Lords Sitting of 18 December 1991

Preamble
The House met at half past one of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Bristol.

Air-to-Surface Missile System
Lord Mayhew Lord Mayhew asked Her Majesty's Government:
What is their estimated cost of the proposed air-to-surface nuclear missile system.
The Parliamentary Under-Secretary of State, Ministry of Defence (The Earl of Arran): My Lords, we are considering several options for a replacement for the WE177 free-fall bomb, but no decision has been taken.
Lord Mayhew: My Lords, does the noble Earl agree that whatever system is chosen, it will be very expensive? As the Trident submarine can be made to fire a single missile or even a single warhead with pinpoint accuracy, why do we need to spend large sums of money on a different extra nuclear missile system?
The Earl of Arran: My Lords, the noble Lord is right. Trident is certainly a flexible system which is capable of a limited as well as an all-out strike. I make two points: first, any use made of Trident for sub-strategic purposes will lessen our strategic last resort capability. Secondly, even the firing of a small number of missiles will risk giving away a submarine's position and exposing it to the other side's anti-submarine warfare forces. Neither of those consequences is at all desirable.
Lord Jenkins of Putney: My Lords, does the noble Earl agree that the Government would be better employed in spending their time just now in considering the general nuclear position in the world at large rather than extending their own nuclear capacity?
The Earl of Arran: My Lords, that is exactly what we are doing. We are considering the world nuclear situation. That is why we are keeping our minimum deterrent force available.
Lord Mayhew: My Lords, will the noble Earl think again about the two answers that he gave me? His first point was that if we had Trident in the sub-strategic role, we would not simultaneously be able to use it in a strategic destructive role. Is he seriously envisaging a scenario in which we use nuclear weapons in two different roles against two different enemies? That makes no sense at all.
The Earl of Arran: My Lords, as the noble Lord knows full well, we live in an extremely uncertain world and we must be prepared for and expect the
1328
worst in some circumstances. Furthermore, a separate system also provides the Prime Minister with a greater range of options in a crisis.

London Underground Plan: Effects
1.40 p.m.
Lord Molloy Lord Molloy asked Her Majesty's Government:
Whether they consider that the proposed staff reductions on the London Underground are consistent with the safety and efficiency of the service.
The Minister of State, Department of Transport (Lord Brabazon of Tara): Yes, my Lords. The aim of the plan is to make the underground system more efficient. London Underground is confident that this will enable it to raise safety standards, improve quality of service, cut costs and increase revenue.
Lord Molloy: My Lords, I thank the noble Lord for that reply. Is he aware of the considerable consternation among the travelling public in London as to whether London Underground, let alone the bus system, is all that safe any more? Is he further aware that dismissals have already started in the outer regions? When one travels, for example, from East Acton all the way to Ruislip, as I did this morning to check this out, one sees not one single member of staff. They have all gone. The only people one sees are bill-stickers, pasting up bills on behalf of London Transport saying that fares will be increased next month. Does the Minister believe that we can sacrifice safety in order to save a few thousand pounds through the dismissal of important staff?
Lord Brabazon of Tara: My Lords, there is no question of safety being sacrificed by the measures proposed in the London Underground plan. Among other things, the plan will bring about by 1995–96 a 75 per cent. reduction in peak cancellations, a more regular and reliable train service and a 40 per cent. reduction in the number of escalators out of service.
Baroness Gardner of Parkes: My Lords, will the Minister confirm that the most important improvements in safety are as recommended in the Fennell Report, and that London Underground has been quite good in carrying those out? Will he also confirm that a great many closed circuit television cameras are now in use in Underground stations? Those may be replacing visible station staff, but the screens are being watched by staff situated elsewhere in the station.
Lord Brabazon of Tara: My Lords, I agree with my noble friend that London Transport has been assiduous in implementing the recommendations of the Fennell Report. In addition to more video coverage of stations, there will be an increased staff presence on the platforms and at stations.
Lord Grimond: My Lords, have the Government seen the notices from London Transport that the escalators at Victoria will be out of action for nine

1329
months? That is a third of the time it took to build the whole Central Line. Can they do something to expedite the matter?
Lord Brabazon of Tara: My Lords, that very question was raised in the House on Monday. The noble Lord may have noticed London Transport's advertisement in the Evening Standard last night. That explained why that was necessary.
Lord Underhill: My Lords, is it not the case that the Monopolies and Mergers Commission inquiry into London Underground concluded that the major deficiencies in London Underground were due to lack of investment? From looking through the business plan and the company plan, I find that we are talking of a reduction in personnel from 21,000 to 16,000. Having looked through these documents, I find it very difficult as I do not have a research assistant to ascertain exactly where the reductions will take place. As my noble friend Lord Molloy has said, it may be that the reductions that are due to take place will imperil the position on safety.
Lord Brabazon of Tara: My Lords, the report of the Monopolies and Mergers Commission made two main recommendations. It called for both increased efficiency and higher investment. The Government are already providing the higher levels of investment that are needed. It is now up to London Underground to implement increased efficiency. That is what it is planning to do with the company plan.
I turn now to safety and safety measures. Any changes made will be subject to consultation between London Underground, the railway inspectorate and the London Fire and Civil Defence Authority.
Lord Molloy: My Lords, is the Minister aware that people are gravely apprehensive, and that they do not want to see another incident, like King's Cross, in which people lost their lives? Further, can he say whether an American organisation has put £4.2 million into London Transport with the condition that the number of staff must be reduced? Why do the Government think that the answer to all our problems is to create more and more unemployment and cause great unhappiness to people with mortgages?
Lord Brabazon of Tara: My Lords, that is certainly not the purpose of the plan; its purpose is to produce a more efficient and effective Underground system for the people of London.
Lord Strabolgi: My Lords, how can the system be more efficient with fewer staff? Is the noble Lord aware that in the depths of the Underground, in the Tube, one sees no one, except beggars and itinerant musicians?
Lord Brabazon of Tara: My Lords, it is perfectly possible to be more efficient with fewer staff. As I said in an earlier reply, the noble Lord will be pleased to know that passengers will see an increased staff presence. There will also be more frequent patrols of platforms, and transport police will be more effectively deployed.

EC Member States: Armed Forces
1.45 p.m.
Lord Monson Lord Monson asked Her Majesty's Government:
Whether they expect that the armies and air forces of the Twelve member states of the European Community will be replaced by a single army and air force; and, if so, what will be the language of command and to whom will any oath of allegiance be sworn.
The Minister of State, Foreign and Commonwealth Office (The Earl of Caithness): No, my Lords.
Lord Monson: My Lords, I thank the noble Earl for his reply. It seems to indicate that the Conservatives at Westminster and the Conservatives at Strasbourg are at cross-purposes. Is he aware that the Conservative MEP for Lincolnshire, Mr. William Newton Dunn, has been enthusiastically forecasting for many months now that within a relatively short space of time there will be a single unified European army and a single unified European air force? If that should happen, will the noble Earl agree that whereas British servicemen may be prepared to die for family, friends, Queen and country, very few of them are prepared to die for M. Delors or his successor—or indeed for an entity such as the EC which commands the instinctive loyalty of virtually no one?
The Earl of Caithness: My Lords, whereas the noble Lord, Lord Monson, may prefer to deal with forecasts, I prefer to deal with agreements. The noble Lord will have read—I hope with considerable pleasure—the results of the Maastricht agreement.
Lord Mason of Barnsley: My Lords, although the Western European Union has in recent times been given some prominence, can the noble Earl assure the House that NATO still remains supreme to defend Western Europe and the United Kingdom?
The Earl of Caithness: My Lords, a decision was taken by all the allies at Rome and at Maastricht on the primacy of NATO in European defence.
Lord Richard: My Lords, I should like to say that I positively agree with the noble Earl's negative.
The Earl of Caithness: My Lords, I am sure that the noble Lord will also be agreeing with us all afternoon. I am most grateful to him.

Business
1.47 p.m.
Lord Hesketh: My Lords, with the leave of the House, I should like to say a word about the length of speeches in today's debate standing in the name of my noble friend the Lord Privy Seal to which your Lordships have agreed to apply a six-hour time limit. Following discussions through the usual channels, who have informally agreed on a limit of 15 minutes for all Front Bench spokesmen, with my noble friend Lord Caithness rising to reply not less than 25 minutes before the scheduled end of the debate, all other

1331
speeches should not exceed seven minutes. Your Lordships will recognise that, in agreeing to this new time limit of six hours, we have collectively moved into somewhat uncharted waters. I hope that this agreement will provide a good structure for the debate. I may say to your Lordships that I am sure that the Procedure Committee will be reviewing the success of this afternoon's procedures in due course. Having said that, I need hardly say that if any noble Lord should speak at greater length than I have indicated, he would be doing so at the expense of other speakers in the debate.
There are two further items which I suspect will be of interest to your Lordships. First, I must apologise for the recent arrival of the speakers' list. However, I have to tell the House that a case of electronic indigestion took place in one of the vital pieces of equipment in the Whips' Office, which delayed its arrival. Secondly, I hope that your Lordships will have observed that there are two new electronic Clocks in the Chamber. I should point out that it was not possible to supply the third Clock for the end of the Chamber. A new system in its entirety will be arriving shortly. However, we do have two Clocks and, symbolically, they are in the colours of your Lordships' Chamber.

Business of the House: Debate this Day
The Lord Privy Seal (Lord Waddington): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That so much of the order of the House of 16th December limiting the debate on the Motion in his name this day to five hours be discharged and that the debate be limited to six hours.—(Lord Waddington.)
On Question, Motion agreed to.

Maastricht Agreement
1.49 p.m.
Lord Waddington Lord Waddington rose to move to resolve, That this House warmly endorses the agreement secured at Maastricht, and congratulates the Prime Minister on securing all Her Majesty's Government's negotiating objectives.
The noble Lord said: My Lords, when I spoke in our debate on 25th November, I commended to your Lordships' House the Government's negotiating position in the intergovernmental conferences on monetary and political union. It is a measure of the Government's success at Maastricht that I run the risk of repeating myself this afternoon.
On 25th November I said that Europe's future developments should be based both on co-operation as a Community under the Treaty of Rome and intergovernmental co-operation outside. I said that when there was action within the treaty, the Community should respect the principle of subsidiarity; that there was no need for Community action when the objectives could be achieved by member states acting alone; and that there should be no
1332
unnecessary or inappropriate measures of harmonisation. I said that there should be better enforcement and implementation and compliance with Community legislation. I also gave the Government's view on any extension of the legislative powers of the European Parliament and emphasised our belief in the need for closer involvement of national Parliaments. I spoke of the need to make preparations for the enlargement of the Community.
I did not expatiate on our views on EMU because those were well known. We now know the outcome of the negotiations. The United Kingdom remains free to decide whether to join a single currency and if so, when. A number of years from now a future Parliament will be able to weigh the benefits and disadvantages of joining and make a decision about where British interests lie. But Britain is and will continue to be fully involved in the discussions on shaping EMU—and has played a leading part in ensuring that there are rigorous convergence criteria which have to be observed by any member state before it can move to a single currency.
So our objectives so far as European monetary union is concerned have been met. So have all other objectives of which I have reminded the House today; and I submit that the Prime Minister and his colleagues, the Foreign Secretary and the Chancellor of the Exchequer, deserve the congratulations of us all.
Perhaps I may now expand on what I have said in some of the key areas, reminding your Lordships that there will be further opportunities to discuss those matters when legislation is introduced in the next Parliament.
First, I shall deal with subsidiarity. We stressed from the start the need for a strong commitment to subsidiarity to be written into the treaty and this view has been accepted. The treaty now makes it clear that the Community will take action only where objectives cannot be sufficiently achieved at national level. That is a legally binding provision which should also prevent over-regulation from Brussels in the areas where Community action is justified.
The agreed treaty provides for some extensions of Community competence but these are confined predominantly to areas of existing Community activity. There is a sensible extension of qualified majority voting so far as the environment is concerned. But we retain the final say on tax and energy matters relating to the environment where a unanimous vote will be required.
I do not think that there are many who do not believe that there should be new powers to monitor and scrutinise the activities of the Commission—I know that is felt strongly by my noble friend Lord Bethell and the noble Lord, Lord Bruce of Donington—and under the new treaty the European Parliament will be able to establish committees of inquiry, receive petitions from individuals and appoint an ombudsman to investigate maladministration. Furthermore, in future the European Parliament will also have the right to approve the appointment of the Commission.
The Government attach great importance to the financial management and accountability of the

1333
Community. The Court of Auditors is the body with the power to scrutinise how the Community spends the taxpayers' money, and ensures that the money is spent lawfully and properly. The Maastricht Summit agreed, largely at our instigation, that its role should be enlarged.
As to the legislative powers of the European Parliament, the treaty allows the Parliament a right to block certain types of legislation, but only if an absolute majority of its members turn out to vote down the particular proposal. The introduction of a negative assent procedure does of course fall far short of the full-blown co-decision which many of our partners wanted and national Ministers in the Council retain the ultimate right to determine the content of Community legislation.
It was a British initiative too that led to member states agreeing a conference declaration on the role of national Parliaments. Closer contact between national Parliaments and the European Parliament is vital for the democratic fabric of the Community and I am confident that this declaration will encourage such contact to develop further.
I should now like to come to the Social Chapter. The first point I would make is that the existing Social Chapter in the Treaty of Rome remains; and that chapter has undoubtedly provided the basis for action on social affairs by the Community and it will continue to provide a basis for such community action.
We should like such action in the future to pay more respect to national diversity, subsidiarity and employment practices, but the existing treaty provisions have allowed 19 out of the 33 measures in the social action programme to be agreed, with Britain blocking none of them.
As the House knows, we have one of the best records for the implementation of Community legislation. We have of course no reason to be on the defensive about social provision in this country. In a number of areas—such as the National Health Service, minimum income through social security, health and safety at work and employee share ownership—we are ahead of our partners. But national traditions vary widely and in some areas where we do things differently harmonisation is from our point of view highly undesirable. We could not therefore agree to the substantive provisions of the Social Charter being incorporated into the treaty itself, with the possibility of far more extensive legislation affecting the way we run our industrial relations and arrange working conditions in this country, being imposed upon us by qualified majority voting. The Government were not going to see the competitiveness and efficiency of British firms harmed, and jobs put at risk through the imposition of damaging and misguided Community legislation. We were not prepared to see the enormous improvement in industrial relations, which has come about in the last 12½ years, put in jeopardy by Community laws incompatible with this country's needs.
The abuse of union power was the dominant issue in British politics from the publication of In Place of
1334
Strife by the Labour Government in 1968, right through to the end of the miners' strike. The British people remember the anarchy which in 1979 resulted in the loss through strikes of 29 million working days. Last year, only 2 million were lost and the British people would think that we had taken leave of our senses if we had signed up to allowing those hard won advances to be reversed.
Turning now to foreign policy and defence, we have, first of all, secured an important new commitment to a stronger common foreign and security policy, and the influence of the Twelve, which is already considerable, will increase further as a result. That was a key British objective. We have preserved co-operation on an inter-governmental basis and we have ensured that the common policy will be based on consensus. Majority voting can occur only if we and all of the member states agree that in a particular situation it should occur; and when we need to respond in a situation of urgency our freedom to act is safeguarded.
Throughout all the discussions this year the British Government's aim has been to see a stronger European contribution to common defence, organised through the Western European Union, and our view has been accepted. The Western European Union will not be subordinate to the European Council and retains its independence. Above all the treaty provides that a European defence effort must be compatible with NATO obligations.
I think all of us look forward to the day when there will be a wider community embracing the states of Eastern Europe who have thrown off the shackles of communism and other European countries. At Maastricht it was agreed to consider new applications earlier than originally planned and as soon as the review of our own resources is completed in 1992. The European Community has guaranteed prosperity, stability and democracy for the states of Western Europe. It is right and proper that others should be admitted to share those benefits as soon as they are able.
Maastricht was an undoubted success. It has paved the way for closer co-operation between the countries which form the Community and has laid the basis for further progress.
I believe the Prime Minister accurately captured the mood of the British people. They do not want us to lose our national identity and they do not want to see even more power go to a centralised bureaucracy. But they do want us to be at the heart of Europe. They do want us to build a Community which is outward-looking, prepared to accept as members others who share the same ideals and whose new-found democracy the Community can reinforce and able to work even closer together to tackle international problems with which we are faced. That is the kind of Community we are building. It is a Community good for Britain and good for the world.
Moved to resolve, That this House warmly endorses the agreement secured at Maastricht, and congratulates the Prime Minister on securing all Her Majesty's Government's negotiating objectives.— (Lord Waddington.)
2.1 p.m.
Lord Williams of Elvel Lord Williams of Elvel rose to move, as an amendment to the above Motion, to leave out all the words after ("House") and insert ("sees no reason to congratulate Her Majesty's Government on the outcome of the Maastricht Summit.")
The noble Lord said: My Lords, I beg to move the amendment standing in my name on the Order Paper. I wish to start on a conciliatory note, although your Lordships will recognise that what I have to say at a later stage may, I am afraid, be somewhat more contentious. I start in this manner because there are many points on which we can agree with the position that the Government argued and the European Council at Maastricht accepted. I propose to acknowledge those first. Of course, as will appear later, there are also areas—upon which I shall comment—where we disagree with the approach of the Government. And there are other matters which we believe could and should have been more fully discussed at Maastricht but which apparently were not raised or not raised in any substantial measure. I shall be asking why.
Underlying everything, of course, are fundamental questions. Given the internal disputes within the Conservative Party, what is the real attitude of the Government towards the European Community? What signal are they trying to send to our Community partners or indeed to our own country? Are we, in their view, to be at the heart of Europe—as the noble Lord the Lord Privy Seal said—on the edge of Europe, or an offshore archipelago? Those questions are at the centre of our debate today.
Let me start with the points of agreement. On defence policy, we support the conclusions of Maastricht that the primacy of NATO has been confirmed. We welcome too the treaty text on political union which provides for enhanced co-operation on foreign and security policy, the fight against terrorism, drug trafficking and other crimes which know no international boundaries.
Further, we agree with the principle of what is known as subsidiarity by which Community competence should only extend to those areas in which member states cannot reasonably act on their own. We also support moves to extend membership of the Community—as the noble Lord the Lord Privy Seal mentioned—to the emerging democracies of Eastern Europe, as and when they are ready. Finally, we support any extension of Community-wide measures on educational and cultural exchanges, the environment and the promotion of research and development.
So far, so good. In all those matters we welcome the outcome of the Maastricht Summit. But that is about as far as I can sensibly go. I move now to the points of disagreement between ourselves and the Government which, I am afraid, largely outweigh the points on which we can agree.
First, as we all now know, the Government demanded and achieved the right to opt out of the proposed single currency arrangements. That was apparently a great triumph. But when I heard about it—and it was almost impossible not to, with all the Government's propaganda batteries going full blast
1336
—I was left with the feeling that something was not quite right. Was this really what we were originally supposed to be dying in the trenches for? I looked back at some previous ministerial speeches. I found, as I suspected, that the Government had—on I do not know how many occasions—proclaimed their unremitting hostility to the whole idea of a single currency. A single currency, we were told, was simply not on the agenda. The most we would be prepared to accept was the gradual emergence through market forces of a common currency parallel to the national currencies which might, in the course of time, through market forces, become a currency acceptable throughout the Community. The so-called hard ecu scheme, which your Lordships may remember from the past, was designed to be precisely that.
What, then, happened at Maastricht? We have done what Ministers said we would never do. "We shall use our veto", they said. But they did not. We have signed up for a treaty which sets out explicitly the objective of a single currency. Whatever happened to the poor old hard ecu? Whatever happened to the unshakeable conviction of Ministers that Europe would be lost, the world as we know it destroyed in monetary götterdämmerung, if we allowed a single currency to replace the national currencies in the Community?
Not only did the Government sweep under the carpet their previous rooted objections to a single currency, but by the very act of openly demanding an opt-out arrangement they forfeited any negotiating strength that they might have had on the timetable for the moves towards that single currency. Once we had proclaimed our intention to opt out, none of the others even bothered to listen to us on the timetable; and when a very tight timetable was proposed by the French on the Monday, Britain had nothing to say.
"Ah", I hear some of your Lordships say, "you have got it all wrong. By means of the opt-out arrangement, Britain has reserved the right to stay outside the single currency bloc for ever and the Queen's head will for ever be on the pound coin". Theoretically, of course, that is true. But only theoretically. Consider the situation, say, in the year 2000. We must assume that Germany, France and Benelux, at least, will be in the ecu bloc. What happens if Britain remains outside that bloc, even if we meet the criteria for entry? Do we stay in the exchange rate mechanism, within narrow bands, as the Chancellor recently promised? Is there one single noble Lord in this House who believes that in those circumstances we will have any control at all over our domestic monetary policy, or that it is a tenable situation? Of course not.
The fact is that the market would force us to enter the ecu bloc, assuming the criteria are met, whatever the Government or Parliament might think. It would be intolerable for British industry, let alone the City, to be outside because the transaction costs would be too much of a disadvantage. To coin a phrase, the single currency would be imposed on us. That is the truth.
I turn to the matter of the Social Chapter of the political union treaty which the noble Lord the Lord

