing benefit and family credit. I know my noble friend Lord Ezra has often said that more should be done to assist industry. We agree with that. I ask the Minister to consider whether a blanket, indiscriminate subsidy to wages through the social security budget is the most efficient way of doing that. Is there a possibility that such a blanket subsidy to wages might be held to infringe EC competition policy or, as suggested in The Times this morning, that it might be held by the European Court to infringe the level playing field provisions of the Single European Act? Like my noble friend I much regret the negative tone of this Statement. It sounds a little as though the permanent members of the Community should now be known as the 11½

Lord Waddington

My Lords, I am simply amazed at that contribution. I simply cannot understand how anyone, using the English language in the way it is supposed to be used, can say that the Statement is a negative one in view of the great list of changes that will take place as a result of this agreement. One only has to single out one or two of the changes. There are new provisions to obtain better control of the Commission and better monitoring of expenditure. I do not know how anyone can say those are insignificant measures. There is the addition of subsidiarity to the text. I do not understand how anyone can say that is insignificant. People may not like that provision, but they cannot claim it is insignificant.

There is the matter of removing the federal vocation from the text. Then there are all the things that will happen to achieve greater co-operation and the provisions concerning defence and foreign policy. I believe the noble Earl's leader said that we had adopted the correct approach on many of those issues. I believe that if the noble Earl studies the Statement later, he will find that not only did his leader join with us in opposing the social chapter, but he also agreed with many of the steps we have taken in this agreement. There is no doubt about that whatever.

The noble Earl said that the noble Lord, Lord Jenkins, and his leader in another place are talking about different things. I do not understand that statement as I read out precisely what Mr. Ashdown stated in the Guardian yesterday. He said absolutely plainly, in words that cannot be doubted for one moment, that he would not have signed the social chapter.

Lord Jay

My Lords, is it not right that when a former British Prime Minister at least does her best to limit damage to British interests she should be given full credit for that, even if she belongs to the wrong party? Are not the opt out procedures a sensible proposal as they will allow each country to do what it likes and what suits it best? Could they not be a valuable precedent for the future on other issues?

Lord Waddington

My Lords, everyone is aware of the expertise of the noble Lord in this matter and the great interest he has taken in it throughout. There are many things we can do perfectly well as a country. We should pause for a long time before coming to the conclusion that this whole issue is so terribly difficult that it can he carried out only under the auspices of a bureaucracy in another place.

Baroness Elles

My Lords, does not my noble friend agree that the Statement that my right honourable friend made in another place heavily underlines the objectives which he set out in his speech of 20th November? Consequently this Statement is intended mainly for the British Parliament and the British people. Nevertheless is he not warmly to be congratulated, together with the 11 heads of the other member states, on having set up two texts which lay down a foundation for future co-operation in Europe in financial and other matters? Therefore we may improve the relationship between the institutions. That was a major problem for the ongoing affairs of the Community. We will also enable the Community to be in a strong enough condition to receive other members in due course, principally through EFTA and through the emerging democracies in Eastern Europe. Surely we want a peaceful area in Western Europe that is economically and politically stable, particularly in view of what is going on in other parts of the world.

Lord Waddington

My Lords, it is significant that it is recognised that as soon as other countries in Europe can meet the conditions for entry they will be welcomed. Certainly we in Britain want to see that widening of the Community. My noble friend highlighted the fact that, as I said earlier, there is so much that is positive in the Statement. The treaty lays the foundations for closer co-operation in all sorts of fields even though many of those fields remain, wisely, outside the treaty.

Lord Murray of Epping Forest

My Lords, is the noble Lord aware that millions of trade unionists in Europe are probably sighing with relief that the dead hand of the UK Government will not be involved in the shaping of social policies over the next few years? In that respect it may well be that the Prime Minister has scored an own goal. Maastricht is not the end of the world or the end of Europe, and when those social policies come to be applied in this country, perhaps as a result of pressure to establish a playing field which is more level than at present, we shall benefit from the results of discussions which will produce much better policies than would have been the case had the United Kingdom Government been involved in their development. Therefore we can look forward to the future with some confidence.

Lord Waddington

My Lords, the noble Lord seems to have a very defeatist attitude and a very poor opinion of his own party, which I suppose he hopes will come to power one day. I really do not understand why he does not feel that his own party in government would be perfectly capable of carrying out whatever legislation was necessary in the social field.

Lord Trefgarne

My Lords, is my noble friend aware that, contrary to having scored an own goal, as the noble Lord, Lord Murray, suggested, my right honourable friend the Prime Minister, ably supported by my right honourable friends the Foreign Secretary and the Chancellor of the Exchequer, has won a famous victory and deserves our warmest congratulations?

Perhaps I may ask my noble friend two quick questions. First, has anything been achieved in the discussions to provide a better degree of democratic scrutiny of the work of the European Commission, a matter which has caused some anxiety in the past? Secondly, has anything been achieved in the discussions which have taken place in regard to defence to prevent, for example, the recent experience in which our Belgian friends most regrettably declined to supply ammunition for our troops in the Gulf?

Lord Waddington

My Lords, we have not yet reached the stage of having a European defence policy. All parties recognise the difficulties in moving that far. We have achieved what we set out to achieve. The Western European Union will remain central to the defence of Western Europe. There will be no conflict between the Western European Union and NATO, which will remain supreme. In relation to defence policy we got what we wanted.

I do not have the precise details before me but, broadly speaking, the European Parliament will be given more powers to investigate spending by the Community and will be able to investigate allegations of maladministration by the Commission. There will be new powers for the Court of Auditors.

Lord Ezra

My Lords, the noble Lord will be very pleased to learn that the Printed Paper Office, with its usual efficiency, has at its disposal a copy of the treaty and the amendments agreed yesterday. That enables me to ask my question with some degree of precision. I refer to Article 109(f) which deals with the third stage of economic and monetary union and sets out the criteria on which countries can be regarded as being able to move to a single currency. In his opening remarks the noble Lord referred quite rightly to the efforts which the UK Government had made to introduce the concept of convergence before countries could move to a single currency. That has been adopted and is set out clearly. Incidentally, I can let the noble Lord, Lord Boyd-Carpenter, know that the question which he raised on budgetary convergence is dealt with in Article 104(b).

I cannot understand why, having with great success achieved the condition of convergence before a single currency can be achieved, the Government nevertheless still apparently want, even if this country achieves convergence by 1996, to be able to opt out of the next step. That seems rather odd and I should be very glad if the noble Lord would explain the reasoning behind that position.

Lord Waddington

My Lords, we have a very strong belief in parliamentary sovereignty. Some years have to go by before it is suggested by anybody that there should be a single currency. To our mind it is quite right that the Parliament of the day should have the opportunity to decide then whether or not it is in Britain's interest to enter a single currency.

Lord Cavendish of Furness

My Lords, in the absence of the clock, I regret that I must draw your Lordships' attention to the fact that the 20 minutes for discussion on the Statement have been exceeded.