1337
Privy Seal raised. It has been pronounced again as a great victory that Britain has stayed out. But what in reality is so obnoxious about the Social Chapter? The principle is unexceptionable. The Community and its member states,
"shall have as their objectives the promotion of employment, improved living and working conditions, proper social protection, dialogue between management and labour, the developing of human resources with a view to lasting high employment".
What is wrong with that? There is only one specific proposal in the chapter and that is a commitment to equal pay for male and female workers for equal work. I note that the Government have not signed the Social Chapter.
For the life of me, I cannot see why the Conservative Government—or any Conservative Government—could not subscribe to these principles and to this chapter like their Christian Democrat allies in other member states. I should have thought it was something of which Disraeli—I mention him just to name a name—would have approved.
What about the matters that were not fully discussed at Maastricht? Again, I should have thought, looking at it from the outside, that the Government would have made the centrepiece of their campaign the whole issue of the common agricultural policy and the massive fraud that accompanies it. I should also have thought the Government would have brought forward as a major issue the Uruguay Round of the GATT. I should have thought the Government would have insisted on proper accountability for the actions of the European Commission and would not have been satisfied with the weak declaration that has resulted. I should also have thought that the matter of nuclear proliferation in what was the Soviet Union might have managed to climb on to the agenda, given the serious danger that, as a result of the break-up of the Soviet Union, we might all be inadvertently incinerated. But apparently none of these matters were considered by our Government to be nearly as important as getting the word "federal" excised from the draft of the treaty. I know that sounds absurd, but it is the truth.
All this tells us much more about the current state of the Conservative Party than it does about Europe. Your Lordships are entitled to ask why the Government insisted on the single currency opt out and rejected the Social Chapter. Why did they embark on a course which was to create—whatever anyone may say—a two-tier Europe? Above all, why was all this claimed to be—as it was—game, set and match for Britain? The answers to those questions can only be found in the current state of the Conservative Party. To avoid a massive split the Government have been forced into a position with which even they cannot seriously agree.
The German newspaper Die Welt summed it up well last Friday when it stated:
"The British Government shows that, by comparison with other European industrial nations, Great Britain is a developing country in the fields of labour law, labour relations and social security".
That is true. Instead of earning our way by means of a highly educated and productive workforce and a
1338
properly financed transport and communications system, the Government are sending out the signal that they wish to try to restore our fortunes by a low waged, underprotected pool of labour that is available to any outside investor who wishes to take advantage of it. We are to become the bargain basement of Europe. That is the underlying message of Maastricht.
If that message is one that in the Government's view should give rise to the orgy of self-congratulation in which they are now indulging, so be it. They can take whatever view they like. Our view is that, instead, it is a message which should make them hang their heads in deep and bitter shame. I beg to move.
Moved, as an amendment to the above Motion, to leave out all the words after ("House") and insert ("sees no reason to congratulate Her Majesty's Government on the outcome of the Maastricht Summit.")—(Lord Williams of Elvel)
2.14 p.m.
Lord Jenkins of Hillhead: My Lords, it is obviously my primary duty to speak to the amendment standing in my name even though I cannot formally move it until the end of the debate. The amendment endeavours to express both in substance and in tone the reaction of my noble friends and myself to what was brought back from Maastricht. We regard that as a good deal better than nothing and are glad there was no rupture. In addition, I paid tribute last week to the Prime Minister's good temper and nerve at the European Council. I retract nothing from that.
The Prime Minister avoided a disaster which threatened to occur at one stage due to the cacophony of conflicting European noises that the Conservative Party made. That is a different matter to presenting the outcome as an almost unprecedented British diplomatic triumph. That was the pre-election note conveniently struck by much of the press last Thursday and Friday. However, by the time Saturday and Sunday arrived a little reflection had led to the surfacing of a little more criticism.
What must be clearly understood is that almost everything Mr. Major achieved at Maastricht was negative and was dedicated to placing Britain not at the heart of Europe but on the edge of it. I treasure the reply of the noble Lord, Lord Waddington, last Wednesday afternoon to the interventions of the noble Lord, Lord Cledwyn of Penrhos, and myself. The noble Lord the Leader of the House spoke with unusual passion, absolute sincerity and complete incomprehension when we talked of a positive approach to Europe. He could not understand what I had meant by suggesting that the British appeal was negative.
Had we not ensured that Britain had a right to contract out of monetary union? Had we not kept foreign policy, defence and interior justice out of the treaty? Had we not enshrined the principle of subsidiarity? I happen to agree with that principle, but it can hardly be regarded as particularly positive. Had we not subjected the Commission to more severe financial control? However, it is nearly always the Council of Ministers rather than the Commission which has taken extravagant decisions, particularly on

1339
agricultural policy. Had we not eliminated the word "federal" from the text? Above all, had we not insisted that the Social Chapter must be without us, that the other 11 must be forced outside the treaty in order to implement it, and that there would consequently be great confusion as regards the future position of Community law and the role of the European Court of Justice?
I understand perfectly well there can be legitimate differences of opinion about all these issues. However, I cannot understand how anyone can imagine that the attitude of the British Government on those issues has not been negative and that Mr. Major's triumphs at Maastricht, such as they are, were not negative. It is not possible to imagine such a thing on any normal use of the English language.
There is another way in which this negativism constantly shows itself. Any hint of bad news on European unity, whether that be a suggestion that the Germans are cooling on monetary union or the French are having second thoughts on political union, creates tremors of excitement in Government circles and in most of the press. We flicker towards those rumours with all the unlearning compulsion of moths going towards flames. We do so despite the fact that we have singed our wings on such false rumours of disintegration for more than 35 years. That puts us out of step with almost every other country in Europe, whether inside or outside the Community.
We know the position of the other 11 but what is perhaps even more striking is the desire of almost all those countries that are outside the Community to get in. Austria, Sweden, even Switzerland, Czechoslovakia, Poland, Hungary, the Baltic republics—perhaps soon even the Russian ones, too— want to enter the Community. Yet our desire, our triumph, it is suggested, is to secure as many opt-out clauses as we can.
What should have infused our attitude at Maastricht rather than that constant searching for the exit signs? First, we should base our thinking, and let it be seen that we do so, on a comprehension that in the world in the future the only realistic choice is whether there is to be a balanced tripod of power made up of the United States, Japan and a unified Europe, or whether the United States and Japan will stand alone in the front rank with an unanchored Germany, surrounded by a disorganised number of states on a lower rung, uncomfortably dominant in Europe but not, on its own, a fully effective competitor in the world league. That is the realistic choice for the end of this century and the beginning of the next century.
Secondly, we should appreciate that the widening of the Community, while wholly desirable, makes it more and not less necessary to deepen it. A Community of 20 members, possibly increasing to 25, must have very strong sinews of unity if it is not to lose itself in the incoherence of numbers.
Thirdly, there is the real problem of democratic deficit in the Community which cannot be resolved merely by always fighting a rearguard action on behalf of the Council of Ministers, which is in many ways a very unsatisfactory constitutional hybrid.
1340
In respect of the fourth point the Government were nearer to striking the right note. We need to bring off the difficult feat in foreign and defence policy of causing no loosening of North Atlantic links while the Americans are willing to stay in Europe while at the same time recognising that, without a cold war and with a westward tilt in the balance of the United States, the Americans will probably not remain until and into the 21st century. We have to prepare for that.
Fifthly, if the common currency comes about—which it now almost certainly will, and we gain nothing by constantly pretending that it probably will not—we have no option but to join it. Everybody at the core of the Government and at the head of business knows that that is so. To condemn ourselves to semi-detachment in the next formative five and a half years, believing that we are keeping open an option which does not exist, in those circumstances is pure perversity.
If those views had infused our approach to Maastricht I believe that other issues, including the Social Chapter, could have been dealt with more satisfactorily. I do not want to see excessive rigidities imposed on the British economy, but the Government's handling of the issue has been an extraordinary story. A great deal of what we would have committed ourselves to had been ratified by previous Conservative governments, starting with the Macmillan Government's signature of the Social Charter of the Council of Europe even before we applied to join the Community, continuing with what the Heath Government signed in 1972 at the time of the signature of the Treaty of Rome, and what the Thatcher Government accepted in 1986 with the Single European Act leading on to 1992.
The Government made a short term but a determined effort, which had echoes in the speech of the noble Lord the Leader of the House, to pretend that the Maastricht Social Chapter would have undone much of the trade union legislation of the 1980s. That has been shown to be untrue and was admitted to be untrue by the Secretary of State for Employment. The truth is that, for internal party reasons, the Government were determined to bring back from Maastricht a head on a charger. The Social Charter was chosen to be that head. At first it was pretended that it was a much more important head than it was, but at least it was a head. That is the gravamen of why it is impossible to give more than one small cheer for Maastricht. What the Government have brought back is not a map for Britain's future but a poultice for the Conservative Party.
In probably the most famous polemical index entry ever penned—for indexes are not normally places for polemics —Churchill wrote in The Gathering Storm:
"Baldwin, Stanley, confesses to putting party before country, p. 615".
I am not sure that that was entirely fair to Baldwin but it was sufficiently close to the truth to be devastatingly damaging. I hope that the Prime Minister will not go further down a path which would make such a reference to "Major, John" possible in the future.
2.25 p.m.
Lord Harris of High Cross: My Lords, I regret to say that nothing I have heard in the three eloquent opening speeches alters my Cross Bench view that it is easier to vote against the amendments than to support the Government's claim to have secured all their negotiating objectives.
I ungrudgingly congratulate the Prime Minister on a doughty fight for damage limitation in the teeth of a threatened mugging, if not a gang rape. However, even without seeing the final details, it is quite clear that further damage has been suffered from both the political and monetary treaties.
I shall stick to the monetary principles which I best understand. I do not want to dwell on the folly of monetary union, which, in company with other leading students, I regard as unnecessary, undesirable, uncertain of outcome and unlikely to be established. The latest verdict delivered by Harvard professor Martin Feldstein, President of the National Bureau of Economic Research, was that:
"An artificially contrived European Monetary Union would almost certainly increase the average level of unemployment over time".
Turning to the revised treaty on political union, it is plain that most extensions of what is called the Commission's competence—which I prefer to call the Commission's incompetence—fly in the face of the economic requirements of a single market. Free trade calls for the elimination of subsidies and the removal of restrictions, not the imposition of fresh regulations disguised as harmonisation or, most deviously, as the "social dimension". My overriding concern continues to be that extensive politicisation will weaken the single market, which for me is the jewel in the European crown. The Social Charter may have been fought off for the moment but it will return again and again to haunt us.
I believe that the Prime Minister deserves special congratulations for withstanding a good deal of bullying and bluster from Monsieur Delors and Herr Kohl. Like union-programmed parrots, they keep repeating a wholly bogus claim. They say that, since the single market gives capitalists the benefit of increased efficiency, it is only fair to give employees the protection of the Social Charter. There is nothing in that. How can producers alone be said to benefit from the enlarged market when keener competition will compel them to minimise costs and prices or go out of business? The logic of free trade is not to make life easier for producers, whether capitalists or workers. Rather, free trade compels producers to serve the wider interest of consumers. And who are the consumers that benefit? Why, none other than the great body of workers and their families. I am tempted to add, "QED".
The second argument for the Social Charter is that minimum wages and uniform conditions of work are necessary for what is called a "level playing field". There is nothing in it. The big idea is to prevent what union spokesmen call "social dumping", which simply means competition from lower cost production.
Any analysis of international trade must start from differences in comparative costs of production
1342
between countries in differing locations, with differing natural or acquired endowments, and at differing stages of development. Wherever labour is abundant in relation to capital or raw materials, it will command a lower wage. The boon of a dynamic free market is that it progressively increases demand for cheap labour, thereby reducing its comparative abundance and raising its market price.
Nor can all that be dismissed as mere theory or, worse still, shopkeeper economics. History confirms the benevolence of competition in action. I recall trade union leaders in my youth denouncing "unfair" competition from Hong Kong and Japanese workers who were said to be paid in handfuls of rice. The predictable socialist clamour was for protection to prevent low-wage foreign labour from undercutting our civilised standards. As your Lordships may have noticed, without any nonsense about social charters but through the magic of imperfect international trade, wages and working conditions in Hong Kong, Japan and other Asian oases of private enterprise have now caught up or overtaken those in many European countries.
That experience leads on to the third spurious argument for a European Social Charter. It is surely transparent special pleading for trade union leaders and their Labour apologists to claim that if Germany can prosper so wondrously with high social protection, it cannot be bad for the rest of us. There is nothing in that. It is a vulgar error much practised by a reincarnated Monsieur Kinnock in another place. It puts the cart of bigger benefits before the workhorse of higher production. By an extension of such logic, sufficient cosseting of African labourers would enable them all to drive around in Daimlers.
Even today's occupants of the Liberal Democrat Benches might agree that the marvellous spread of prosperity since the war has come from opening up national markets to the competition of international trade and investment. Why have China, India, Africa, the former USSR and much of South America lagged behind? They lagged behind largely because their myopic leaders pursued short-term, national protectionism inspired by the same narrow, collectivist cult that now obsesses the ruling political elite in Europe.
In conclusion, we should ponder deeply what kind of madness impels people in Brussels who prattle earnestly in nine languages about subsidiarity, even to contemplate keeping our morning paperboys tucked up in bed at the edict of the Brussels bureaucrats. How can politicians, who choose to work 12 hours a day, six or seven days a week, have the gall to try enforcing on their constituents a maximum 48-hour week? I am prompted to say that it would be much better for the rest of us if politicians throughout Europe were restricted to a 48-hour month. Is it not a precious part of the free society that all of us should choose for ourselves the mix of income and leisure that we prefer?
Whatever our doubts on the Maastricht compromise, let us at least vote down these shady amendments by Europhiliacs who would barter even more of our precious personal freedoms for a place at the Napoleonic court of that dreadful, dreaming, dotty Jacques Delors.
2.34 p.m.
Lord Young of Graffham: My Lords, I must congratulate the Government on the outcome of the Maastricht negotiations. I do not wish to deal with all aspects of the final agreement this afternoon, but I should like to concentrate on two items, one briefly and the other in more detail. At this time I must offer an apology that, although I shall hear almost the entire debate, I may not be able to stay for the final summing-up speeches.
It is a matter of history that we are now in the exchange rate mechanism. I fear that I lost count of the number of times that I came down to your Lordships' House to say that we would enter when the time was right. Well, one fine day that time arrived. But was it then right? This is not a simple matter to judge, and it takes time to measure the consequences. For example, have the results of our entry been that interest rates have been held too high and the recovery delayed, or the alternative—is our great reduction in inflation a direct result of the new system? Instead of being given time to assess the outcome, we were rushed by our partners headlong into a new, untried system of a single currency. That was a vast experiment across an entire continent and the Prime Minister has saved us from all that. I look forward with great interest to see just how many of our neighbours and partners in the Community qualify in 1997, or whether there will even be two countries ready, able and willing to start in 1999. A healthy dose of scepticism is in order when dealing with matters that go to the very heart of our economic existence. It may well be that we shall join one day; but, if we do, we shall know by then that it works.
However, the real disaster averted at Maastricht was the Social Chapter. I was afforded the privilege of serving in the Government during the last decade, part of that time as chairman of the Manpower Services Commission and in the Department of Employment. My job, day after day, was concerned with the evil of unemployment and the need to create jobs. Part of my task was then to defeat what was known in those days as the Social Charter. We did that, and then it re-emerged into the light of day in the new Social Chapter.
There is none in Europe to challenge our credentials as good Europeans. Of the 18 directives in the social field, Germany and ourselves alone have implemented every single one. My noble friend referred to the social action programme where 19 of the 33 measures published have been agreed or adopted by the council or the Commission with our support. Those measures cover health and safety, freedom of movement, equal opportunities, training and employment law.
What was it that we objected to? It was a maximum 35-hour basic working week, not even the 48-hour week. What would that have done for our productivity? It would have introduced restrictions on an employer's right to recruit the best qualified person. Why? Workers' representatives would be imposed—yes, my Lords, imposed—on company boards, and works councils on an EC model would be imposed on us all. There would be new trade union
1344
powers to represent individual workers. It is little wonder that those noble Lords opposite so wanted that chapter included. We would be back in the 1970s when many said that this country was no longer governable.
Finally, in many ways even more serious would have been restrictions on part-time employment which would affect over 5 million jobs in this country. It is not simply by accident that unemployment is a European disease. It is not by chance that France—I shall give but one example—has employment protection for part-time workers and at the same time the lowest proportion of part-time jobs or that we, on the other hand, who do not have that so-called protection, have the highest proportion of part-time jobs.
It was the president of the Commission who, in a well-publicised remark, gave the game away when he complained that all inward investment in Europe would go to the United Kingdom if we refused to sign the Social Chapter. Let us examine just for a moment what that remark means and what it says to each and every one of us about the prevailing attitude in the Commission. To say that we achieve level playing fields in Europe by adopting the highest burden of any member displays an insularity in the heart of the Community that is frightening and bodes ill for our economic future. Does Europe as a whole have a God-given right to enjoy our comparative affluence in this world? No, my Lords. We have to earn it. Our forefathers did so, and we must ensure that our children still can. If Europe cannot be competitive with the rest of the world, its relative standard of living will fall. It is as simple as that.
Perhaps I may give some examples. We use a firm of management consultants in this country. It has a branch in Sweden. Because of excessive social costs, its hourly charges in Sweden are 25 per cent, higher than they are in this country on the same basic salary and overhead costs. In the present conditions, do industry and commerce need that extra burden? Thanks to our Prime Minister, we shall not have it. I believe that a vote of thanks should go from all those employees whose jobs are more secure today than they otherwise would have been.
During my time at the DTI, we were fortunate to attract three major Japanese car manufacturers to these shores. That alone will radically transform our balance of payments before the end of the decade; for instead of importing over a million cars a year, by then we shall be exporting half a million. We persuaded Nissan to double its production, and it was agreed that both Toyota and Honda should establish both an assembly and an engine plant. I know full well the reasons that attracted them to our shores. President Delors was quite right; the excessive regulations and, in the end, the uneconomic burdens in Continental Europe made them choose us. It would be a grave breach of faith if we subsequently imposed those unnecessary costs in the name of an outdated socialism. Would we continue to export cars to Japan? I rather doubt it.
My time is up. I agree with those who accuse us of creating a two-speed Europe. I give thanks to the

1345
Prime Minister and to his colleagues that we shall be in the fast lane—and long may we stay there! I say to the noble Lord, Lord Williams of Elvel, that I shall be proud to be part of the developing country. My fear is that the rest of Europe may not be developing at all.
2.44 p.m.
Lord Murray of Epping Forest: My Lords, opting out of a difficult situation is not necessarily disreputable or to be condemned in all circumstances. There are times when it makes sense to reserve one's opposition; for example, if the future is unclear or if one is not sure of winning support for a particular policy from those you represent. Both those elements were present in the Government's decision to opt out of the EMU and the European currency. They knew that they could not unite their members behind them.
Many people have been in that position. But Maastricht is hardly something for which one can claim a great victory. Whether it is a tragedy will be shown further down the line as events shape the new Europe. It is not a victory and not a tragedy. It bears all the characteristics of a good old-fashioned fudge.
On the other hand, the decision to opt out of the development of social policy is a different matter. That was a decision of principle. I have reservations about the social charter. I certainly do not see it as solving all our industrial relations or social problems. So far as concerns pay, I take it that the best place to settle pay and conditions is as near as possible to the point of production through collective bargaining at plant level. But that is not always possible.
There is a place for national legislation—here I part company with the noble Lord, Lord Harris—to generalise good practices and to stop unscrupulous employers from competing unfairly by low pay and bad conditions. I suspect that I shall have on my side many noble Lords opposite and certainly the noble Lords on this side of the House. There is a case for action at an international level to secure fair competition and what has been rather lightly dismissed as a level playing field—a concept to which the Government have paid lip service but which is held in some regard by the nations of Europe. There is a need for limited international action.
That is why employers from nine countries in the economic and social committee voted for the social charter whereas UK employers—with a couple of Portuguese employers and Spanish employers—were the only ones to vote against it. What company we keep these days! I have no doubt that German employers and the German Government are averse to the broad sweep of their social policies being determined in Brussels. So am I. But they supported, and support, the social charter. So why is Britain the odd man out?
The arguments have been rehearsed in this Chamber this afternoon. They are at best ambivalent and at worst contradictory. We have heard both arguments in the course of the debates during the past week. The first is that the UK is superior to most of Europe and let us stay that way. The noble Lord the Lord Privy Seal advanced that argument this
1346
afternoon. The second argument, which has also been heard this afternoon, is that the UK has a competitive cost advantage, so do not jeopardise it.
When we speak of Britain being in the lead obviously we cannot mean that pay is higher, nor indeed that the legal provisions are better. We have only to look at basic information given to work people at times when their companies are being taken over; at the rights of disabled workers and the rights of women workers; at child care provision, which is the lowest in the EC; at comparative redundancy provisions; and at protection against unfair dismissal. In all those respects we are below the average in Europe.
Where the UK is ahead of the field there is the imposition of legal limits on the right of association which has been condemned within the International Labour Organisation. Certainly we are well behind in excluding work people from real influence over the decisions made by their companies. I shall return to that point later.
We come to the core of the Government's belief; namely, that Britain's competitiveness can best be guaranteed by low pay. That crudely is where they stand. If low pay determines the wealth of a nation, Detroit would be a desert and Delhi a paradise. If we compare ourselves with Germany, on the one hand, where unit labour costs are lower but wages are much higher, or with Greece, on the other, which has half our rate of pay but where unit labour costs are higher, it underlines the nonsense of relying upon low wages.
Of course better performance is necessary if we are to improve pay and social conditions. We need more and better training. I should have been happier had the noble Lord, Lord Young, spoken about the need for that. We need more and better investment, and more and better involvement of work people through their trade unions in accepting their responsibilities in industry. That is the answer to industrial disputes. Give people responsibility and they will tend to act responsibly.
There are certainly problems in moving from a low pay, low productivity, economy to a high pay, high productivity, one. But the solution to those problems will most certainly not be found in opting out of the social partnership approach of our fellow EC members. Nor, in the medium run, will our fellow EC members tolerate that Britain alone should be allowed to opt out of its obligations to compete on the basis of fair employment practices.
2.49 p.m.
Lord Bonham-Carter: My Lords, I shall not detain your Lordships for long when so many wish to participate. On these Benches we agree that the Prime Minister achieved his objectives. Our reservation is a simple one; namely, that the objectives that he set himself were inappropriate for this country and inappropriate for a proper development of the European Community of which we are members.
What Maastricht demonstrated for all to see was the absence of vision and the absence of leadership shown by this country. That absence of vision and leadership, so disappointing and in some respects so humiliating, arose from the decision of the

1347
Government to appease their Euro-sceptics. and led to the negative posture to which my noble friend Lord Jenkins of Hillhead referred. The culmination was what I regard as the disastrous tactic of opting out.
The result has been gravely to diminish the influence of this country in the development of the Community. The great victory announced by the British press has not been reflected or noticed on the Continent, as noble Lords will be aware, although if one reads the Murdoch press one would not believe that there was an opinion on the Continent. However, if one examines the opinion and the Continental response to Maastricht, it was not so much that the United Kingdom was isolated but that it was ignored. It played no part in the constructive process of what was going on. That will continue until we change our attitude to the venture to which we are committed.
We cannot continue in this rather ignominious, negative position, not least because our presidency is shortly to come up and because the European Community itself is on the edge of transformation. From the Six of the past, the Twelve of today will become a much larger body in the next decade. It is essential in our own interests, as well as in the interests of the Community, that this country contributes more positively to those developments and to the process of enlargement than we have done in the past. It is time that we considered matters afresh and gave a lead to our colleagues on the Continent in the development of the institutional structure of the Community and of the criteria of membership which should be applied to those joining. We should be trying to assess the digestive capacity of the Community to absorb new entrants. Those are the issues that face us rather than the pettifogging negative which marked our posture at Maastricht.
A set of institutional arrangements devised for six countries—largely consensual and where voting hardly mattered—is put under great strain when there are 12 When there are 15 or more the arrangements will be totally unmanageable. Unanimity on legislation where there are 17 or more members means, virtually speaking, no legislation. If we are to play our part in this crucial development, which will occur during our presidency, we must play the European game. You do not play it by opting out. One would have thought that we might have learnt that lesson by now.
It has been said on occasions that one definition which distinguishes human beings from animals is that human beings learn from other people's experience. It appears that this country does not even learn from its own experience. We opted out of Messina, and we opted out of the Treaty of Rome. The common agricultural policy was devised in our absence. We opted out of the European exchange rate mechanism. And at Maastricht we repeated the folly. It is folly, my Lords. It is folly in connection with monetary union; and it is folly in connection with the Social Charter.
I do not propose to dwell at length on the Social Charter or its contents. It is perfectly legitimate to disagree with some of its items or proposals. But does one improve it by not being there, by allowing decisions to be taken by the very people of whom one
1348
disapproves, and by failing to support those who support one? Is it not better to fight from within, rather than to observe from without and be presented with a fait accompli which, if the past is any guide to the future, we shall in due course accept? That has happened not once, but again and again, in our relationship with the European Community. We said that it would not work; and it did work. We said that we would not play; and others did play. We were finally forced to accept rules made by others in our absence in which our interests naturally were not taken into account.
That is the lesson which we might have learnt. It is the lesson that we have not learnt. That is why we cannot congratulate the Prime Minister.
2.55 p.m.
Lord Selsdon: My Lords, I do not know why I detect an aura of duplicity and nervousness among members of the parties on the Benches opposite. I wonder whether that is because—with the exception of the Liberal Benches—they have arrived on the European scene rather late. I arrived many years ago when my noble friend Lord Jellicoe appointed me to serve on a committee which was to discuss Conservative strategy and policy for Europe. That was long ago; I forget how many years. I went to committee meetings and made the mistake of once speaking rather forcefully and giving my views. I was told politely, "Look, old chap, you're on this committee because the European racket will take a long time to get off the ground. We need someone who will be alive at the time when it comes to fruition".
I was then given the useless task of trying to promote the EC in Europe: the Conservative group for Europe endeavouring to raise money for a hopeless cause. With our Liberal friends we co-operated very well; but with members of the Labour Party there was nothing but cold water and distress. As we know, they refused to send a delegation to the European Parliament. They said that there was no future in Europe. Now, having done too little too late, they are trying to do too much too soon in some form of amazing technicolour dreamcoat. Perhaps I may quote from Revelations. It is almost as though:
"Because thou art … neither hot nor cold I will spue thee out of my mouth".
The Conservative Party has been committed to Europe for many years. The Government have been committed to Europe for many years. We have been in the European Community for many years. There are a few points of difference but that is understandable if one considers the relevant history and geography.
Industry and commerce do not want the Social Chapter or Social Charter. It is not in their interests. For governments to seek to impose it upon them would be disastrous. If we discuss EMU and convergence there are a few geographical problems that we have not necessarily considered. With the exception of Northern Ireland we are the only member of the EC which has no land frontier with other nations. It is logical that those who have two land boundaries—or in some cases three—are more eager for common currencies than we are. The noble Lord,

1349
Lord Williams of Elvel, said that there is no future for the hard ecu which I support. However, before very long there may be so few hard currencies in the world with which to trade that someone will have to devise new mechanisms.
It is not on the monetary side of the Social Chapter to which I wish to address my remarks but on the political and trade fronts. We are committed to Europe. Attacks have been made against us that we are not playing our full part. Who are "we"? Is it Parliament? In that case I agree that until recently one of the major parties has not given a commitment to Europe. Is it business, trade or commerce? They have been, and are, fully committed and already regard many of those markets as a home market.
When we launched the strategy to support the referendum the phrase used was, "Britain in Europe. It's our business to be there". The businessmen assumed that logic would take place and that our trade would shift, as it has done. We are now at an interesting time; almost a generation has gone by since we began our planning. We have been in the Community for a long time. There is a real chance to take initiatives rather than to look back at the past.
When we speak of the future, not of the European Community but of Europe itself, I believe that in foreign affairs and diplomacy this country can and does lead Europe. Our own Prime Minister has fulfilled a remarkable role in recent weeks. Perhaps we may recall the late John Arlott, who was much respected and revered, by saying that it was undoubtedly a winning innings, backed by a safe pair of hands in Douglas Hurd. We are competent to lead Europe in political matters, whether to the west, the east or to the north. Backed up behind that, we find that in the defence field alone we are probably pre-eminent above all our European neighbours.
Europe is not about economics or geography; it is about people who could be united or who could tear themselves apart. If the Tartars or the Slays were to look at their own history, or if Members of your Lordships' House were to look at their own ancestry, they would see the dangers of the past and the dangers that could arise in the future. It is not for us but for our successors that we must plan, lead and take initiatives in the future.
This morning I had the privilege of attending a service in Westminster Abbey and of sponsoring a lunch in this House for "Children of Courage". A group of Rumanian orphans wanted to see the abbey but were not allowed in. Then the Dean said to them, "You come in, you are children. Come and join our service". Many children and many nations have been torn apart and others may be torn apart in the future. We have a great role to play. I am sorry that the debate should be so extended and I wish your Lordships a happy Christmas.
3.1 p.m.
Lord Jenkins of Putney: My Lords, I am afraid that I have some sad news for the noble Lord, Lord Selsdon. His notion of a Britain leading Europe may be shared by Members on his Benches but it is not
1350
widespread in Europe. Even in this country many people take the view that the role played by Mr. Major was not the kind of "Gung-Ho" business with which he was greeted when he returned. It was in fact a trailing role, or a failure to trail, rather than a leading role.
One of the better summaries of the proceedings at Maastricht was contained, oddly enough, in the Financial Times. An article written by Mr. David Buchan concluded with these words:
"While it may be the biggest step in Community integration in 34 years, the Maastricht treaty will take some selling, even to the most hardened of European enthusiasts".
Noble Lords on the Liberal Benches have already demonstrated that to be the case as far as they are concerned. I am bound to say that if it is hard to sell the treaty to them it must be even more difficult to sell it to a hardened old anti-marketeer such as me. Nevertheless, one must realise that circumstances have changed since, in another place—sometimes faced with a nine-line Whip—we went into the Lobbies and discovered ourselves as one-tenth of each party —at that time that counted as one Liberal, if I remember correctly—and voted against the common market as such.
At that time alternatives were available. When one surveys the scene today one is bound to ask the question: where are the available alternatives? Is going it alone really possible in the world in which we live today? One might even be driven to consider the possibility suggested by the noble Viscount, Lord Tonypandy, that we might become the 51st state of the United States of America. That might be a better alternative to a hardened old anti-marketeer than becoming involved in something like Europe. Even that possibility may exist. Indeed, as has been pointed out, this country is nearer to New York than is Honolulu.
However, if that were not a possibility there were others. I was an EFTA enthusiast, but now its countries are already on their way to agreeing the Maastricht treaty, so EFTA has gone. There was also the Commonwealth, but that is now less of an economic unit than it ever was. I hope that it will always remain a unit in the sense of bringing together countries of different nationalities, colours and creeds. The Commonwealth has a role to play. However, it is not possible to say that it has a role to play of the kind that is now being attacked in Europe.
One must therefore ask oneself what we do in these circumstances. Do we face the fact that the dream of a different, competitive organisation outside the EC is a possibility, or must we go along reluctantly and carefully into an agreement that we do not like? I have never been fond of the Treaty of Rome; as a matter of fact, I do not like it one little bit. At the time it appeared to me to be a recipe for prolonging capitalism beyond its natural life, but the situation has turned out to be the opposite, has it not? Therefore, we must face the condition that exists today rather than the condition that we might wish to be in.
In those circumstances, do we totter along carefully and gently saying, "Well, let us see whether we can pitch a few holes in it"? To some extent that is the role of the Government. In particular, it is the role that

1351
they have played in refusing to adopt one of the few aspects of the treaty which will engage most Members on this side of the House; that is, the Social Chapter. It is that which suggests to me that the Government have been altogether wrong-headed.
I come to the conclusion that in international relations it is necessary to be enthusiastic. Half-heartedness is not on. If the situation is, as I believe it to be, that in today's circumstances no alternative role is available to us, if we go in to Europe we should do so wholeheartedly. That is where the Government have failed.
That brings me dangerously close to supporting the amendment tabled by members of my own Front Bench. I hope that they will not take that as a precedent. However, I am bound to say that on this occasion, by different courses, we have reached the same conclusion; that we must say to the Government that they have been insufficiently enthusiastic. If we want to join and to make the new organisation in Europe more in accord with our own wishes we must do so enthusiastically, from the inside. For that reason I find myself in total support of the amendment tabled by my noble friends on the Front Bench.
3.8 p.m.
Baroness Elles: My Lords, I must confess that I warmly welcome some of the remarks made by the noble Lord, Lord Jenkins of Putney. I now understand that he is a most convinced European marketeer. In fact, he might come under the heading of a Europhiliac, a term used earlier in the debate. We have been part of Europe for more than 20 years and would have been grateful for the noble Lord's support during that time. However, converts are always welcome.
I endorse the Motion proposed by my noble friend Lord Waddington congratulating the Prime Minister. I congratulate too the Foreign Secretary, the Chancellor of the Exchequer and all the civil servants who have worked so hard during the past months in order to obtain a satisfactory agreement. We have gone through the democratic process of consultation and negotiation. The triumph has not been in the negotiation but in Britain and the 11 other countries reaching a satisfactory agreement at Maastricht. It will direct the future of the whole European Community. It is not only a victory for Britain but for the other 11 member states. The comments of the noble Lords, Lord Williams of Elvel and Lord Bonham-Carter, that we were outside and not totally taking part contradict everything that I have read and heard about events at the Maastricht Summit and those which occurred previously. Every time I travelled to Brussels, my fellow passengers included civil servants, government officials and Ministers going there to speak for Britain and Europe. It is nonsense to say that we were outside the negotiations: we were at the heart of them.
A great tribute was paid to my right honourable friend the Prime Minister in an extremely federalist report published daily which stated that his diplomatic skills and political ability saved the situation for Britain and enabled the conclusion of a satisfactory
1352
agreement. At the end of the negotiations my right honourable friend was respected, admired and—I use an ordinary word—liked by all the people of the 12 member states with whom he worked. That is a triumph worth recording. It will be the basis on which the future negotiations and the process of the EC take place.
Westminster benefited from an open debate and discussion in another place on 20th and 21st November when my right honourable friend set out his objectives as regards the objections to the draft treaty. Interestingly, we hear now that in a number of other countries there is considerable disquiet and anxiety because they did not have such discussions. They are suddenly discovering what their Ministers and governments signed on their behalf without any consultation. We must take that into account when noble Lords opposite say that we have been outside the discussions. Not only have we been part of the discussions but the people of this country were consulted before the Government took part in the negotiations.
Over and over again one reads in the French, German and Italian press that there have not been consultations. I believe that 97 per cent. do not wish the D-mark to turn into the ecu and over 50 per cent. of the French do not want a federal future for Europe. Therefore, we can be doubly grateful to our Prime Minister because he had the courage—indeed, the guts—to discuss in Parliament his objectives and to gain the endorsement of the British people.
The Opposition Front Bench has spoken about opting out but equally we are opting in to a single currency. We have an opportunity when the time comes to decide whether or not it is right to adopt a single currency. We are included in those discussions; we are not excluded, as some noble Lords like to imply.
Thanks to the British Government, there was insistence on criteria for convergence so that member states which join will know that they are economically and financially able to bear the strains and difficulties if they decide to adopt a single currency. It is typical that many European bankers are now extremely anxious about the way in which the treaty has been set out in regard to EMU. I have heard that because of the general federal declarations of the Italians in European politics, Italian Ministers are now desperate because Italy is one country which will almost certainly not be in a position to join a single currency in 1999. It has said already that it will take at least two parliaments to reduce its public deficit. In Italian terms, that is 10 years. Therefore, let us be thankful to the British Government not only for saving our position but also that of other member states.
Should the Labour Party by any extraordinary chance come into government at the next general election, are its members prepared or do they intend to renegotiate what that party calls opting out? The Opposition seem keen to opt in and to inflict a single currency on the UK without any consideration of whether or not the country is ready for it. If the Labour Party does not propose to renegotiate, should it form the next government, is it proposing to table

1353
draft legislation before Parliament supporting the present text of Maastricht; that is, supporting the fact that there is an opt-out clause or an opt-in clause, however one likes to regard it, in the treaty? Of course, that will be the task if Labour is in government.
Noble Lords have referred to the Social Chapter. I endorse totally what my noble friend Lord Young of Graffham said. However, there is one further question which I should like to ask the Labour Party. Would it have supported a federal goal? It has attacked my right honourable friend the Prime Minister saying that he fought against the use of that term. Would it have supported it? We need to know.
Let us stop this party bickering and recognise that the European Community, as the world's largest trading bloc, has immense influence that it can bring to bear on the future not only of our Continent but of the world. It has a duty to influence the future of that world. Our debate today has so far consisted of an attack on my party. It has been said that it is divided. I suspect that this side of the House will show that it is totally united both behind the Motion of my noble friend Lord Waddington and my right honourable friend the Prime Minister.
3.15 p.m
Lord Clinton-Davis: My Lords, it is because the Conservative Party has the views which have just been expressed by the noble Baroness, for whom I have a great deal of respect as a former Member of the European Parliament, that the Christian Democrats will have nothing to do with it. It is absolutely right in that regard.
However, the representations by the Government and their sycophantic supporters in the press about what resulted from Maastricht—in particular on the issues of the common currency and the Social Chapter—have been garbled and inadequate where they have not been simply false. They have sought to foster an illusion of Britain's inviolate sovereignty while evincing no vision, as the noble Lord, Lord Bonham-Carter, said, of the role that Britain could positively assume in moulding the new Community. They have an invincible incomprehension—almost a Van Gogh's ear—about appreciating what the Community really stands for. They have preferred, as they did under the previous Prime Minister, to sterilise real progress, albeit less stridently. That Mrs. Thatcher should have said that the results at Maastricht had "thrilled" her, says it all.
Conservative efforts to avert or at least to delay an EC commitment to a single currency have failed despite the risible protocol to the treaty. Of course it is sheer fantasy to imagine that Britain could be left out of those developments. However, the price of the Government's negotiating stance could, if they remain in office—which seems unlikely—be excessive. Notwithstanding what the noble Baroness has just said, they will have lost all bargaining leverage as regards the shaping of the timetable for monetary union and its institutions. They will certainly have forgone the possibility of the City of London as the site for the central bank.
1354
As regards the Social Chapter, this Government are replete with charters about this, that and everything but never the Social Charter. Their plan was to veto any extension of social policy in the Community. Their ideological posturing has simply led to the other members states creating their own framework of social policy. They refuse to see those issues in the crude and exaggerated terms perceived by this Government. A low-wage, poorly skilled and declining manufacturing base is rejected as a design for an efficient, competitive and exemplary Community. Those other member states have no appetite for modelling themselves on Britain, which has the highest proportion of low-paid workers—including many women and young persons —in the Community. They see the Community as a true community based not only on refining markets but also on improving the quality of life. That is what the social dimension and the environmental parts of the treaty are all about.
How valid are the Government's claims about Maastricht? I remind the Leader of the House that the original treaty sets out the objective of the Community as harmonising the standard of living for workers and it envisages legal or administrative action to secure that goal. Perhaps the noble Lord will look at Article 117 of the treaty.
The Commission is invested by Article 118 with the duty to promote close co-operation between member states in, among other things, matters relating to employment, labour law and working conditions, social security and the right of association and collective bargaining between employers and workers. That has been completely ignored by the Leader of the House.
There is also a duty on the Commission to promote dialogue between both sides of industry, and that appears in Article 118B of the Single European Act. The principle of equal pay for equal work is contained in the original treaty. The articles are not and never were confined to health and safety at work, as the Government constantly pretend. The Tories signed up to all that in 1972 and, to give him credit, the Prime Minister of the day has never shirked that issue. But they also signed up in 1986 for the Single European Act. That is a true case of selective amnesia.
Maastricht will see the further development of all those ideas and Britain cannot remain unaffected by those issues. We should not be excluded from the deliberations. I do not believe that the noble Baroness is right in the optimistic and rosy view she takes in that regard. We cannot say on the one hand that we will have nothing to do with the Social Charter and then expect to be taken into the counsels of the rest of the member states. Multi-national enterprises will operate right across the Community. I therefore do not believe that it can be right that employees should be denied the opportunity to bargain over wages and conditions on the entire European stage. My last point in that respect is that the Government have, by adopting their extraordinary position on the Social Chapter, rendered the United Kingdom vulnerable to attack under European Community competition law for providing illicit state aids.

1355
I want to say something in regard to law enforcement; the Government often talk of law and order. I agree that no Community can operate properly without respect for the law. But, in the Community context, what do the Government say about it? In his Statement to the House of Commons on 11th December the Prime Minister said,
"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".—[Official Report, Commons, 11/12/91; col. 861.]
In other words, the court did not find the Commission's choice of legal base to be dubious. It found against the Government; the Government lost. When the Government have broken European Community law, particularly environmental law, they assert that others do the same. That is not a respectable legal argument. The Government broke community directives on bathing and drinking waters, on the protection of precious habitats and almost certainly on environmental impact assessment. That is perhaps not surprising from a Government that boasts a present Home Secretary who has been condemned by the courts for being in contempt.
The Government say that they are the prime movers in conferring on the European Court of Justice the power to fine aberrant member states. However, they have only done that to avert the much more radical measures which are clearly needed to uphold the law, particularly environmental law.
3.23 p.m.
Lord Gladwyn: My Lords, if the Prime Minister is to be congratulated on anything, it is on his good humour persistence and skill in achieving a result in Maastricht which was capable for the time being of substantially reconciling the profound differences within his own party. Those differences are between those who genuinely look forward to an "ever-closer union" of European states and those who do not conceal their detestation of the whole idea. Let us look for a moment at the chief features of this remarkable achievement.
First, the successful omission from the treaty of the word "federal". But that was a meaningless triumph. I suggest we would have done better to let it stand, at the same time explaining that, in our view at least and giving our reasons, it did not imply the emergence of anything like the United States of America and the transformation of Great Britain into the equivalent of New York or Pennsylvania.
Next, the recognition of our right to "opt-out" of an eventual monetary union. However, it seems that by 1996, (unless I am wrong) only those who achieve the necessary degree of "convergence" of their economies—and they will no doubt be a majority of the Eleven—will necessarily go along with the idea in the event. If, as is devoutly to be hoped, we qualify on "convergence", it would surely be madness for us not to go along also.
It is true that no Parliament can bind its successor; but what prevented us from saying that we accept the present plan for gradually achieving monetary union by the end of the century, and that we will do our best to see that one day it comes about? By definitely
1356
opting-out we give the impression, as the noble Lord, Lord Clinton-Davis, has just said, that we are opposed to the whole conception. We therefore prejudice, when it comes to the point, as it surely will, the selection of London as the site of some sort of European Central Bank or Federal Reserve.
Finally, we had the equivalent of an opt-out of the whole Social Chapter, by agreeing that it should not form part of the treaty and that all who wished to do so should in some way work together to see that something eventually comes of it. That is a curious and legally doubtful arrangement. As is known we accept around three-quarters of the Social Charter but find difficulty in accepting a few other clauses, notably that regarding employment.
However, our attitude on that admittedly rather vital matter may change, more especially if the recession continues and we come to see more virtue in the German labour policy, which incidentally, we persuaded them to adopt in the years following the war. It would have been wiser therefore to have signed the Social Chapter but attached a note to the effect that we could not guarantee that some future British Parliament would necessarily accept all the eventual emerging legislation
Generally speaking, we must all surely admit that recent events have changed all the prospects for European union—perhaps for the better, perhaps for the worse. We cannot yet be certain that there may not still emerge some rather sinister power in the East. But assuming that it does not, can we really contemplate without alarm some close association with Western Europe of 15 ex-Soviet (including five or six Moslem) republics? Not even Europe, "from the Atlantic to the Urals"—which could itself scarcely have an identity —but Europe, "from Lisbon to Vladivostock"!
For this century it will, I suggest, suffice for the Twelve to be joined by the five or six EFTA countries, and even that will probably imply a rather different form of association than that which presently exists. For the rest we can certainly welcome some progress in regard to European defence, some increase in the power of the European Parliament, and in certain other matters duly mentioned by the noble Lord, Lord Williams of Elvel. We can also welcome the general atmosphere which bodes well for the success of the next major conference in a few years' time—the world economic and political situation permitting. But that is about all that can be said for Maastricht. It was certainly not that great advance towards European union that friends of the latter hoped, and its enemies feared, would be accomplished.
3.30 p.m.
The Earl of Selkirk: My Lords, I am very glad to speak after the noble Lord. I did not hear particularly well what he said, but I look forward to reading what he said tomorrow. He spoke from great and wide experience. My noble friend Lady Elles said that we had not taken enough part in what was happening in Europe. When France was in real difficulties, what did we do?—
Baroness Elles: My Lords, I apologise for intervening, but I said the opposite.
The Earl of Selkirk: My Lords, very well. When France was in real difficulties it was Winston Churchill who, with Mr. Attlee and Sir Archibald Sinclair, went down to Portsmouth, got into a boat and thereafter offered to make an indissoluble union with France. We did that when it was really necessary. I, and I believe many others, have been confused at the way things have gone. It is strange to me that the problem started with Jean Monnet's interest in dictatorship. He said that that must be stopped. I believe that that is a view which everyone in this Chamber would endorse. We should try to work out what he thought could be done through a large area of unanimity in Europe.
Jean Monnet was a merchant who did a marvellous job of the highest order for this country during the war. Properly and rightly we gave him the highest award that we were able to give in recognition of what he had done. In fairness I must say that he was not a politician. He had not experienced personally democracy as such. Curiously enough, I discovered only yesterday that the book he wrote called Les Etats Unis de L'Europe is not available in the Library either in English or in French: neither is there a copy in the Commons Library in either English or French. Alas, I cannot say I have read what exactly he had in mind.
However, it is clear what he had in mind. There should be the highest degree of unity which can be gained by ourselves. Perhaps I may comment on that. We have had democracy in this country for 700 years. We also have what we call the Commonwealth consisting of 50 countries, all of which, as far as I know, are democractic. Should we not offer to give those who are in charge (I do not know exactly who they are) some advice not only as to the theory but the practice which we have had over centuries in this particular form of government? We should not take it for granted because democracy is a very difficult form of government. It needs experience and men of high quality and I say that willingly to my noble friend the Leader of the House. It is right that we should make that contribution. I am aware that we have done a great deal already in the European Parliament, but we have to try to do more.
We have to go ahead with our share and contribute. Now is the time to make the shape before a united Europe starts. It is no good waiting until everything has taken form. We must make our contribution now when it really counts.
3.32 p.m.
Lord Bruce of Donington: My Lords, it has not yet been possible to go through all the documents that have resulted from Maastricht. There are a vast number of pages and clauses. It will take some time before one is able to assimilate the amendments that have been made. I wish to confine myself therefore to two aspects of the treaty which may not be of so much interest to the banking and financial institutions and the large conglomerates of the United Kingdom who
1358
expect to derive some benefits from what has happened. I wish to dwell on the effects on ordinary people.
As I went through the documents, at page 21 of the summary which was issued, I found the heading "Agriculture". There it says,
"Articles 38 to 47 unchanged".
I am occasionally guilty of being in complete agreement with my own Front Bench. I agree entirely with the observations that fell from the lips of my noble friend Lord Williams of Elvel. Here we had an inter-governmental conference with, presumably, everything to play for; everything on the table. The Treaty of Rome, as amended by the Single European Act, contains Articles 38 to 47 of the treaty on the common agricultural policy, and they survive. Now, once again, we find that, despite the unprecedented opportunity to effect some change in the common agricultural policy, no effort was made at all. It is quite inexcusable that at any inter-governmental conference where such a chance is presented no action is taken.
We are talking now not of the bankers, the financial institutions and the large conglomerates, but of the ordinary people of the United Kingdom. It is common knowledge, on the basis of the Government's own figures, that the CAP is costing every family of four anything between £12.50 and £16 a week extra. That is a burden on all the people of the United Kingdom and it bears particularly heavily on the poorer sections of our community.
In addition, we are all, including the poor, taxpayers. Taxpayers do not merely include, as a matter of convenience, income tax payers; but they also include VAT payers. The country as a whole has to bear an extra £2 billion a year net, after all receipts, by way of contributions, together with Germany, to the European budget. Was it too much to expect the Prime Minister to raise the matter and to seek for some changes on the common agricultural policy to be incorporated into the treaty? I understand that the CAP has very few friends outside the present Minister of Agriculture. It has very few friends even within the Tory party.
Why, at an inter-governmental conference, was this subject not dealt with? I make no imputations. But it is a fact that members of the Government themselves are direct recipients of money under the common agricultural policy by reason of the set-aside provisions. Many instances were given in the Sunday Times a fortnight ago. I repeat that I am not suggesting that that fact had any influence on their judgment. But it might be wise occasionally for such interests to be declared so that we know exactly where we are.
The next point as regards finance relates to fraud. That is intimately concerned with the common agricultural policy. Therefore, I would have expected some changes to be made in the whole function, powers, and financing of the Court of Auditors. In his opening statement the noble Lord said that its powers had been enlarged. I am quite willing to give way to the noble Lord. I have the text of the documents in front of me. Perhaps he will point out where the

1359
powers have been increased because they have not. One new, innocuous paragraph has been added and the words,
"in the form of special reports"
have been inserted in Article 206 a 4.
The Court of Auditors was instituted in 1977. It is very poorly financed. It should have its own budget and be completely independent of the Commission or anybody else. It should have its budget approved by the Council of Ministers. That is not the position today. Moreover, a situation in which the auditors' annual report has to wait for publication before the Commission replies delays it by six months. That is an intolerable position and should be altered. It would be like a board of directors in the United Kingdom having the right to incorporate in its report and accounts its own observations on the auditor's report. I warned the noble Lord about this a long time ago. The matter ought to have been insisted upon by the United Kingdom as a condition of its support.
Those are two matters only, but they are matters that should be attended to, particularly the finance matter. The Court of Auditors needs double the resources that it has at the moment. The Council of Ministers, with the agreement of the UK, approved a special grant of £30 million to the Commission in order to establish some financial control. That ought to have gone to the Court of Auditors. Those are matters which the Government should have raised and insisted upon but they chose not to do so. I cannot therefore endorse the results of the Maastricht conference.
Lard Waddington: My Lords, before the noble Lord sits down, surely he would concede that Article 206a is a new article which strengthens the powers of the Court of Auditors.
Lord Bruce of Donington: My Lords, I do not so concede. If the noble Lord refers to the article, on page 91, he will find the only new item. It states:
"The Court of Auditors shall provide the Council and the European Parliament with a statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions".
That is the only amendment to Article 206. It confers no new powers.
3.41 p.m.
Baroness O'Cathain: My Lords, it is right that this House should warmly endorse the agreement secured at Maastricht and congratulate the Prime Minister on securing all Her Majesty's Government's negotiating objectives. It would also be right to include in the congratulations, as did the noble Baroness, Lady Elles, the other Ministers and officials. I am afraid that too often we tend to forget the hard, detailed, concentrated work and long hours that such agreements involve.
I am probably not the only member of your Lordships' House who viewed the prospect of Maastricht with concern, foreboding and, indeed, irritation. The first two emotions are acceptable, the third not. But irritation was, I feel, inevitable when we listened to the endless criticisms of what was likely to be the outcome even before the Prime Minister and his
1360
team had climbed the aircraft steps en route to the Netherlands. We had pages and pages of dire speculation in the newspapers, endless hours of punditry on the TV and radio and, indeed, in both Houses of Parliament. To stronger mortals probably none of this mattered—to me it was depressing. Yet, at the end of the meeting and reading the extensive coverage of the details the following day, I felt moved to thank God that vision, commonsense and co-operation appear to have been restored to the European issue.
In the mid-1950s I spent some time at a school in Brussels; it was a time of amazing hope in Belgium. The outward appearance of Brussels was dingy and drear; the places we went to on school outings—for example, Dunkirk—were more than dingy and drear, they were still littered with bomb sites, broken bridges and depressing decrepitude. Yet the spirit of the mainland Europeans was contagious. They had embraced the idea of the European Coal and Steel Community and were well on the way to the beginning of the wider alliance—the European Economic Community.
To an impressionable teenager, the concept of a Europe where there would be no more Germans killing French, Belgium being occupied and innocent children like Anne Frank hiding in an attic for all that time in Amsterdam, was something that had to be right; it had to work. It was a vision of the future that appealed, and appealed enormously. So much so, I subsequently chose my degree subjects of economics and French with the deliberate target of working for the EEC—it did not happen. I, too, became a victim of the in/out/in débacle of the 1960s and 1970s.
We all know what happened. The vision lost its lustre. At a time like this when congratulations are in order there is no point in stating why the vision lost its lustre nor, indeed, who or what was to blame. Suffice it to say I fear that all of us were in part to blame. I, a hard-working businesswoman, in the course of my career have had what seems like endless years of niggling discussions and negotiations in the Berlaymont and have fallen into the trap of sometimes wishing the European Community had never been dreamt up in the first place. Many is the time I travelled to Brussels not as a visionary but as a hired hand with the objective of making sure that my particular special interest was not going to be done down. I made the age-old mistake of allowing my immersion in the detail to cloud my judgment of the whole.
To me the most exciting result of Maastricht—and I use the word "exciting" advisedly—is that once more the sense of vision has been restored. Whatever the problems in the past we can now play a constructive role in the fashioning of the European Community of the future. This is vitally important at a time when we want to welcome the EFTA countries; when we want to welcome those countries who have so courageously thrown off the communist yoke. All member states have to be flexible, accommodating, and prepared to see the other person's point of view.
The European Community has achieved a great deal for the citizens of the member states but there is

1361
a great deal still to be done. Reference has been made today to the common agricultural policy. I have already spoken in the House on what matter and I am aware that people are going to try to ameliorate that situation.
Doubtless all the many speakers in today's debate have very specific issues on which they want to comment—causes of concern or just issues of congratulation. Lest it be thought that I am euphoric about the outcome to the extent of not seeing any problems, perhaps I may voice just three points.
First, the spectre of the Social Chapter caused a great deal of grave concern in business, probably not wholly justified but a serious problem nonetheless. Even since Maastricht I have heard that "Brussels"—noble Lords will probably know that "Brussels" is shorthand for the Commission, the European Parliament, the Council of Ministers or just "them over there"—is getting the nastier bits of the Social Chapter introduced "through the back door" under the guise of health and safety regulations. All who have responsibility for organisations that employ large numbers of people with the objective of satisfying customer demand are once more likely to be thrown into despair and adopt an anti-EC attitude.
If rules governing working hours come into effect through this back door method, I wonder how my customers will cope with the situation where Slava Rostropovich plays the first two movements of the Elgar cello concerto but as he has just clocked up 48 hours in practice, rehearsal and performances since the beginning of the week, has to hand over for the final movement to Yo-Yo Ma. Or, if Anne-Sophie Mutter plays the first movement of the Beethoven violin concerto and is replaced by Nigel Kennedy for the remainder of the work, what would be the reaction? I fear I would not have too many sold out concerts at the Barbican Hall.
Surely those of us who want to work beyond 48 hours per week —and it must include everyone in this House—should be allowed to do so. That point has already been well made by the noble Lord, Lord Harris of High Cross. I am raising the same point not as a matter of detail but to implore those who have the responsibility to negotiate on a continuing basis to use their best offices to ensure that we do not lose one of the major achievements—no pun intended—of Maastricht; namely, a greater understanding of the hopes and needs of each citizen.
My second point is triggered by the use of that word "citizen". I rejoice in the fact that we will all be citizens of Europe while maintaining our separate national identity. But my rejoicing is somewhat reduced by the realisation that there are so many people in the United Kingdom who have chosen to make their home here, who have chosen to bring up their families here and have, in effect, chosen our way of life and lead lives of good law-abiding citizens, paying taxes, yet who are deprived of voting rights. I refer to Australians, New Zealanders and Canadians, among others. My Australian friends feel even more
1362
isolated now. Is there not something that could be done to eliminate their feelings of being "second-rate"?
My third and final point is that progress on the development of the British role in the European Community will not have been fast enough for some, yet too fast for others. Is it inconceivable that party differences could be consigned to a lower level of importance while we all use the Maastricht agreement as the basis for a going forward together? I thank your Lordships for your attention.
3.50 p.m.
Lord Boardman: My Lords, I am grateful to the noble Baroness for reminding us briefly of the history of the events leading up to Maastricht, right back to the days when a Community was first a thought in the minds of some Europeans. I join her also in the congratulations which have come from her and from noble Lords on this side of the House to the Prime Minister and his team on the quite splendid job that they have done. It is a splendid job not just for the United Kingdom but, as my noble friend Lady Elles said, one which I believe is for the benefit of Europe as a whole. It has stopped, or checked at any rate, the rush to a federal centralised Europe, which indeed the early draft treaties were leading towards. I do not say that we shall not have a federal Europe in due course or that we may not be part of a European central bank and so on, but that must come about as the result of evolution. We may be involved in creating those kinds of structures and may join them but this should not follow in response to demand or dictation by leaders of other nations or indeed by the president of the Commission. Each had his own purpose for wanting the structure which was first put forward. None of them has been elected on that platform. It is interesting to note that, apart from Denmark and the United Kingdom, none of those leaders seem particularly concerned about consulting their own electorate or, in some cases, their own Parliament.
Criticisms have been made about the UK having the right to opt in. Certainly I do not believe any criticism can be made by our partners in Europe, because it has no effect upon them. It is not like the situation when France opted out of NATO, which, as was mentioned in The Times yesterday, caused great disruption throughout the whole of Europe. I believe that we were entitled—indeed we were right—to achieve that option. Some Members on the Benches opposite have said that we are the losers as a result of the agreement reached at Maastricht. But, as my noble friend Lord Young of Graffham reminded us, it was Jacques Delors who said how much we would gain by the attitude we took at the time.
On the question of monetary union, I believe that we have the best possible position. We shall be fully involved in all the discussions and the shaping of the EMU. We shall help to design it. We shall be able to see what effect its development will have. Then, and then only, need we decide whether we wish to join. What position could possibly be better than that? I wonder whether the noble Lord, Lord Jenkins of

1363
Hillhead, has read what was agreed at Maastricht. He referred to our being committed to join without having an opportunity to consider the terms. The position is just the reverse. I commend to the noble Lord a reading of what was agreed at Maastricht.
If the Labour Benches had been in a position to secure, and had secured, such terms as were achieved by the Prime Minister at Maastricht, I believe that they would be jumping with joy. I do not believe that the Government should accept any criticism from the Labour Party on the negotiations. The Labour Party has changed its mind on Europe six times in recent history—from opting in and from opting out altogether. Its position on the agreement is, I believe, unfortunate. Each time it has changed, it has done so with the misguided expectation that perhaps there were votes involved. That was wrong. It is very sad today that Members of the Benches opposite are adopting something of the same tactic with the amendment which has been moved.
The latter is a most insipid amendment. It represents, I suppose, very much a "willing to wound and yet afraid to strike" attitude. I can only speculate as to whether the noble Lord was reluctant to put into an amendment where the Labour Party really stands; it is matter that I shall leave to him. Surely, if he felt that we should have signed up and signed up for a single currency there and then, he would have said so.
Electorally, in this particular case, I believe that Members on the Benches opposite are wrong. If they had recognised that the Prime Minister's team did a first class job in Europe—and had had the honesty to say so (I think that many of them, if not the noble Lord. Lord Williams, believe it) and if they had had the graciousness to praise the Government on their quite exceptional achievement, I believe that it would have done them good. They would have gained from it. I hate doing them good on that score, but that is what I believe. They should have done that instead of confining themselves to a whole range of nit-picking criticisms. That exposes them to being seen as jealous of the Government's success and of the skill of the Prime Minister.
Those who criticise the Government and the agreement reached at Maastricht should read what was agreed. From the different speeches that I have heard from the Benches opposite, I do not believe that the agreement has been read. If they read what was proposed, not only in the treaty that was agreed, but in all the various drafts before that, which would have gone through but for the firm stand taken by the British Government, they will see to what we should have been irrevocably committed had we accepted the line of the Liberal Democrat Benches and signed without qualification. We should have been committed to joining a European central bank with all that would flow therefrom; for example, the powers handed over from the Treasury to the Bank of England to six men appointed for eight years by the Council of Europe. To me, those are quite unacceptable conditions.
We live in a rapidly changing world. There will be the expansion of the Community. I hope that it will be an expansion which will come about in the relatively
1364
near future. We are going into a new world scene, certainly a new European scene. We owe thanks to the Prime Minister and his team, who have wisely and well safeguarded our position.
3.56 p.m.
Lord Houghton of Sowerby: My Lords, I find all debates on the Common Market, and our part in it, acutely disappointing. Some of us have been at it for the past 25 years and here we are, 18 years after our accession to the Treaty of Rome, still undecided as to where our path lies. Sometimes I think that, if Britain had the spirit, the determination, the talent, the resources and the guts to stand alone, it would be better to try to do so. We should be happier that way. We were happy when it happened. However, we revel in the Dunkirk spirit in the Common Market as in the European conflict. We have had the brake on all the time since we joined it. The other members want to go too far too fast and we want to hold them back. In the end, I believe that we shall probably wreck the Community or we shall find ourselves left alone on the beach.
The speech of inspiration to me this afternoon was that of my noble friend Lord Clinton-Davis. It mixed the practical experience we have had with a vision of what we were hoping for, from the point of view of the workers of Britain and the economic health of the country, in joining the European Community.
I view with grave dismay what has happened about the Social Contract. That is far more serious than our check upon the single currency proposal. That will last out the century. We have encouraged a movement in the Community which bids fair to break up the formal structure of the Community and create side activities outside of it. It is difficult to see how agreements reached between 11 nation states will ultimately be channelled into the Community system, either comprehensively or in instalments. Where are we going? What do the Government envisage as the part that Britain will play in the conversations which will be held by the 11 who want the Social Contract? Will we take part in them? Will we have any say in how the others formulate their attitude towards that matter, which is an important one for the whole of the Community? I want to know where our trade union movement is. We have heard nothing from it.
The Earl of Caithness: Oh yes you have!
Lord Houghton of Sowerby: My Lords, the CBI tells us all the items with which it is in agreement and how far it thinks it has obtained its negotiating objectives. What about the trade unions? How do they feel about it? I remember, as does my noble friend Lord Clinton-Davis, the setting up of the Bullock Committee to study the structure of industrial relations in Europe. It published a report. It had dissenting voices from employers, but it laid the foundations of the big debate on the future of our negotiating machinery and the place of the trade unions in industrial activity and management. It all withered away. The unions did not want anything in place of strife. They did not get anything in place of strife.
Lord Hailsham of Saint Marylebone: They wanted strife.
Lord Houghton of Sowerby: My Lords, they have been subdued by the Conservative Government during the past decade. They have not been pacified. They have not been offered a larger role in the nation's affairs; they have just gone sullenly quiet due to a mixture of repressive legislation and widespread unemployment.
Yet those of us who studied the European system closely, as I did in 1973, found there the foundation for co-operation which the Germans started in 1919, and which has become the general pattern of European trade union and industrial activity. We nearly achieved it in Britain. We nearly achieved it in the Whitley Council report of 1919, but the trade unions were as apathetic then as they were later. There was something then in the system—probably the political divide as between the concept of a socialist society and a mixed economy—which held people back from wanting to co-operate.
Now that we have rejected socialism as a panacea for all the evils of society, where do we go? What is there? Who is putting it there if there is anything? At present there is a complete void on how we will harness the workers of Britain to the new movement that is necessary to improve our competitiveness and get us a place in Europe. There is no sign of anything happening at the moment that will give us any satisfaction.
I watched a programme at lunchtime on Sunday about Japanese investment and the foreign control of industrial development in Britain. It was frightening. We are becoming an occupied country. There are a number of other countries which will become occupied. Australia will finish up an Asian republic. That is just as inevitable as it is that Britain will have to finish up in Europe if it is to exist at all.
Great events are happening in the world through the migration of industry and capital, springing in some measure from the spread of oil revenues and the tribute exacted from the petrol users of the world by the Middle East suppliers, which has undoubtedly put a great many nations into serious financial difficulties.
I said a little while ago that the three growth industries in Britain were fraud, charity and lending money; and that is about it. There is no comfort to Britain in the Prime Minister's negotiating objectives which he took to Maastricht. That is how I see the position. We need a big shake-up in Britain today. Our trade union movement should become alive to the opportunities that are waiting to be taken.
4.4 p.m.
Lord Ezra: My Lords, it is always a great pleasure to listen to the noble Lord, Lord Houghton of Sowerby, who speaks with remarkable oratorical skill, a fund of memories of past experiences, and deals in a forthright manner with present events.
There is no doubt that the treaty which we are considering today is of historic importance. That is clearly stated in Article A of the draft that we have. That states:
1366
"The Treaty marks a new stage in the process of creating an ever-closer union among the peoples of Europe, where decisions are taken as closely as possible to the citizens".
That is the basis upon which the whole negotiation took place.
We are in this debate especially concerned with the negotiating posture and objectives of the British Government. From my experience over many years in the Community, I have found that whereas our Continental friends see things in a visionary and idealistic way, we tend to see them in a much more practical way. Our big contribution has been to bring practicality to their vision. In some respects, that has been achieved in the treaty.
Like the noble Lord, Lord Williams of Elvel, I should like to start with the matters that have been positive due to our intervention and then move on to areas where I believe that our interventions have been less positive. There are three areas upon which I am pleased that we placed considerable emphasis. The issue of subsidiarity is one that has cropped up for many years in our discussions in the Community. It is something which needs careful definition. As a broad statement, everyone will agree with it; but we are worried that Brussels might go beyond what we would normally consider to be the bounds of subsidiarity and decide things there which would be better decided at a lower level. However, when we talk of subsidiarity, I do not see why we should look at it in European terms only. I should like to see the principle of subsidiarity applied in Britain. Should we not be having a look to see whether central government in Whitehall, let alone Brussels, do more than they should do?
In the forthcoming review of local government, should not one of the instructions to the Commission be that it should have regard to the principle of subsidiarity? We have a great deal to learn from that; and I am glad that we placed emphasis upon the greater definition of that issue.
Secondly, I am pleased that we emphasised the importance of enforcement. It is generally agreed in the Community that we are one of the countries which does most to enforce Community regulations once they are issued. I happen to be closely involved with the trading standards administration. We have some of the best trading standards in Europe. We apply them the most effectively. I was involved in a discussion in Brussels recently where we put that point to the Commissioner concerned. He accepted that the enforcement of standards was something that was lacking in many countries in the Community; and so I believe that we were right to emphasise that aspect.
Thirdly, I believe that we did well on the principle of convergence. The concept of economic and monetary union is one that has been debated in the Community over many years. It is not a new concept. It was at one time thought that if we had a single currency, it would automatically lead to the convergence of economies. But we, together with the Germans, have persuaded the rest of our Community colleagues that that is not so and that we must have convergence first. That has been accepted. It is written into the treaty. I regard those as three positive aspects of our negotiations.

1367
What I find unfortunate is, that having achieved so much—those are just some of the areas; there are others as well —we then spoilt the whole thing by putting too much attention on our reservations about the single currency and the Social Chapter. I find it difficult to understand our reservations on the single currency, having convinced our colleagues that convergence was an essential pre-condition. I do not know whether your Lordships are regular readers of the Economist. In it last week a table was shown indicating which countries are at present most convergent—that is, most in line with the conditions laid down in the treaty. In fact, Britain scores three out of four points already. It is most likely that, if present policies that the Government wish to pursue and Opposition parties also wish to ensure—low inflation, not excessive budgetary deficits, and so on—are achieved in the year ahead, we would be totally in conformity with convergence. At that date, if others were going ahead on the single currency, and if we had achieved convergence ourselves, what British government would stay out? I find that quite incomprehensible and I hope that we shall receive elucidation on it later when the noble Earl replies.
As concerns the Social Chapter, in introducing the debate the noble Lord, Lord Waddington, referred to the Government's anxiety about the need to preserve different policies and to have regard to different methods of dealing with industrial and social relations. However, the fact is that that is precisely what is indicated in the appropriate section of the treaty. In the preamble to Annex 4, in Article 117, talking about the Social Chapter, the treaty says:
"To this end the Community and its Member States shall implement measures which take account of the diverse forms of national practices".
That is precisely what I thought we wished to guard against.
In conclusion, and looking at the whole of the Maastricht negotiation, I am unfortunately left with the uncomfortable feeling that while Britain may have scored a tactical victory, the strategy has been left in the hands of others.
4.12 p.m.
Lord Aldington: My Lords, the noble Lord, Lord Ezra, has done a great deal of work with me on the Committee Floor of the House. He has just made a speech which seemed to me to show that in his heart he fully supports Maastricht, but because today he stands in support of his Leader, who has told us he will move an amendment, the noble Lord has to produce some artificial reasons to object to Maastricht.
I am a great admirer of the noble Lord. I liked his earlier arguments and I shall come back to some of them. However, first I warmly support the Motion and very much admire the way in which it was introduced into the House. I am rather disappointed in what should be a great debate that the two parties opposite; should have put down amendments which I can only describe, in my most courteous phrase, as artificial party hype.
The key to the Liberal Democrat amendment is the phrase that we are not,
"at the heart of Europe",
1368
as my right honourable friend the Prime Minister said he wished to be and as he has been and is very much today. I cannot understand how, on the two matters that have been adduced to support this extraordinary proposition, noble Lords opposite can think that we have abandoned our influence. My noble friend Lady Elles made the point clearly. Far from being ignored, we are and have been listened to. On EMU, we have obtained agreement that we are in Stage Two. We are wholly parties to all the arrangements that are involved in Stage Two and part of those arrangements is the preparation for Stage Three, which may or may not be important to us. I believe that the preparations are important, and it is quite clear that we are a party to those preparatory procedures.
Furthermore, we have been a party to the settlement of the convergence principles which are of extreme importance to the qualification rules to the single currency. So on EMU I dismiss altogether the idea that we have got away from the centre.
As to the social dimension, we have confirmed over and over again—my noble friend and my right honourable friend the Prime Minister have confirmed —that we are committed to Articles 117 and 118 which are in the original treaty, plus what was agreed in the Single European Act. We are a party to those. We practise them. There have been 18 regulations under them which have been adopted. We are one of the few countries that have implemented all of them. So it is nonsense to say that we are outside the centre of the acceptance of the social dimension in the treaty.
More important to me are the positive steps which the noble Lord, Lord Ezra, mentioned in the first excellent part of his speech: the adoption of a definition for subsidiarity in the terms that we want it, not in the rather woolly terms that were at first suggested; the foreign policy, justice, drug and terrorist pillars; the provision in the new articles for increasing and improving the effectiveness of the Community as a whole; the articles about implementation and the penalties for enforcement by the European Court of Justice; more powers to the European Parliament; the recognition of the importance of national parliaments; more powers to the Court of Auditors.
I am sorry that the noble Lord, Lord Bruce of Donington, is not here. When he was confronted by my noble friend the Leader of the House reading out the important new article, his response reminded me of the old proverb that the cow that makes the most noise gives the least milk.
Lord Hailsham of Saint Marylebone: Touché, my Lords.
Lord Aldington: My Lords, for the future the really important point about Maastricht to me is the establishment of the pattern of progress towards closer union, which now includes not only collective action through the Community but co-operative action through the two pillars which could be added to. I regard that as an inheritance for the future which the Community will greatly value when it comes—as it certainly must—in a few years to review its

1369
institutions and its further progress against the background of enlargement, which there certainly will be.
I close by saying that in my opinion Maastricht was a great success for Britain, particularly for the Prime Minister. But it was also a success for the Community. It is one of the prime interests of the United Kingdom that the Community should be successful.
4.19 p.m.
Lord Stoddart of Swindon: My Lords, I have already protested twice at this debate being held today and being restricted to six hours. I do so once again and I believe that the Government are holding the debate on the same day as the House of Commons simply and solely because they wish to bounce both Houses into giving approval to the deal that they struck at Maastricht before the implications can be properly considered. Nevertheless the debate is taking place and I had better get on with it.
The fact is that the deal at Maastricht is being hailed as a triumph for the Prime Minister, who has said that he has obtained game, set and match. There has been a game, set and match but in my opinion it went to Kohl, Mitterrand and Delors, if they are to be believed. Kohl has said that the deal represented an irreversible process towards European unity. Mitterrand has said that Europe will now affirm itself as the world's greatest power. The French still have their delusions of grandeur and they now want to attach us to that power too.
Our dear friend Delors announced that the process towards a federal Europe was right on course. Who has achieved game, set and match? It would appear that the Germans and French in particular think they won game, set and match at Maastricht and not the British Prime Minister. That seems to be the position as far as I can see it. Although the Prime Minister is trying to pretend he has won a great victory, in fact he has won nothing of the kind.
It is quite clear that in spite of the removal of the word "federal", we are well on the way to establishing a western European superstate. Article A states:
"Every person holding nationality of a member state shall be a citizen of the union".
In other words, such a person will be a citizen of a new country. The article continues:
"Citizens of the union shall enjoy the rights conferred by this treaty and shall be subject to the duties imposed thereby".
In other words we now have a duty to this new superstate. Some people consider a duty to a state to be an allegiance to a state but perhaps we have not gone quite that far yet.
The British people, without being properly consulted in any way, are to be made citizens of and subject to a new state under the treaty. That is called the European union. Europe now appears to be a continent of only 12 nations. Do we now have a Europe within and a Europe without? What about the other 19 nations that are supposed to be members of the European continent? As I have said, we seem to be trying to form a western European superstate from which the others will be excluded.
1370
Whatever the Prime Minister may claim has happened, to try to disarm the Euro-sceptics in his own party, the treaty undoubtedly and effectively undermines the status of Britain as a self-governing state. The treaty extends the powers of European decisions over a wide field including foreign policy. Majority voting will be applied for the implementation of foreign policy decisions. That will apply also to defence, economic policy, health, consumer protection, immigration, culture, law and order and other matters. That is what the document will mean. Over a wide area our powers of decision will be constrained.
The EC will now be involved in every nook and cranny of our national life in spite of what the Foreign Secretary says. Even on monetary union, where the United Kingdom has secured the right to defer a final decision until 1997, the Government have given a lot of ground. The United Kingdom is now committed to giving reports to Europe on progress towards economic convergence and is committed to limiting budget deficits. What is even worse, this country, in spite of the so-called opt-out clause, will contribute large amounts of money to the new fund for poorer regions. Thus our already underfunded services will be further starved of money so that the begging bowls of nine of the EC countries can be topped up with taxpayers' money. Furthermore this, together with the restraints of the ERM, will bring home to the British people very sharply indeed that the price for the new European order is their jobs, their businesses and their social services.
There is a proposal to fine states that do not acquiesce and accord with decisions of the EC. I have asked before how on earth one fines a state. If a state will not pay its fine, how does one tell taxpayers and national parliaments that they must pay? The situation is absurd. It will soon be clear to the people of this country that the House of Commons has wilfully given over the governance of its country to a group of foreign potentates. Respect for Parliament is bound to diminish as a result. My time is now up. I fear I cannot support the Government's Motion. The amendment that has been tabled by the Opposition is framed in such a way that even I can support it.
4.26 p.m.
Baroness Strange: My Lords, I support my noble friend's Motion. When I went into the Whips Office to ask for a brief for today, one of my friends there said, "Of course, I think it is filed under M for Maastricht". Another said, "No, it is M for marvellous". I suggested it was filed under M for Major triumph. But of course the first girl was absolutely right. It was filed under M for magnificent achievement and surely the right involvement—close, heartfelt togetherness. That togetherness is close but not cloned. We keep our own sovereignty, our own Parliament and our own laws. We do not get pushed into a common currency willy-nilly. We are not issuing a blank cheque for the future. We retain our options to come in if we decide at a future date that it is right for Britain.
We do not subscribe to the Social Chapter, which means that, although we share many of the same ambitions—for example, good terms of employment,

1371
fair pay and hours and equal opportunities for minority groups, senior citizens, the Scots, Welsh and hereditary peers—we reserve the right to implement all this from our own Parliament and not from an imposed diktat.
On defence we continue with NATO while also building up the Western European Alliance, though neither on defence nor in foreign affairs can any decision be taken on a majority vote. Communication is between governments and Ministers and is not imposed by the Commission or by the European Parliament. We are all Europeans. My husband and I have a French son-in-law and a German lodger and I have Italian cousins. If we go far back enough, we realise that many of my noble kinsmen were French, Dutch, German and Hungarian.
When I was a child there were three ideas for the future which seemed to me of paramount importance. The first was the preservation of the countryside and the environment. At the age of five I mapped out grandiose plans for national parks and for keeping things green—usually my face, fingers and clothes. At six my preoccupation was the use of plants and natural remedies in healing. I had a small cupboard downstairs where I brewed herbal teas and remedies to try on my family and unsuspecting guests. Your Lordships will be relieved to hear that none of them died young.
At seven, rather before Munich, I felt strongly that Europe should combine closely together as a united family of sovereign states. Like a family, each was to be an individual and to have his own room and living space Like a family, agreements had to be reached from within, and on personal and individual concerns there should be no nanny-like imposition from above. That is the principle of subsidiarity. In your own room you do not all have to have white sheets and blue blankets and keep your socks in the top left-hand drawer. Some people have red sheets and khaki blankets and use the floor for storage space. That is their own concern. Also, like a family, the success and prosperity of one is shared and enjoyed by all, just as misfortune and disaster for one are mitigated by the other members.
Let us unite in congratulating my right honourable friends the Prime Minister, the Foreign Secretary and the Chancellor of the Exchequer and the whole of their team on their success at Maastricht. It is a magnificent achievement and surely the right involvement—close, heartfelt togetherness.
4.30 p.m.
Lord Monson: My Lords, within the past 24 hours we have learnt that from 1996 onwards the speed of coaches, buses and lorries operating entirely within the United Kingdom and not crossing any national frontiers is to be restricted, by order of Brussels and against the wishes of the British Government. What could demonstrate more forcibly that the euphoria in the government camp over the excision of the dreaded F-word, federalism, is entirely misplaced? It is misplaced because its excision is no triumph; it merely acknowledges reality.
1372
The reality is that the excessive centralisers in Brussels are hell-bent on creating not a federation— because in a true federation such as those in the United States, Canada and Australia individual states are entirely free to set their own speed limits and to decide a thousand small matters which Brussels, if they had the misfortune to be members of the EC, would not allow them to decide—but a unitary state. The allegedly preferable phrase, "ever closer union", is, in other words, being taken literally rather than symbolically by Brussels, to use the latter term in the sense in which my noble friend Lady O'Cathain used it.
Perhaps I may break with precedent and at this early stage in my speech put two questions to the noble Lord who is to reply. The first is, can the phrase "ever closer union" be interpreted in any way other than as implying a drive towards ultimate total fusion, with the individual characteristics of the component nation states being relegated to those the French would term folklorique?
My second question concerns subsidiarity, under which, according to the noble Lord the Leader of the House, Brussels will interfere only when objectives cannot be achieved sufficiently at national level. Who will decide where the decision is best taken? Will it be taken at local or national level, or by the European Court, with its notorious bias in favour of centralisation and harmonisation? I fear that we know the answer but it would be good to have it confirmed.
By way of illustration, we learnt yesterday that even Smithfield market, which has been sited in London for 800 years, is under threat from the Euro-meddlers. The conventional response from apologists for our yielding to Brussels in these matters is that it is all a trade-off and that in return for concessions—for example, on the single currency or the Social Chapter—we in turn have to give ground to other countries on issues about which they feel passionately. That is a superficially plausible argument but one which is based on a totally false assumption. In reality not one Frenchman, Dane, Spaniard or Portuguese in 10,000 has any desire to interfere in the internal affairs of the United Kingdom, any more than the ordinary Briton has any desire to interfere in the internal affairs of continental nations. The trouble stems from a tiny minority of middle-class meddlers and social engineers who, in their zeal for harmonisation, whether they realise it or not, create disharmony among the peoples of the different nations of Europe.
The extension of the Commission's competence into a variety of new fields—health, culture, transport and education—coupled with the extension of majority voting, provides a form of indoor relief for under-employed ideologues who, we note incidentally, are to be granted further privileges and immunities. If the Government had made greater efforts to oppose those corporatist, dirigiste and paternalist proposals they would have earned the gratitude of ordinary people not only in Britain but right across Europe. It is to their discredit that they did not do so.
More alarming still are the implications of the cohesion fund. When speaking of the Maastricht

1373
agreement a week ago today the noble Lord the Leader of the House said (at col. 782 of the Official Report):
"we have reached no agreement to pay any more than we are already pledged to pay".
However, whether via the small print of the agreement or otherwise, every economic commentator is agreed that we shall end up paying a great deal more. It is an open-ended commitment.
The taxpayers of the United Kingdom, as well admittedly as the taxpayers of Germany, France, Denmark and Holland and other northern EC countries, will have to pour money into a CAP-style cohesion fund, with all the opportunities for waste, fraud and misallocation of resources which funds of that nature inevitably imply. This is all for the benefit of countries whose standard of living is between 57 per cent. of our own, in the case of Portugal and Greece, and 83 per cent. of our own in the case of Spain. Yet in Eastern Europe there are countries whose standard of living is only 20 per cent. of our own, and in some cases only 10 per cent. of our own. There is real poverty, hardship and even hunger in those countries. Where is the morality in obliging taxpayers to contribute to comfortably off countries such as Spain in preference to the desperate countries of Eastern Europe? Where is the common sense in it, given the possibility of civil war, a revival of dictatorships and the probability of mass immigration to the West by people in their millions, frontier controls or no frontier controls?
Writing in the Independent last Monday (on page 17) the noble Lord, Lord Rees-Mogg—who I am sorry to see is not in his place—who is the author of books on the Gold Standard and other economic works, said:
"The Maastricht agreement was the stupidest economic decision for 50 years".
He may well have had what I have just described in mind.
When all is said and done and however imperfect the Government's achievements at Maastricht—and I pay tribute to the hard work put in by the Prime Minister and the Foreign Secretary and their advisers—one knows that Mr. Kinnock or Mr. Ashdown would have done far worse. My noble friend Lord Harris of High Cross spoke of gang rape. Most members of the Labour Party and almost every Liberal, when faced with the prospect of Euro-violation, take the attitude, relax and enjoy it and some benefits may follow. This Conservative Government, on behalf of the British people, have put up a most vigorous struggle. While they have by no means emerged unscathed by indecent assault, for the most part their honour remains intact. For that reason I cannot support either of the Opposition amendments.
4.37 p.m.
Baroness Park of Monmouth: My Lords, I join noble Lords in welcoming the signal success at Maastricht which we owe to the professionalism and courage of my right honourable friends the Prime
1374
Minister and the Foreign Secretary in the fields of foreign policy and defence. I should also like to pay my tribute to the back room boys and girls.
However, we are approaching a most dangerous period in which the instability and precarious hold on order in what used to be the Soviet Union is only too likely to come to a head. We are also confronted with a Russian state which gives every sign of combining considerable Greater Russian chauvinism with the same failure to deliver or to be accountable in the key areas of defence and the economy as its predecessor. Mr. Yeltsin seems about to assume the same central responsibilities for the armed forces and the KGB, together with finance and the economy, as Mr. Gorbachev had. The question is whether he will succeed in exercising any effective political control, if indeed he wants to, over the realpolitik of the army and the KGB.
In a revealing outburst in September, Rutskoy, the RSFSR vice-president at that time, said:
"Germany has transferred about 60 billion roubles to us in the last 5 years. Where have they gone to? Take the USSR-Italian treaty concluded in 1989. The Soviet side has not fulfilled a single paragraph of the treaty. The credits granted to us have not been used. The time is coming to pay them back. The money disappears as a result of mismanagement and irresponsibility, plus an element of money being stolen".
On 7th November it was being stated that the country's foreign debt was 47 to 48 billion foreign currency roubles and that between 17 and 18 billion roubles were owed to the former socialist countries. According to Yakovlev on 18th November, over a period of one-and-a-half months five tons of gold and platinum were shipped abroad by unknown persons.
Meanwhile, the Soviet media carry regular references to the privatisation of the defence industries. A typical report stated that a stock exchange had been set up which would specialise in trading in radio, electronic and computer equipment as well as in communications technology. Among the 35 sponsors of that commodity exchange were a number of defence plants accounting for about 85 per cent. of all Soviet radio electronic equipment output. The privatisation bill in July ensured a state share in such joint stock societies of 30 to 50 per cent. in transport, fuel and defence enterprises, and 50 to 70 per cent. in communications.
In June last Mr. Gorbachev told the Military Academy that the doctrine of reasonable defence sufficiency is a response to the combat power of the industrially developed countries which is constantly growing and improving. He said that it is necessary to bring arms production into line with the doctrine of their organisation of the army. In the same month, Mr. Yeltsin said:
"Taking into consideration the fact that the main defence sites are on Russian territory, we (and the Americans) could jointly do a great deal by attracting intellectual capacity which is geared towards the military-industrial complex".
We must be watchful. The Russian leadership has not changed its spots. The army and the KGB now look to Yeltsin, but their aims have not changed. Like a good ju-jitsu operator, they are turning apparent weakness into strength. They need and want a leaner, more sophisticated army and a weakened adversary.

1375
As a distinguished Sovietologist, Mr. James Sher, has pointed out, they want to eliminate the image of the enemy. Their new thinking,
"aims to create the political conditions which will force NATO to transform itself defacto into an organisation whose first business is disarmament rather than defence. NATO's survival will in turn reassure Europeans that 'new thinking' is in their interests".
That is part of the doctrine of reasonable defence sufficiency.
Meanwhile, on the economic front, the Soviet—now Russian —leadership, is doing an excellent job convincing us that they are at risk unless we help them. Communists think long and Mr. Yeltsin is no less a product of their thinking than was Mr. Khrushchev. They are hard at work convincing us that what they most need, apart from open-ended aid without ring-fencing fencing or accountability, is technological partnerships with the West. The Western partner can then front for the defence establishment in securing all those valuable secrets which CoCom has denied them and which the KGB has hitherto had to steal. It is no coincidence that General Kobetz, who is in charge of the military reform committee and stands close to Yeltsin, has a KGB background. The one thing that the Russians can produce without any help is confidence tricks.
We must look to our position after Maastricht and we must, first, assess clear-sightedly where our interest and that of the Community lies rather than that of the Soviet Union. Shall we be able to negotiate effectively with the Russians? They will be able to manipulate Germany and France. We should apply our own skills and experience for the common good and, incidentally, for the good of the recently liberated countries. Secondly, we must do that within the framework of NATO whenever possible. That, rather than the Community, is the Russians' chosen point of serious contact with the decision-making world. It is where we and the Americans have most at stake and far more in common than with the Germans and French. Countries like Poland will have little reason to join and trust the Community when they see such examples of its collective wisdom as the German initiative on Croatia.
What was the Soviet Union now presents two distinct dangers. The short-term danger is its volatility. A spark may light the tinder internally. The long-term danger is that we might lower our guard and forget that the leadership of the army and the KGB—the continuity men—will think long, have clear objectives and know how to manipulate us and to separate people in the Community one by one. They are past masters of what the Russians call maskirovka—deception. The price of our freedom is eternal vigilance, professionalism and a good, sound defence capacity.
4.45 p.m.
Baroness Turner of Camden: My Lords, I welcome the opportunity to participate in the debate which is perhaps one of the most important that we have held in this House for many years. I was a member of your Lordships' Select Committee on the European Communities which reported on the draft Social
1376
Charter back in December 1989. We produced our report in an attempt to influence the then Prime Minister prior to the European Council meeting in Strasbourg that year. However, we were unable to persuade the Government that their outright opposition to the charter was counter-productive, even from their own point of view, as they would lose any opportunity to amend by negotiation those items to which they took exception. The advice was not taken. We see today that the policy of isolationism has continued. Nothing appears to have changed.
It has been an essential part of this Government's policy that regulation in the employment field inhibits job creation and therefore should be opposed. That was repeatedly stated to the European Select Committee by Government spokespersons and it has been reiterated today. Yet we have over 2.5 million unemployed in the country at present. The real figure is probably nearer 3 million as the basis of calculation has been altered so many times since 1979. We have less regulation in the employment field than ever and certainly less than our European partners. If ever there was proof that regulation does not of itself inhibit job creation, it is here in this country.
Moreover, the Social Charter seemed at that time a fairly anodyne document. The intention was, and still is, to create a single market in which all citizens feel that they will derive some benefit. What is wrong with that? The charter stipulates that in each member state workers are to receive fair remuneration, sufficient for a decent standard of living. Improvements in living and working conditions are to be sought. There must be equal treatment for men and women. There should be an entitlement to annual paid leave and social protection, including social protection for the unemployed. There should be a right to training, including vocational training. Rights of association and to collective bargaining are also to be guaranteed. It should be said here that the Government are themselves in any event already a signatory to International Labour Office Conventions 87 and 98 which guarantee much the same kind of rights anyway. So why do they jib at this provision?
However, the underlying philosophy is perhaps even more important than the specific provisions. Our European partners accept the concept of social partnership. Trade unions are referred to as social partners. It is accepted that unions not only have a right to exist but that there should be a fair framework within which they may represent the interests of their members, and that they should have the right to consultation and negotiation in order to do just that. It is only Britain, led by its present Government, that wants to opt out of all that. Our attitude in that respect is simply not understood by our partners in Europe who, for decades, have accepted the whole notion of social partnership.
Because Britain has opted out, the other 11 have agreed an entirely separate protocol dealing with the social issues. It is worth reiterating that the 11 have committed themselves to,
"the promotion of employment, improved living and working conditions, proper social protection, dialogue between

1377
management and labour, the development of human resources with a view to lasting high employment and the combating of exclusion".
I emphasise the point about dialogue between management and labour. In other words, our social partners believe in social consensus and see that as the only way in which we shall ultimately make progress. Action is to be taken by qualified majority to support and complement the Government's activities in the fields of improving the working environment, the protection of health and safety, working conditions, information for and consultation of workers, equality between men and women and the integration of persons excluded from the workforce.
The Government have opted out of all that, which means that we shall be excluded from involvement in developing European social policy. We shall be excluded from developing the Social Chapter, but we shall ultimately be bound by it. I do not believe that the exclusion will hold. Perhaps even the 11 do not think that they will have to wait very long for Britain to opt in. We shall certainly do so if there is a Labour government. Anyhow, multinational employers will have to apply those conditions to their employees who are employed in the rest of the European countries.
Meantime, the political message being sent out by the Government to our own electorate and the world at large is a deeply depressing one. It says that we shall not sign up for basic rights for individual workers because we want to have a low wage economy instead of a high wage, high skill, high tech economy. It is not surprising that over the weekend a leading newspaper gave its article on Maastricht the headline "Welcome to Mr. Major's wonderful bargain basement". Is that what we should be saying to the large section of our workforce, many of whom are women, which is already low paid? A large part of that workforce is part time—part-time workers who work on poverty pay. Should we say to them, as the Government say, that we value them less than the governments in the rest of the Community value their own workforce? I do not believe that we should say that.
I think that the Government have a nerve to come before your Lordships this evening and ask for congratulations. I hope that this House will refuse. I support the amendment moved by my noble friend Lord Williams of Elvel.
4.52 p.m.
The Earl of Bessborough: My Lords, I shall not repeat all that I said on European union on November 25th and on many previous occasions over the years. Unlike the noble Baroness, I want to endorse what my noble friend our Leader said in warmly endorsing the agreement secured at Maastricht and to congratulate the Prime Minister on securing HMG's negotiating objectives. Indeed, I consider that my right honourable friend the Prime Minister's highly skilful handling of those complex problems was remarkable inasmuch as he managed to reconcile the views of enthusiastic Europhiles such as myself with the views of those who may be less enthusiastic about further European integration. I repeat what other noble
1378
Lords have said: our Foreign Secretary, the Chancellor of the Exchequer and their officials should also be mentioned.
I am glad that the new treaty strengthens foreign policy co-operation and broadens the areas in which we work together to include crime, immigration and asylum. The EMU negotiations were of great importance. Although I have been advocating monetary union for some 20 years, ever since the Werner Report in 1972, and would have been happier perhaps if by now we had achieved monetary union and a single currency, I am glad that the Government will continue to be fully involved in the discussions on shaping EMU. If the arrangement agreed means that we have been able to agree with others to accept it, I go along with it.
With regard to defence, I am glad that all 12 governments are agreed on the need for Europe to do proportionately more in our defence. I entirely agree that the vehicle should be the Western European Union, but we must not exclude from participation the other European members of NATO. A European defence effort must be compatible with our NATO obligations.
On the industrial front I am glad that the arrangement may further increase the attractions for Britain as a host for inward investment inasmuch as we already receive into the Community some 40 per cent. of Japanese and American investment. I am glad too to learn that we are not opposed to a social dimension, for the Community, but it is clear that we must not return to the chaos in industrial relations which characterised much of the 1970s. The number of working days lost through strikes has been reduced from 29 million in 1979 to 2 million in 1990.
I am very glad to learn that there was a good atmosphere characterising the negotiations. I also endorse what my noble friend the Leader said on subsidiarity. I have always said that doing everything that can be done nationally or even by local government is the best solution and only major international questions of the environment and other cross-frontier issues should be a matter for the Community.
On the broad field of European co-operation I like to recall the "mission statement" by the founder of the Royal Society of Arts in the 18th century. He said that union,
"emboldens enterprise, enlarges science, refines art, improves our manufactures and extends our commerce".
I agree that my right honourable friend the Prime Minister has brought back from Maastricht a fine package. I end by saying only Vivat Regina! and also Vivat Europa!
4.58 p.m.
Lord Jay: My Lords, I am happy to give one cheer for the Prime Minister. It seems to me that he has avoided, or at least postponed, some of the worst follies that might have threatened us in the original Maastricht agreement. But that does not mean that he has not endorsed the further abandonment of control

1379
and authority over our own internal economy, which in effect is taken out of the hands of the British electorate and Parliament by the agreements.
I shall make only one point on the Social Charter. Some people seem to assume that because, rightly or wrongly, we have not accepted the charter, we ourselves are therefore not entitled to introduce reforms of that kind. That is nonsense. We have not yet reached the point where we cannot positively do things ourselves without having the express permission of Mr. Delors beforehand.
On the political and constitutional side, I believe our central aim in the Community should be to ensure that as many decisions as possible are taken by the Council of Ministers and that the British Ministers taking them are responsible to the British Parliament, including this House. However, the worst fears that I have and I believe the worst damage threatened, come from the economic and monetary proposals. In the very elaborate and verbose charter or code which the central bankers have set for themselves in the independent central bank there is not a single mention of employment or unemployment. Those monetary men seem hardly to have heard of the real economy.
I know that the unbalanced infatuation with monetary values is not just the product of rational economic argument; it is in the minds of the German central bankers the result of the long-standing German obsession with the inflation of the 1920s. However, the most important decision any modern state has to take on internal policy is the balance between rising prices on the one hand and unemployment on the other. Any economy ruled by the language of the German central bankers would inevitably slide into chronic high unemployment and low production. The weaker economies in a single currency would have even more unemployment than the stronger. Already under the ERM, Britain, France and Italy have about 10 per cent. unemployment, which has been rising in this country ever since we joined the ERM. For the UK to join a single currency at present exchange rates with the deutschmark would in any circumstances that one can imagine as probable condemn the UK to a chronic 3 million or 4 million unemployed. It would repeat the mistake that we made in 1925.
Central bankers of course are very worthy and distinguished men. I believe that I am to be followed by the noble Lord, Lord Cobbold. But to hand over total control of the entire economy to central bankers would be like giving chiefs of staff the power to declare war or the board of Inland Revenue the power to alter the rate;; of income tax. I do not believe that noble Lords opposite would like that.
We are told that there is to be something called | convergence. But there is no such thing as economic convergence. Economies do not converge; for most of the time they diverge in many ways, and they always will. The only sign of convergence in the Community at present is that Britain, France and Italy are all suffering from 10 per cent. unemployment.
We also now find that the word "irreversible" has crept into Mr. Delors' text. "Irreversible" is a Marxist word, much beloved by Mr. Tony Benn. But in politics
1380
nothing is irreversible. One of the great blessings of our system is that if Parliament makes a mistake it can be reversed. Let us consider the poll tax. Just imagine if the poll tax had been irreversible!
However, to be as cheerful as one can, I see at least one chink of light in this Maastricht compromise. In the text of the agreements there is a slightly more liberal attitude to those countries outside who may wish to join the club. So long as we are members, expansion of the club—if it cannot eliminate all the present internal absurdities—may yet abate them. Incidentally, it will be much easier for countries outside to join if the Community is looser rather than tighter in its various operations. Let us therefore make it one of our central objectives that any nation, including the EFTA nations, may join, or indeed leave, the club when it wishes to do so by its own free choice.
5.5 p.m.
Lord Cobbold: My Lords, it is impossible not to have some sympathy with the sincerely held views of the noble Lord, Lord Jay, on the iniquities of central bankers. I am sure he will understand that I cannot entirely share them. I do share his anxiety on unemployment.
Undoubtedly the Prime Minister had a personal success at Maastricht. I should like to add my recognition to that given by the noble Baroness, Lady Elles, of those who carry out the preparatory work behind the scenes. I believe that at the official level our participation in negotiations has often been more positive than at the political level. However, like other noble Lords, I deplore the Prime Minister's use of the phrase, "Game, set and match". My feelings were of relief that common sense had prevailed over party squabbles.
I shall confine my remarks today to the treaty on European economic and monetary union and to the single currency. Happily for the Government, the foreign exchange market has so far chosen to ignore the celebrated opt-out clause, no doubt believing that no British Government would be foolish enough to invoke it. I hope that that situation will remain and that credibility in our full participation in the process of monetary integration will not be damaged.
Probably the only practical consequence of the opt-out clause is that we have denied ourselves the possibility of having the headquarters of the future European central bank sited in London. Under the terms of the treaty, the decision on its location has to be made by the end of next year. I do not believe that such denial is too serious, or indeed that a location in London was ever a likely possibility. Perhaps the obvious place for the headquarters of the European central bank is Frankfurt where it can readily inherit the mantle of the Bundesbank. The important thing for London is that we should have the principal operating arm of the system, the equivalent of the Federal Reserve Bank of New York. That can still be achieved and may even come about de facto through market forces following the introduction of the single currency.

1381
Perhaps we may look forward. I believe that the time has now come for the Government to abandon its foot dragging and to begin in earnest the job of selling the idea of a single currency to the public. The benefits are not just the saving of transaction costs. Far more important are the potential rationalisation of investment decisions, the economies of scale to be won, the fusing of total European savings into a single capital market, more competition and more choice for Europe's 340 million consumers.
The vexed question of loss of the pound—or, for the Germans, of the deutschmark—has to be addressed. Is it beyond the imagination of the architects of the system to devise parities for the ecu that bear some sensible relationship to the principal existing currencies, allowing some of the best known names to survive alongside? Perhaps I may give a simple example. The current parity of the deutschmark against the ecu has five decimal places at 2.05586. If it were adjusted to a straightforward 2.0 with similar rounding out of the decimal points in other parities, the effect on the external market value of the ecu would be marginal but the mark would become the half-ecu coin. The benefits in consumer acceptance and ease of transition could be considerable.
With the ecu equal to two deutschmarks, it would be possible for the Bundesbank to design and issue joint deutschmark/ecu notes before the beginning of stage three, thus encouraging acceptability of the ecu and familiarity with its value. The deutschmark is the key currency in the system. Fixing the ecu parity against the deutschmark and establishing the ecu as a currency rather than a basket could be brought forward to stage two when the currency composition of the basket is in any case due to be fixed.
The ecu comes up for its next quinquennial review in late 1994. That would seem the ideal time to make final adjustments to ecu parities and to establish a fixed link with the deutschmark. The other currencies would then have their two-year probation period, as defined in the convergence criteria, before the final fixing at the beginning of stage three.
There are a number of other possibilities for convenient whole number parities. However, much depends on whether existing relationships are maintained or whether in the interests of greater employment a more general realignment is necessitated in the intervening period.
One problem not adequately addressed in the treaty is the minting of coinage. We are told by the Commission that it will take five or six years to mint the necessary 64 billion new ecu coins. How can they possibly be ready on time for stage three in 1997?
The treaty is also not clear on what happens to the currencies of member states who fail the convergence tests and do not participate in the single currency—the so-called "member states with a derogation", including the United Kingdom if it should choose to exercise its opt-out clause or if it should fail the convergence test. Would their currencies remain in an exchange rate mechanism with the new single currency or would they be left to float freely?
1382
These and other problems need to be addressed in the next round of negotiations. The British Government will be able to take an active lead during their presidency in the second half of next year. But it will be a new British Government.
I should like to see the new British Government bringing forward legislation to accelerate the process of granting independence to the Bank of England, which under the new treaty is due to start only in stage two in 1994. I should like to see specific measures to encourage the use of the ecu; for example, permitting companies to compute and pay their tax bills in ecu. I should like to see an end to the language of not wanting a single currency to be imposed and the beginning of a positive campaign to promote the advantages of monetary union and its practical implementation. I hope that these and other such proposals will be included in all election manifestos; they certainly will be in ours.
An element of faith is required in any great enterprise. I believe that it is easier to have faith in this country's future prosperity as an active participant in the single currency than it is to have faith in our ability to prosper if we opt out.
5.12 p.m.
Lord Mottistone: My Lords, I join with my noble friends in warmly congratulating my right honourable friend the Prime Minister and his team for their achievements at Maastricht. My right honourable friend said what he planned to do. He persevered in the run up and achieved what he set out to achieve. Few statesmen have managed an international deal so well. Very few would ever have dared to spell out their intentions so fully and publicly beforehand for fear of failing.
The sad little amendments tabled to my noble friend's Motion are just mean and cheap when measured against the bold actions of the Prime Minister. It is also sad that the noble Lords, Lord Williams of Elvel and Lord Bruce of Donington, were reduced to attacking the Government for not including in the agenda issues that were never planned to be there.
The achievements were not only what the UK Government wanted but what British industry wanted. The CBI states that Maastricht matters and the agreements reached represent almost exactly what business needs. It welcomes subsidiarity. I am not sure that I do; I wish another name could be found not only because the word is difficult to pronounce but because one has to look it up in the dictionary and it is not there.
The CBI welcomes subsidiarity because it will be harder for the Community to intervene on subjects that are better handled nationally. It welcomes the improved enforcement of community legislation and new fining powers to the European Court in respect of people who do not comply. It welcomes the new sensible balance on environmental issues. It welcomes the setting up of a framework programme for research and development. It welcomes a decision on industrial policy which limits Community intervention. It welcomes, and is surprised at, the agreement for the

1383
enlargement of the Community. I must confess that I, too, welcome that agreement. The sooner that we bring in the other countries in Europe when they are ready to join, the better. The CBI also welcomes the protocol which will go a long way towards removing the threat of retrospective application of the Barber judgment on occupational pensions. That could have cost British industry a great deal of money.
The CBI welcomes the decisions taken on the Social Chapter. I believe that the noble Baroness, Lady Turner of Camden, went a little far in suggesting that if those decisions had not been taken the British working man would have been much better off. I am afraid that he would not; the reverse would have been more likely to apply. The CBI consistently urged the Government to oppose any extension of qualified majority voting in the labour and social affairs field. The Government did so in the interests of British competitiveness. Industry's opposition to the Social Charter and to Mrs. Papandreou's social action programme should not be misunderstood. Where the CBI challenges the objectives of directives it does so shoulder to shoulder with those representing all other Community employers. But often the debate is about the means whereby objectives are realised.
In that respect the UK, through no fault of its own or anybody else's, could be relatively disadvantaged because of, first, a legal system which interprets the letter of the law; secondly, multi-union workplaces; thirdly, largely decentralised industrial relations; and, fourthly, a fragmented labour market with growing emphasis on new forms of work. Our working conditions and employee relations at least match the very best of EC standards. The law properly enforced defines the boundaries of acceptable conduct at the workplace. However, the detail is worked out between individual employers and their employees. The decision taken at Maastricht will help to ensure that that remains so.
The CBI and industry also welcome the decisions taken on economic and monetary union. The key to that is obtaining sufficient economic convergence before a single currency is even considered. What has been achieved is that people have been invited to think and to wait before going ahead with a plan which in any event is not intended for another four or five years. I suggest that those who have sought to portray the UK as being, so to speak, left behind and in a second track, have not correctly interpreted our best contribution to the Community to date, and as it can be in future.
In the early 1970s, before we went into the Community, I managed to join a delegation which was going to the Commission building in Brussels. I wished to find out what it was all about and how it was organised. In an interesting portrayal of the way in which the Community planned its work we were told, among other things, about harmonisation. harmonisation means different things to different people but on the whole, in the right place and for the right activities, it is a good thing. I am talking about 1971 or 1972 when the Community had been operating for
1384
about 14 years. I believe that they had 100 potential harmonisation projects and had achieved only about 10.
I said to the people who were talking to us, "That is not a very big achievement. You are not doing very well with your great Community". A very wise German said to me, "Well, no. We do not think that we can achieve a solid community of purpose if this organisation seeks to hurry matters like harmonisation faster than the peoples of the states can accept them". I said, "Well that means that it will take you a long time to achieve anything very much". He said, "Well, we think there is really no hurry. We are all together and we shall achieve a much greater degree of solidity if we take this slowly". I asked what he meant by that. He said, "I should be surprised if we have anything very firm by way of a community of purpose for 50 years"—which would have taken us to 2020 —"but it could well be the middle of the next century before we are a proper force to be reckoned with in the world community". That was an interesting statement by a German, not an Englishman. There were no Englishmen, or, if there were, they had been hired as expatriates because that was before our entry.
I am sure that what we are now doing and our great contribution to the development of the Community is to encourage measured, steady progress without too many fancy ideas, just along the lines which the German told me about 20 years ago. I believe that our achievements at Maastricht were just that.
5.21 p.m.
Lord Ennals: My Lords, it is the first time that I have spoken on foreign affairs in this House and I take the opportunity of the freedom of the Back Benches to do so. I speak with some temerity but with deep feeling because I am extremely worried about the attitude taken by our Government and, indeed, by many of our people in relation to those crucial negotiations which have taken place.
I agree very much with the noble Lord, Lord Mottistone, about the importance of the enlargement of the Community. It presents us with a challenge. However, I do not agree with his conclusion that time is on our side; we can let matters move slowly and by the middle of the next century we may be able to cope. The fact that that view was given to him by a German says something, because the Germans are moving much faster than we are. Not only the Germans but most of the Continentals recognise that time is not on our side. They recognise that they have been held up and often we have held them up. We should not look at this as a nice, leisurely, gentlemanly talk. I am deeply anxious about the events which led up to Maastricht and the media hype during Maastricht and the days which followed it.
It seemed to me that the main aim of the Prime Minister was to achieve some sort of spurious consensus within the Tory Party rather than to work out and pursue the best interests of Britain. Over the years and perhaps under successive governments Britain has missed opportunity after opportunity. I

1385
have never thought Britain should always be in the lead but I certainly do not believe that we should be lagging behind.
The noble Lord, Lord Cobbold, said that after Maastricht he felt a certain sense of relief. I do not share it. I feel that once again an opportunity for full British involvement had been lost.
Those who support the Motion on the Order Paper will no doubt do so because of party loyalty, which I understand because I have such loyalty for my party; or it may be because—and the speeches suggest this —they accept that the Prime Minister's objectives were almost entirely negative. But that is in conflict with the best interests of the country. He wanted to see that certain things should not happen. He wanted to ensure that we were given the opportunity to opt out and that all decisions would be left to a British Parliament. I do not believe that that is in the best interests of the Community or the country.
For the other 11 countries it was a victory for they are able to proceed to a common currency and to build an ever more powerful Europe on the foundations laid over the past 30 to 40 years. If the Prime Minister's objective was to persuade them that we should be allowed to opt out of the process and to move forward at our own snail's pace in a second tier, slow track routine, then he pulled that off. However, I do not believe that that was a triumph for Britain.
What an objective that is. The noble Lord, Lord Jenkins of Hillhead, referred to leadership and vision. There seemed to be no leadership or vision in the role played by the Prime Minister.
I believe that that was to the regret of our partners. I do not believe that any of them is happy that Britain put itself as twelfth on the list. I have spoken to several Continental friends in the past few days. Not only do they appear to regret what they saw as our negative approach but in a sense they despise the cocksure, game, set and match attitude and the macho approach to success which have been taken since. I do not look upon it as that, but I do not believe that the majority of people in Europe any longer feel happy or respect Britain.
There is nothing to celebrate in an empty chair. I see that Britain is isolated from the mainstream. It is condemned to a kind of European economic, financial and social second division.
As regards the Social Chapter, the Prime Minister seems to have rejected or postponed what most countries regard as good practice in industry and commerce. The social action programme under the Social Charter has covered such issues as equal status for 6 million British part-time workers, most of whom are women, improved maternity rights, rights to consultation in European-wide companies, protection for young people at work, minimum holiday entitlement and limits on working hours. All those are issues which the other 11 accept as part of their agenda. They feel that those issues should be dealt properly by Europe. We have decided that that is not for us. Only the British Prime Minister said that that was not an agenda for Britain.
1386
It is not a joke that that has happened but a very sad situation. The Government have been short-sighted, negative, petulant, petty minded and unimaginative in their approach to a conference which may go down in history as one of the most important opportunities for Britain. Britain should have been able to seize those opportunities. The Prime Minister has said he wants to see Britain at the heart of Europe. No one can seriously say now that Britain is at the heart of Europe. It is on the fringe and it is on the fringe by its own decision, by the decision of the Government and the Prime Minister. Those who wish to celebrate that ignominious defeat, as I see it, know which is the opt-out lobby this evening. I expect that they will be there in large numbers. I think that it is a tragedy that once again an opportunity for a powerful British role in Europe has been lost.
5.30 p.m.
Lord Bethell: My Lords, I cannot agree with the previous speaker. I spent this morning in Brussels where debate rages hotly on these issues. While I speak only for myself in this House, I can say that Members of the European Parliament of my party agree wholeheartedly with and applaud what the Prime Minister achieved in Maastricht last week. Apart from that, there is a wide understanding among Members of the European Parliament of all parties regarding what was done and the arrangements that were made.
A former president of the European Parliament, Mr. Piet Dankert, now a Dutch Minister, put his finger on it when he said that there are certain cultural differences between the way that Britain and the Continent look at the question of Europe. It is true that there is an element of vision, of faith and of dream about the Continental approach to what is being built. It is often seen in a pejorative way by commentators in Britain on that account. On the other hand, we congratulate ourselves on our practicality and careful approach to progress in Europe.
I say that there is room for both in the building of Europe. We need the practicality of the British. We also need a little of the vision of many of the Continentals who see Europe as the way forward for the future. The danger arises when practicality turns past scepticism—there is of course room for healthy scepticism on the issue—in some British intellects or expressions into a form of arrogance and xenophobia. There is no Continental equivalent of Mr. Ridley. We spend a lot of time apologising not so much for what he says but for the way in which he says it.
On the other hand, we find in Brussels and Strasbourg a great appreciation of the careful analysis of European progress made by British Ministers, British civil servants and, I hope, British parliamentarians. It has been said to me that if the British in Europe did not exist, something would have to be done to invent us. We are the ones who often go for the detail of points which have been agreed across the board by others—not that there is not room for both.
I should therefore like to say that I applaud what the Prime Minister achieved over the single currency, though I shall be surprised if we do not have a single currency by the end of the century. I applaud what he

1387
achieved in defence and foreign policy. On immigration I believe he struck the right balance. In that respect I should like to say how much I applaud the improvement in the arrangements made at Heathrow Airport to allow millions of people to pass every year with the minimum of fuss, bother and delay. It is far better than at most Continental airports; I say that as someone who uses them perhaps more than most. I only hope that the immigration arrangements at Dover can be made as simple and painless as those at Heathrow.
Subsidiarity was a great achievement by the Prime Minister and his advisers. Gone, I hope, are the days when the Commission will start telling us what to do about the Winchester by-pass. On the basis of subsidiarity, that matter will probably be dealt with by the Winchester borough council, not even by the Department of Transport, and certainly not by the Commission in Brussels. The points agreed on implementation are an important British contribution to the Maastricht agreement and one that is well recognised by Continental colleagues.
On the Social Chapter there are many debates and disagreements between us. But I believe that the Prime Minister was right to do what he did. Under the new arrangements Britain will attract investment from Japan and the United States and allow the evolution of better industrial relations by agreement rather than by legal enforcement. As a result, unemployment will be kept at a minimum.
I should like to make one or two comments in regard to the European Parliament. I am pleased that it was found possible to make the term of the Commission coterminous with that of the European Parliament—a five-year rather than a four-year term. That will enable us to control, confirm and advise on the appointment of commissioners. However, it is a pity that the Commission still maintains the monopoly on initiating legislation. I believe parliamentarians should initiate legislation. It is a pity that the Commission retained the right to approve or reject the Parliament's amendments on first reading as it wishes. That is not a proper relationship between a parliament and a bureaucracy. We must insist on the fact that the Commission, eminent though its leaders are, is a civil service, a bureaucracy. It should be properly supervised and controlled by an elected parliament.
It is not right that in the long term the European Parliament should be mainly advisory over legislation. While I approve of the negative assent procedure given to the Parliament on some rules, I believe that will eventually be expanded as well. But there should certainly be greater powers given to the European Parliament over the Commission. We could be helpful to national parliaments in that matter, not take away their powers. We could be helpful to your Lordships and to another place if we had the right to control the Berlaymont, Brussels civil service.
I conclude by saying that, although there have been disputes and disagreements in the past week on these points, the show is on the road. We are still in business. Britain is in Europe. Despite what the last speaker said, I believe that Britain is still in the heart of Europe. I hope that we will not see Europe—some
1388
of us—merely in terms of lawnmowers or bacon-flavoured crisps. One must take time off for a little vision about the Europe that there will be in future decades. I shall be surprised if there are fewer than 25 members of the European Community 10 years from now.
A European union must be built if Europe is to be kept free of poverty, disunity, war and chaos. That is perhaps better understood on the Continent than here. A European union is in Britain's interests. We should insist on that and proclaim it from the rooftops, perhaps more than we do at the moment. These are not far-away countries of which we know little dragging us kicking and screaming under their control. They are countries which have good reason to fear dictatorship and the results of disunity. We have seen the results of disunity in Yugoslavia in past weeks. Let us pray to God that we do not see them in their appalling forms in what was once the Soviet Union. Therefore let us applaud an agreement that will benefit us all and congratulate the Prime Minister on helping to give us in Britain, having lost an empire, the beginning of a role.
5.38 p.m.
Lord Kennet: My Lords, as is often the case, I agree with much that the noble Lord, Lord Bethell, says, not necessarily his last sentence, but most of the peroration before that. At the beginning of his speech he said that he had recently returned from Brussels and found there that many Continental politicians thought that if we did not exist it would be necessary to invent us. That is an interesting observation. To my mind it shows a mild degree of the insularity which has now become characteristic of the Benches opposite—perhaps the mildest degree shown today.
It would be truer to say that if we were not the last to accept the step-by-step integration of Western Europe, somebody else would be. But—and here is the point—the difference between them and the rest would not be as wide as it is between us and the rest now. When one looks at that in another light it is not too surprising. After all, we are the only island in Europe. One would expect an island to be the last on integration moves. If it had not turned out like that, we could have been astonished.
Another case of mild tunnel vision came from the noble Lord, Lord Mottistone. Quoting his wise German, he said that he thought it would be 50 years before there was any real sense of community in the European Community. He then let slip that that would be in the 2020s. It would be in those years if one thought that the Community had begun in 1973, but it did not; it began in 1957.
Lord Mottistone: My Lords, I was talking to the German, as I said, in 1972. So the year would be 2020 because he was speaking about 50 years from then.
Lord Kennet: My Lords, I apologise to the noble Lord. I had understood him to mean that the sense of community would be achieved 50 years from the foundation of the Community, which we tend to forget was a good long time before we joined it.

1389
My noble friend Lord Clinton-Davis pointed out strongly, and entirely correctly, that the distancing of Britain from the Social Chapter was a paradoxical affair. Articles 117 and 118 have always been there and we have subscribed to them. In detaching ourselves from that chapter now, we are, as it were, "unsigning" part of the original Treaty of Rome. The noble Earl, Lord Caithness, shakes his head. Perhaps he will go further into this matter when he winds up. Those articles have been there all the time. What is new in the new Social Chapter is very small indeed compared with what was always there. As has been observed so often in the press and in the debate today, what is new is not at all terrifying. It is mostly about the Commission having the right and duty to facilitate contacts, understanding and negotiations between what the Germans call the two sides of industry, and making services available within the national societies of member states. It is also about assisting workers in international Community companies to negotiate with those international companies. It is very obvious that they need assistance, because the workers are not international and the companies are. It is hard to see how anyone can be so steamed up about that.
What about the mechanics of the Social Chapter as time goes on? Let us look at the situation now. Next time the Council of Ministers discusses matters under the Social Chapter, that would include proposals which might or might not come under that Social Chapter or the proposals might concern matters which come half under the Social Chapter and half under another chapter. What happens then if Britain leaves the room or stays silent? That is fairly easy to imagine. But when we next hold the presidency of the Council, presumably we shall be unable to chair a debate about a matter which is not going to affect us. That might be difficult. Would the President be required to retire from the room or what? What about the frontier questions between that chapter and others? I see at least two past commissioners having a discussion about the matter already. I hope that they may have a solution.
I return to an earlier matter which the noble Lord, Lord Young of Graffham, a former Secretary of State for Trade and Industry, put forward with such raw force. I refer to his pride in the fact that we shall be able to offer to foreign investors worse conditions of employment—that is to say, more profitable, more old-fashioned and rougher conditions of employment —than apply in other Community countries. That is a shortsighted object of pride. To begin with, it is not going to be a very popular situation for very long in this country when it sinks in that that is what is happening. To go on, a rational deployment of inward investment in the Community, which is as desirable as a rational deployment of self-generated investment, can only be achieved if the conditions are roughly equal throughout. That is an extreme case of the blinkered vision of the Benches opposite of which I have presented two minor cases.
Having said all that, what has happened is not a disaster by any means. In a few decades' time, the name of Maastricht will not be remembered for any of
1390
the matters that have been talked about so far and that this debate has been concerned with. I believe that the name of Maastricht will be remembered because that was the time when the European Parliament was finally given full and formal power to appoint the Commission. It strikes the eye at once that this power goes far deeper than it says. It will be open to the Parliament, if it can achieve a consensus in advance, to refuse to appoint any Commission which is not committed to doing the things that it wants during the next four years.
That has, in fact, long been the case. The Parliament could have dismissed the Commission and refused to reappoint another until it had the commitments that it felt the Commission ought to have made to it. It will certainly be easier now for it to use that power. The fact that it has taken so long to achieve, and that the earlier and lesser power was never used or even considered, we must attribute largely to the relative isolation of the Parliament in Strasbourg over the years. Now that it is no longer so isolated, and meets more often at committee and party group level in Brussels, and has this perfectly explicit power in its hands, we may hope to see the Commission falling, as it should, under the control of the elected Parliament. Here we have—
Lord Hailsham of Saint Marylebone: My Lords, nine minutes!
Lord Kennet: My Lords, the word has gone round that we may relax, though I do not know on what authority. We have here a true parallel with the development of our national democracies. Gradually, governments fell under the control of the elected parliaments and a new government had to be so constituted as to satisfy the elected parliament. We now see that beginning to happen in the European institutions.
5.50 p.m.
Lord Sherfield: My Lords, about 40 years ago Her Majesty's Government were confronted with what would now be called an ambush in the conclusion of the Schuman plan without previous warning or consultation. Jean Monnet came over to persuade us to accede to it. It contained a commitment to federalism and that ensured its rejection. We, and I believe also M. Schuman, were prepared to negotiate. M. Monnet, working through Adenauer, dissuaded him from doing that; so there was a fait accompli. Nevertheless, Her Majesty's Government played a full part in managing the Coal and Steel Community without making a political commitment.
So on the federal issue the attitude of Her Majesty's Government has not changed in 40 years. The difference today is that as we were in the negotiations we were able to get the wording altered. We might have done the same thing in 1950 if we had had the opportunity.
It is interesting to compare the roles of Jean Monnet in 1950 and Jacques Delors in 1990. Monnet was motivated by the desire to join France and Germany indissolubly together to prevent a further conflict. Delors seems to be motivated similarly. But

1391
their styles differ as much as do those of the Prime Minister and Mrs. Thatcher. Monnet worked behind the scenes. His only ambition was to achieve his objectives. Delors seems to prefer the limelight and not to conceal his ambitions. Both those unelected officials have profoundly and equally influenced the conduct of policy.
After the Schuman plan came the Messina conversations which led to the EEC treaty. I was in Washington at the time, and I have never fully understood why we withdrew our representative from Messina. But whatever the reason, and the course of events would have been different had we not done so, the negotiations must surely have broken down on agricultural policy as they did when the Government tried to negotiate an industrial free trade area with the exclusion of agriculture. After all, even from the inside we have had little luck in curbing the excesses of the CAP.
Historians, and indeed others, are fond of telling us how often the Government have missed a bus, but more often than not these buses were not really there, or, if they were, their destination was one to which the Government, with full contemporary public support, were not prepared to go. The big milestone has been the Single European Act. That was a bus which we were prepared to take and which has led us to the present conjuncture. The great difference from past years is that the Labour Party has now boarded, not perhaps the same bus, but one with a destination marked "Europe".
One more thing has not changed. As the noble Lord, Lord Bethell, said, the attitude of the United Kingdom and most of our European partners to commitments still differs fundamentally. The difference is sometimes called—I think the noble Lord, Lord Bethell, used the expression—a cultural one, though I am not sure that that is the right word. Most of our European partners are all too ready to subscribe in writing to principles which they have no serious intention of applying, while we, with the Danes, are reluctant to put our names to anything which we are not prepared to carry out with the minimum of delay. The result is a rush to set distant objectives before the first objective has been reached, and so, in my opinion, the Prime Minister was quite right to try to apply the brakes at Maastricht. For better or for worse, this has been the British role in all the international negotiations that I can remember.
Perhaps I should know the figures, but can the Minister tell us this evening, first, how many of the required steps towards the single market have now been agreed by all 12 EC members? Secondly, what prospect does he see of completing the process by the end of next year or even by the end of 1993? Only yesterday I read that the Financial Services Directive, so important to the United Kingdom, had been stalled for six months owing mainly to French intransigence. Should we not harp more often on this theme?
There are other issues which demand settlement here and now rather than in 1994 or 1999. One is the conclusion of the Uruguay Round; the other is the expansion of the Community. They both, especially
1392
the former, require urgent action. On both issues, however, I believe that the Minister could confirm that the Government are doing their best.
5.55 p.m.
Lord Marlesford: My Lords, as a newcomer to your Lordships' House I rapidly became aware that there is a convention that party politics intrude rather less here than they do in another place, where I spent some time observing but not participating in the debates. On the other hand, given the amendment put down by the Labour Party and given what the noble Lord, Lord Williams of Elvel, has said, I shall allow myself to make some political comments. After all, not only are we entering a highly political point but the decisions made at Maastricht were taken in a highly political context.
I found remarkable—it may be unprecedented— the extent to which my right honourable friend the Prime Minister was prepared to reveal precisely, accurately and fully his negotiating hand when he spoke in another place during the debate before Maastricht and the extent to which he actually achieved the objectives that he set out to achieve. Whether or not one likes them, it must be admitted that the objectives he set himself appear to have been achieved—although, if the noble Lord, Lord Stoddart of Swindon, is to be believed, the French think that they have won. However, M. Jacques Delors, by his denunciation of Britain's failure to sign up to the Social Chapter, seems to think otherwise.
The position of the Labour Party is very difficult. I appreciate that and sympathise with it. For many years the Labour Party was strongly opposed to membership of the Community on the perfectly sound and consistent ground that it saw the Community as an obstacle to the achievement of socialism. Now the Labour Party appears to be prepared to endorse full participation because it sees the Community as a bulwark against economic liberalism. But the Labour Party wants, where it can, to go further, in areas like the Social Chapter, forgetting, as the noble Lord, Lord Williams of Elvel, told us, that it is in favour of subsidiarity. If ever there were a case for subsidiarity I would suggest that it is in most of the matters covered by the Social Chapter. After all, Britain's own position on many of these policies is well in advance of our Community partners; for example, the National Health Service. I doubt whether any noble Lord would deny that we have a much finer health service than any other country in the European Community.
As a result, I find the position of the Labour Party less consistent and therefore less credible than it was 20 years ago. One does not want to say things that are in any sense disrespectful or unkind about very nice people. However, do noble Lords who support the Labour Party really believe in their hearts that when a crucial moment comes on 1st July when Britain accedes to the presidency of the Council of Ministers our national interests would be as well served and protected by Mr. Kinnock and Mr. Kaufman as they would be by Mr. Major and Mr. Hurd? I really do not believe it.
Lord Williams of Elvel: I believe that the noble Lord has not read the Social Chapter.
Lord Marlesford: Well, I would exclude my friend Mr. John Smith from that particular stricture because I note that as recently as 24th November he said:
"We should not commit ourselves now, in advance of 1997, to enter a single currency".
If the Labour Party really believes in subsidiarity, perhaps its leader could apply the principle to allow Mr. Smith to lay down the economic policies. Clearly Mr. Smith took a sound approach at that time.
Perhaps I may move on to what is a crucial issue, especially so to the Liberal Democrats. I refer to federalism. The Liberal Democrats and the Liberal Party have always, I suppose, been well ahead of public opinion in European matters. That is a prerogative of a party that does not expect to form a government. But it can be dangerous. I believe that federalism can itself result in political danger if it is created in the wrong way. For example, if a federation is created organically and naturally by centripetal forces, it is sustainable. But if it is created by confining centrifugal forces from the outside, then as soon as that confinement is removed the structure is likely to fall apart.
We have seen that in the Soviet Union dramatically day by day, and tragically in the case of Yugoslavia. But there have been cases in Britain's recent history where, in achieving decolonisation, we tried to impose federations which seemed very neat but which were not actually viable. For example, the federations of both Central Africa and the West Indies flew apart and Malaysia did not last very long. My noble friend Lord Selkirk will remember the problems that he had at the time as Commissioner General in South-East Asia in trying to persuade Mr. Lee Kuan Yew to accept federal union with Malaya. I see federation as being like a glue. If one is trying to glue something one can hold it together for a while but, if the glue is tacky and never solidifies, whenever one removes one's hands it once more separates.
Probably the best example we know of a federation which has really worked is the United States of America. That has been truly organic. I think that we should marvel at the wisdom of the Founding Fathers who wrote a constitution which has lasted for 200 years with only 26 amendments. They anticipated many of the problems about which we are talking in connection with Europe. Let us take, for example, subsidiarity. The first 10 amendments in December 1791, as your Lordships know, formed what is now shortly called the Bill of Rights. The tenth of those amendments reads as follows:
"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people".
You could not have a clearer statement of subsidiarity than that.
I believe that the British people need time to take on board the future developments of Europe. They are very cautious. We have long traditions; longer than those of most of the other countries in the Community. After all, we are a much older country than most of the others. We surrender our traditions reluctantly. Sometimes not very important matters are
1394
involved. For example, some still find it strange that in the weather forecast the temperature is now given in centigrade rather than in Fahrenheit, and some of us find it difficult to reduce our acres to hectares. However, gradually we take all these changes on board.
The brilliant negotiations by and achievements of our Prime Minister at Maastricht have given us time. Over the next five years or so all our options are open. We shall be able to move with others, or not, as Britain's national interests then dictate. That is why I believe that we should be giving a hearty endorsement to what I am sure will go down in history as a considerable achievement last week.
6.4 p.m.
Lord Desai: My Lords, it is always a pleasure to follow the noble Lord, Lord Marlesford. I especially liked his image of something held together with tacky glue which may fall apart if one removes one's hand; my concern is for the unity of the party opposite, which has been held together by the tacky glue of the Maastricht agreement.
However, if we examine Maastricht and ask ourselves what has been achieved, we shall come to correct the current feeling of euphoria. Let us first look at the protocol which has been the great victory won at Maastricht. The protocol excludes the United Kingdom from certain conditions which have to be met if a country is to join the single currency union. Article 109F lays down four conditions. They are price stability, sustainability of the financial position of the government, no excessive fluctuations of the exchange rate and low interest rates.
Do the Government not like those objectives? Do they no longer like price stability? Do they love excessive fluctuations in the exchange rate? Have they abandoned their principles about deficit? Do they like high interest rates? Further, are the Government saying that the conditions laid down in Article 109F are so bad for the country that we do not want them and that we want something different? Surely that cannot be the meaning of the protocol which we have signed.
All the protocol says is that countries should not have inflation or excessive fluctuations in the exchange rate or large deficits. If the Government say that they do not think that by 1997 they can achieve those conditions, and if they think that we shall not have low inflation, stable exchange rates or low deficits, then they should say so. We should then know that they are admitting that they have utterly failed over the past 11 years to achieve all the aims that they said they would achieve. They came to power promising financial probity and saying that deficits were bad. If they are now asserting that deficits are good, as the Financial Times said, then Mr. Major has won the right to devalue. If they have won the precious right to devalue, then let them say so. If that is the case, perhaps they would like to congratulate themselves, but I wonder whether the country will congratulate them.
But perhaps that is not the position. We know that the protocol is not actually a meaningful document in

1395
terms of national interests; it is really a sop for the Back-Benchers in the Conservative Party. It cannot be the case—in fact, I find it hard to believe—that the Government are promising us lots of inflation, lots of devaluation and large deficits.
We must ask ourselves what is going on. If there are no obstacles to achieving the convergence conditions in the treaty, what is all the fuss about? Normally, one cites the example of Sherlock Holmes and the story of the dog that did not bark. But I have a surprising story about a chancellor who spoke when he had no need to speak. Last week the Chancellor of the Exchequer promised unprovoked, that the Government are committed to the exchange rate mechanism, that they wish to move within the narrow bands and that they will not devalue. I ask myself: why would a chancellor, unprovoked and not under any pressure, suddenly say such things?
On reflection, I think that a secret protocol was signed at Maastricht. I believe that Mr. Major said to the other 11 countries, "You understand my difficulties. Behind my back there are people who are likely to do anything. So, if you let me sign the protocol saying that I will not join, in return I shall promise to do everything and more so that that eventuality does not arise: I will move into the narrow bands and I will promise not to devalue". That promise, given so soon after Maastricht, tells me that the Government have said one thing to their party and another—the more correct thing, I am glad to say—to the other 11 countries. That is why this meaningless protocol has been signed. It will have no effect. I am sure that a decent interval will pass after Thursday's vote and that the Government will sign up and forget about the protocol.
The great achievement at Maastricht was to keep the man from Essex and the woman from Grantham quiet. The Government may have triumphant support within the party. However, we have all been diverted from a true appreciation of the challenge that we face.
I have read and admired the works of my noble friend Lord Jay. I have to say to him that I was against the decision not to devalue which was taken in 1964. Like Lord Keynes, I believe that the 1925 decision was wrong; but we live in a different world today. Today, one country within a multinational context where there are free capital movements cannot afford to pursue unilateral devaluation. That is the way to ruin.
There are no eventual universal truths in economics. One must study the situation in which one finds oneself. If we want high employment and prosperity we must have a strict financial discipline. I, who was an unreconstructed Keynesian—I still consider myself to be one—still say that we should wait until we have a single currency, and then I shall revert to my unreconstructed habits. In the meantime, the UK, as a single region within a large multinational economy, cannot afford to be anywhere else than within the ERM, and the sooner we get into the narrow band the better.
The Government have adopted various financial theories and policies. We have had monetarism and abandoned it; we have had Keynesism and abandoned it; and we joined the ERM after having said that we
1396
should not join it. I hope that the same thing will happen over the Social Chapter. After lengthy protests that we will not join it, there will I hope be the same change of heart that there was over the ERM and we shall sign up like good boys and girls. I hope that, by the time the Community presidency passes to the United Kingdom in July, Mr. Kinnock and Mr. Kaufman will have signed up to the Social Chapter. The sooner that happens, the better.
6.12 p.m.
Lord Rochester: My Lords, it would be wrong for this important debate to end without a rather more detailed contribution than has so far been possible from these Benches about our attitude to the Maastricht protocol on social policy and the agreement reached by 11 of the 12 member states on the Social Charter.
In the past we have argued consistently that the European Community should have a social dimension. We supported the principle of the Social Charter when it was introduced in December 1989. We are critical of the then Prime Minister for not signing it. However, where the charter was basically a declaration of principle only, the draft Social Chapter which eventually reached Maastricht went further.
My party believes in the principle of so-called subsidiarity, and considers that it should apply in a social area as much as in any other. At the same time, we wish the Community to develop a common framework of minimum entitlements for its citizens; of employee involvement and share ownership; and of minimum standards of health, safety and employment protection. The Commission should not however, in our view, hand down from above detailed prescriptions on such matters. On the contrary, member states should be left to determine how those entitlements should be applied at lower levels and in some cases within individual companies.
Those considerations caused us a number of anxieties about the draft Social Chapter. For example, Section 3 of Article 118 of the agreement concluded by all the member states except the United Kingdom, gives the Community competence with regard to representation and the collective defence of the interests of workers and employers, including co-determination. There is a danger that that provision may give the representatives of employers and trade unions too privileged a position in the legislative process.
I shall take the opportunity to add that, arising from my industrial experience, I am also worried about the draft directive for the arrangement of working time, especially in relation to the provision regarding night work and shift work which may soon become part of the social action programme. Those provisions do not form part of the Maastricht social agreement, but we may still be faced with them because they stem from the Treaty of Rome, as amended by the Single European Act. If implemented in the United Kingdom, they would prove damaging to companies, for example, in the chemical industry,

1397
which relies heavily upon continuous-process work, and has to compete not just in Europe, but with its American and Japanese counterparts.
Having said all that, I do not believe that the noble Lord the Leader of the House was justified, after having repeated the Statement on Maastricht last Wednesday, to claim:
"We could not accept a text which would allow the Community to adopt measures which would drive a coach and horses through our trade unions reforms of the past 12 years".—[Official Report, 11/12/91; col. 779.]
Today, he has said much the same thing, albeit in rather more moderate language.
Nothing in the Social Chapter would have required the Government to repeal their trade union legislation. Section 6 of Article 118 of the agreement reached by the other 11 member states provides that the article should not apply to pay, the right of association and the right to strike or to impose lock-outs. Even the section of that article to which I referred earlier requires the Council to act unanimously on a proposal from the Commission: so the British Government could effectively have vetoed any proposal coming forward under that section if they so wished.
I conclude that it is a cause of great regret that instead of continuing to be in a strong position to fight this country's corner within the Community, the Government have committed Britain to exclusion from the agreement on social policy. We are now barred by the protocol from taking part in further deliberations in matters covered by that agreement. We shall therefore be severely handicapped in seeking to influence the future development of European social policy to ensure that it is suited to conditions within the United Kingdom.
It will be ironic indeed if, in the end, we find ourselves obliged to subscribe to the agreement on social policy which we have rendered ourselves powerless to shape.
6.19 p.m.
Lord Beloff: My Lords, we have been placed in some difficulty in our debate this afternoon—this was referred to earlier by one of my noble friends—as a result of the absence of a substantive Motion from the Official Opposition. Many noble Lords may have been wondering why. I can now offer them an explanation, having done a little detective work. It was apparently decided that there should be a substantive Motion, and a sub-committee was set up to draft it. That sub-committee consisted of the noble Lords, Lord Clinton-Davis and Lord Stoddart of Swindon. Regrettably, they failed to find a form of words which their Front Bench could accept.
The same cannot be said for noble Lords on the Benches opposite me. They have no hesitation in explaining their withholding of congratulations. They have a commitment which has just been repeated, even in the moderate and interesting speech of the noble Lord, Lord Rochester, to a form of European state. Again looking for parallels, they remind me of the executive directors in the late Robert Maxwell's companies. We are told that they would have pieces of
1398
paper put before them and would sign them without reading them. It seems to me that noble Lords on the Liberal Benches will take anything that comes from Brussels and sign it. They may think it is nonsense, but that is the impression one derives from speech after speech—from the noble Lord, Lord Jenkins of Hillhead, who, alas, is not in his place and from the noble Lord, Lord Bonham-Carter, who, perhaps wisely, is not in his. They continually repeat that it is all necessary to reach, not merely something so contemptible as higher standards of living or greater security but paradise itself, provided that we agree that M. Delors is the prophet of the day.
It seems to me that the great problem faced both by noble Lords on the Liberal Benches and by many— though not all —noble Lords on the Labour Benches is that they talk about a world which, if it existed, might be very nice; but it does not exist at all. They live in a world of the imagination. The noble Lord, Lord Clinton-Davis, extols the hostile comments made by Commissioner Di Meana on the British environment. But Commissioner Di Meana is the nominee of a government who do not even pretend to carry through the decisions of the Community. They are a government—
Lord Clinton-Davis: My Lords, I am grateful to the noble Lord for giving way. Is he not aware that, on the very day when action was precipitated concerning the United Kingdom, similar action in respect of other matters relating to environmental impact assessment was taken against the Italian Government by the gentleman whom he now reviles?
Lord Beloff: My Lords, I do not revile the gentleman, I am sure he is an honest man; "misdemeanour" is perhaps a more honest description of his actions. The point is that, though he takes, or initiates, measures against his own government, he must know as a citizen and politician in Italy that that does not have the same effect as when directives are accepted by this Government and this Parliament. He knows it perfectly well and therefore whether or not he brings an action is, from the point of view of what happens, largely irrelevant.
The noble Baroness, Lady Turner of Camden, said that Europe for some decades now had had the tremendous and inspiring policy of a social relationship between capital and labour. One would imagine that it had had benign effects. No doubt in Germany, and perhaps one or two other countries, there has been remarkable progress in relations within industry. However, is the noble Baroness aware that in France, for example, we now see a constant succession of strikes at a period of massive unemployment? Does this principle, to which no doubt the French have acceded on paper, give them the kind of social stability which it is assumed we should have if we were to take the same verbal formulation to our hearts?
I believe that it is important for people who talk about this serious subject of European unity not to confuse vapid aspirations in words with deeds. I say this because, although most noble Lords have taken the view that Maastricht is very important and has been a great event and although the Prime Minister is

1399
to be congratulated on a perfectly valid defence of the United Kingdom's positions, it is by no means the most important event happening now. The most important event is the break-up in Eastern Europe and the transformation of a continent.
We live in a dangerous age. It is all very well going to Maastricht and reaching a compromise as to how we are to have a common foreign policy. Then we find the Germans using their undoubted and understandable muscle in the Twelve, forcing the rest of us to adopt a policy towards Yugoslavia which we all know, and which everyone who knows about Eastern Europe is convinced, can bring nothing but further death and suffering. If the Germans believe that Croatia should be defended—and the Croats have a case against the Serb aggressors—let them be active in their defence. But merely to say that everyone will recognise them, to assert "We have brought Europe round to see the justice of your cause", and then to leave the Croats under Serbian bayonets seems to me to cast doubt on whether we are yet ready or can be ready for some time for the degree of unity which is assumed.
It has been suggested that one of the advantages of Maastricht is an opening towards enlargement. I believe that my noble friend the Leader of the House suggested this and I hope that it is the case. I am sure that Her Majesty's Government will press for it to be the case, but the text assumes that, in relation to voting power and so on, there will be no enlargement in the lifetime of this revision of the treaty.
When we discuss these matters I implore noble Lords—and I repeat what I said before—let us realise that Europe is on the brink of a possibly appalling catastrophe. As we speak, people in Yugoslavia are being massacred, subjected to bombardment from the air. We have a cultural chapter in the Maastricht treaty. I hope that our colleagues will help us to live up to it in the protection of that gem of European architecture, Dubrovnik. I implore the House: take this seriously and not as a matter of party politics, which seems to be the only matter which concerns the noble Lord, Lord Desai.
6.28 p.m.
Lord Dean of Beswick: My Lords, not surprisingly, I shall confine my comments to that part of the debate which has involved much discussion from this side; that is, the rejection of the Social Charter and all that it entails. I shall not go down the same road as my noble friends Lord Murray and Lady Turner because they dealt with a difficult situation more adequately than I could.
I wish in passing to point out to the main speakers on the other side who defended the rejection of the Social Charter and all it entailed that the Government's case depends on the fact that it would impede and retard a recovery if one started to take place. It would destroy the favourable conditions under which we operate.
I commence by referring to the noble Lord, Lord Boyd-Carpenter. Unfortunately, he is not here today and I make no criticism because he is one of our most avid attenders and one of the most consistent contributors to our debates. He referred to the theme
1400
in a statement last week that we would be jettisoning the favourable position from which we are now able to operate.
The noble Lord, Lord Young of Graffham, a former Secretary of State in your Lordships' House, was responsible for introducing a shoal of trade union legislation into your Lordships' House. That legislation is now on the statute book and the Government are frightened they may lose it. I accept that much of the trade union legislation was necessary. I have always believed in ballots for certain courses of action, as does my union. However, we must remember that the legislation that sought to remove the wages councils had nothing to do with productivity. That legislation hit the weakest section of the workforce. Those people have no muscle anyway. I should remind the House that some of the wages councils were established at the request of Sir Winston Churchill, who could hardly have been accused of being pro-trade union. He realised the weakest people in our society needed protection from some of the worst bosses in our society.
It has been suggested that we in this country are prospering because we have the advantage of certain legislation on trade unions. However, that myth was completely debunked in another place by the Leader of the Opposition, despite the interventions of four Cabinet Ministers who tried to destroy his argument. When he had finished speaking. Members on the Government Benches were totally silent. He said that most of the legislation on the statute book concerning the trade union movement in this country could not be altered. It is totally free from any interference on the part of the Commission. I believe this matter has been referred to today.
The right honourable Michael Howard is, in my view, an anti-trade union Secretary of State for Employment. Both he and Mr. Major have said that our trade union legislation cannot be interfered with by the Commission and yet they are still trying to justify their rejection of the Social Charter.
Lord Harmar-Nicholls: My Lords, will the noble Lord give way?
Lord Dean of Beswick: My Lords, the noble Lord is taking up my allotted time. I will not give way to him as my time is too tight.
Let us consider how well our economy is faring with the so-called advantageous legislation that has been passed as regards trade unions. The Engineering Employers Federation has just produced an economic assessment which shows that in engineering—that is the biggest sector of manufacturing in the country— some 170,000 jobs were lost this year. The federation predicts another 70,000 jobs will be lost in the near future. Article after article appears in the press to contradict our supposed state of prosperity. A headline in the business section of The Times of 17th December states:
"Factory output falls for third month running".
The latest published employment figures reveal the true situation. A press notice of 14th November from the Department of Employment states:
"The number of employees employed in manufacturing industry in Great Britain at 4,693,000, is estimated to have

1401
fallen by 18,000 in September 1991. Employment in manufacturing fell by 348,000 over the year to September 1991, compared with a fall of 68,000 in the previous twelve months".
Therefore nearly a third of a million jobs have been lost in the manufacturing sector between September 1990 and September 1991. Yet we are told favourable conditions for industry have been created in this country through the Government's anti-trade union legislation.
It is about time we were told the true facts. Then we could get the position in perspective. As I have already said, some of the trade union legislation was necessary, for example on ballots for selecting officials and on strike ballots. One cannot argue against those measures. Nevertheless I maintain that it is unfortunate that some of the legislation that was introduced in this House by the noble Lord, Lord Young, constituted an attack on the standard of living of the lowest paid people in our society. It is a tragedy that to give the appearance of having cemented a crumbling party together, the Prime Minister has removed from the poorest people in our society—they have no one to fight for them—the right to a reasonable wage. I hope the electorate will take note of that. I believe they will as the policy has not been successful.
6.36 p.m.
Lord Mackay of Ardbrecknish: My Lords, I am delighted to have the opportunity to contribute to this debate. Earlier in the week I considered adding my name to the list of speakers but I noted that there were already a large number. Therefore I decided not to add my name at that stage as today I have a party of visitors from Italy with me who are en route to Scotland. Fortunately, thanks to the way noble Lords have kept to their time limits, there is a gap into which I have been parachuted. My visitors who are en route to Scotland from their workplaces in Italy have listened to parts of the debate today on two occasions. They were most impressed.
During the debate I have occasionally had cause almost to pinch myself to keep awake. I believed I was dreaming when I heard members of the party opposite say how impressed they are and how they applaud the European Community. I thought I was dreaming because twice in my political life I recall acting in favour of the European Community. I cannot remember that on either occasion I was stampeded by members of the party opposite in their haste to be on the same side. The first time I acted in favour of the European Community was at the time of the referendum on Europe. I can certainly recall that some members of the party opposite and some members of the Liberal Democrats extolled the virtues of the European Community at that time. The referendum was successful.
The second time occurred when, in another life down the Corridor, I voted in favour of the Single European Act. I cannot recall seeing vast numbers of the party opposite in the same Division Lobby. However, I am pleased to hear them talking in pro-European Community terms today. I am pleased
1402
at that because it is important that we should be in favour of our membership of the Community and that that should apply across the whole political spectrum. However, I take it rather hard when noble Lords opposite complain about what this party is doing as we have had such a long and honourable record on the European Community. They complain that we are somehow not pulling our weight in Europe. That is not the case. We are simply saying to people in the European Community that we should act in sensible ways that enable us to achieve things. It is terribly important that we should not make the European Community an inward-looking Community. Let us not build around the European Community huge barriers to trade and other matters.
A week or two ago in your Lordships' House we discussed the GATT. That was an excellent debate in which we explored the need to free up world markets and trade. However, what worries me a little sometimes is that there is a danger that the European Community may become an inward-looking organisation and may erect large trade barriers. The common agricultural policy is certainly an example of that. Such a process would be contrary to the interests of this country, of Europe or of the world.
In his speech a few moments ago my noble friend Lord Beloff reminded your Lordships of all the other events which are happening, not in the rest of the world but in the rest of Europe. Occasionally during the Maastricht Summit I became a little worried that we in the Community were discussing matters relating to Maastricht while there was mayhem in Yugoslavia and dramatic changes were taking place in what was the Soviet Union. Those changes are such that, if two years ago I had suggested in this House that they would take place, your Lordships would definitely have asked for the gentlemen in white coats to come to take me away. Those events have happened and are happening.
Therefore I was worried, as I have been during much of the discussions on the Community, that we have become so inward looking that we are ignoring the great events which are taking place on our own continent. We should be making sure that our Community is able to react to those events and to draw in all those new countries—not only the well-off countries of Northern Europe which are waiting at the door to come in but the countries of Eastern Europe which need the help and support which we in the European Community can give them.
That is why I believe that what my right honourable friend the Prime Minister has achieved in Maastricht is in the interests of the Community as well as in the interests of the United Kingdom. He got the others to agree to what we are now embarking on. Listening to the debate I sometimes wonder whether the others agreed; but everybody, the Prime Minister and all the other leaders, signed the treaty at the end of the day.
There are two or three very important aspects of that agreement. One is the EMU. However, the importance of convergence cannot be overlooked. It is not guaranteed and it is not automatic. It is only sensible that we should say, "Yes, let's proceed, but let's leave the final decision until a lot nearer the day

1403
when the final decision has to be taken". That seems to me to be entirely sensible because convergence will not be an easy matter. One just has to read of the kind of economy they have in Greece or Spain to see that there is huge divergence between many of the countries of Europe. That divergence may well increase if the Community is expanded. Therefore we should be careful. That is what I believe my right honourable friend the Prime Minister recognised in his negotiations in Maastricht on the subject of convergence.
All that I would say to your Lordships on the subject of the Social Charter is that I believe that subsidiarity—that dreadful word—should apply. I believe that issues covered by the Social Charter and many other aspects of Community life are best decided by the individual member states and the individual member governments. It is very important that we ensure that subsidiarity occurs and that there is no interference from the centre. There is interference from the centre but the centre must try to resist interfering.
I understand that recently in connection with environmental matters bureaucrats in Brussels said that pressure groups go to them and plead with them to intervene. I say to them that they should resist the temptation to intervene. If subsidiarity means anything it means that the people in Brussels will often have to resist that temptation and allow individual member states to do what they believe is best in the interests of their people.
I believe that my right honourable friend the Prime Minister has done the United Kingdom and the Community a service by his work at Maastricht. I hope that tonight the House will give him an overwhelming endorsement.
The Earl of Selkirk: My Lords, on the subject of Yugoslavia, perhaps I may say that I do not believe that anyone could have done more than my noble friend Lord Carrington.
Noble Lords: Hear, hear!
Lord Mackay of Ardbrecknish: My Lords, I do not disagree.
6.48 p.m.
Lord Barnett: My Lords, I apologise for having missed my slot on the speakers' list and I am grateful to your Lordships for allowing me to say a few words now.
I understand why those who have always opposed Britain's closer integration with the European Community are opposed to what the Government have done. I find it little more than astonishing that others who have always opposed our closer integration with the European Community have now accepted the propaganda and find it all marvellous. For myself, I have always taken the opposite view. My credentials are quite clear. In 1971 I voted against a three-line Whip, together with some of my noble friends, in favour of our entry into the Community. In 1983 I made my maiden speech in your Lordships' House in favour of our full entry into the exchange
1404
rate mechanism, which took a little longer for us to achieve. On the other hand, from an entirely different standpoint, I want to make it clear why today I too oppose what was agreed at Maastricht. Perhaps I may explain.
The opt-out, or opt-in, protocol to the third stage of economic and monetary union and a single currency is quite meaningless, as the noble Lord, Lord Desai, said earlier. I believe it to be damaging to Britain's interests. One has only to imagine 1997 or 1999, when the third stage is intended to become irrevocable under the terms of the treaty. The noble Lord, Lord Jay, was quite wrong to say that convergence is not possible, because the form of convergence is spelt out very clearly in the protocol. We are not talking about wide convergence but about four specific issues. There is a possibility of convergence. However, let us assume that there is no convergence. In that case there is no single currency and there is no third stage of economic and monetary union. However, if, as is much more likely, a majority of the 11 are able to find a satisfactory convergence and enter the third stage so that there is a single currency, does anyone imagine that. Britain will be able to stay outside it?
Yesterday, in reply to a question from the noble Lord, Lord Monson, on the exchange rate mechanism, where a similar situation applies, a Minister said that even if we were outside the exchange rate mechanism we would still be compelled to abide by many of the rules which we abide by now. That would apply, one might say with knobs on, if we were outside the third stage of economic and monetary union. Those who do not accept that make a totally unrealistic assessment of the UK's economic position both now and as it is likely to be in 1997 or 1999. It is nonsense to imagine that we could stay outside.
While I am dealing with the meaningless part of what was achieved and what was called a great triumph, perhaps I may ask the Minister when he winds up the debate to answer a specific question. I have read the protocol and the details of the areas from which we are excluded. Will the Minister confirm that, despite the protocol giving us the right to opt in or opt out and the other exclusions from the treaty, the Government will still seek to meet the convergence criteria spelt out in Article 109F? If the answer is no, we shall not be in a position to opt in in 1997 or 1999. I should be grateful to the Minister if he would explain that point. While he is about it will the noble Earl also confirm that we go along with sustained convergence as set out in Article 103? That is equally important because it also includes a monitoring element. Although the exclusions are very difficult to interpret, my understanding is that the Government are also committed to that.
It is precisely because the so-called triumph will be meaningless in practice that I believe that we have achieved nothing at Maastricht. In the process we have done ourselves considerable damage. We have been seen to be spending months niggling over something which makes little or no difference. Even if the Government are right and we remain at the heart of what is happening in the Community, our influence

1405
on the run-up to full economic and monetary union is inevitably bound to be reduced. As an example, I believe it was the noble Lord, Lord Cobbold, who pointed out that there is no chance whatsoever of a European bank being based in the UK, preferably in Manchester. More importantly, we could have had a major voice in determining the powers of the Council of Ministers over an unelected Commission and an unelected central bank. That is what we should have been negotiating at Maastricht.
Quite wrongly in my view the Government—and the Opposition—have conceded without a peep that the Council of Ministers will have virtually no control over an unelected Commission and an unelected central bank. Under the protocol we are specifically excluded from the right to appoint the president of the bank, the vice-president of the bank and all the executive members who will be appointed for eight years. That is what we have excluded ourselves from. To say that we shall have all the influence that we would have had whether or not we had signed the treaty is frankly untrue. We shall simply not have that degree of influence. Instead of giving ourselves what Ministers have called freedom of choice, we have given ourselves the worst of all worlds.
6.50 p.m.
Lord Thomson of Monifieth: My Lords, the Maastricht Treaty, which has been the subject of this important debate, is a massive document. It has emerged during the debate that a great deal in it commands general support and that a good deal of the Government's approach to what is in it is not a matter of dispute across the Floor of the House. No one who has spent a good deal of his life in the rough trade of politics would begrudge the Prime Minister his personal success at Maastricht, nor the style and tone with which he achieved it.
However, in the time that is available to me I want to concentrate on the two main issues of controversy which have emerged during the debate and which are reflected in the two amendments that stand on the Order Paper: the Government's attitude to the single currency and particularly their attitude to the Social Chapter.
The Government are triumphant—the Leader of the House was triumphant earlier this afternoon—that they have, to use the words on the Order Paper, secured their negotiating objectives on these matters. So they have, but the real question is, were those objectives the right ones in the first place, and now that we have an opportunity to judge, is the political price likely to be worth paying? Because the Maastricht result seems good for the Prime Minister and his party, it does not follow that it is also good for Britain and the Community. Despite the robust assertion of the noble Lord, Lord Boardman, and, I believe, the noble Lord, Lord Aldington, that we remain at the centre of discussions about the future of EMU—I accept that that is so—it is not to be believed that we can now continue to have the influence over those discussions that we would have had if we had not taken the opt-out formula.
1406
We on these Benches believe that the Government's policy has been seriously damaging to British interests in the Community for a very simple reason which I may perhaps explain in personal terms. When I had the task in a long-ago Labour Government of preparing British negotiations for entry, and again as a European commissioner—an experience shared by a number of my colleagues who have spoken today—I found an albatross continually hanging around Britain's neck. In the jargon of Brussels it was the aquis communautaire—the accumulation of decisions already taken by the member states of the Community in their own interests—which we were compelled to accept as a condition of entry. Those decisions were taken when we were not there to influence them. The origins of that go back to our absence over the Schuman plan and over Messina, as has been mentioned in the debate, but we certainly could do little or nothing about President de Gaulle's two vetoes on our entry.
However, this time—this is the point that I want to make with all the force that I can command—in the social field in particular we are deliberately counting ourselves out. The 11 will go ahead to create a new aquis communautaire in their own interests on social matters, which will undoubtedly create future problems for Britain. That extraordinary 11 to one formula which the Government forced on their partners at midnight means that the British social Ministers will have to sit in voteless silence while their colleagues operate that curious social sub-community on their own in their own interests.
I shall be interested to know what will happen during the British presidency. Will a silent British chairman preside over the matters that come under the Social Chapter? What about the role of the British Conservative MEPs? Are they to go on exercising their undoubted right to speak and vote, perhaps occasionally swinging critical votes in the European Parliament on social policies from which their own constituents are to be exempted by the Government in this country? I can see Mr. Tam Dalyell's famous Lothian question about Scottish MPs, once they have a parliament of their own in Scotland, continuing to vote down English policies being replaced by the Strasbourg question. What will the European Court make in due course of the Government's effort to turn itself into a European version of a third world, cheap labour country by avoiding obligations regarding working conditions that even the poorer members of the Community are prepared to accept?
We agree with the Government that the Commission sometimes seeks to intervene in the social field in unnecessarily intrusive ways. I give the Government full credit in that respect. The Leader of the House mentioned the way in which we have enacted the various directives under the social action programme, but surely the lesson from that argument is that we shall best look after our interests by being inside the social arrangements in order to influence the decisions that are made.
I commend a thoughtful article in the Independent last Thursday by Mr. Peter Kellner. He showed arithmetically how under qualified majority voting

1407
Britain could have modified proposals that it did not like or even have had them dropped. Without Britain, the arithmetic will be very different. The social policy enthusiasts in the Community will have their own way and, when Britain finally signs up, as one day we will do, we will be forced to obey laws that we could otherwise have blocked or amended.
The argument that M. Delors, armed with the new Social Chapter, would put Arthur Scargill back on his throne is hardly worth considering. It is simple electioneering and not very plausible electioneering. The most cursory glance at the small print of the Social Chapter shows that the structure of Conservative trade union law is untouched by what will be enacted under the new Social Chapter.
Maintaining party unity in the face of an impending general election has clearly emerged as the main motive of the Government's policy at Maastricht. In this House we all understand the compulsions of election politics and one must not become too self-righteous about the matter. Nevertheless, it remains sad when a Government feel it necessary to give party considerations priority over the country's national and international interests.
The Prime Minister's remark that he wished Britain to be at the heart of the European Community has been widely quoted in the debate. He has instead emerged from Maastricht at the heart of his political party, but standing on the sidelines of the Community on the major issues of building a united Europe. The noble Lord, Lord Young, who is not now in his place, made the rather curious remark that our policy at Maastricht put us in the fast lane of the Community. That took our breath away on this side of the House. The Prime Minister is a football fan. I have no doubt that at his favourite football stadium of Stamford Bridge, the linesman is in the fast lane of the game, but he is still on the sidelines. We would much prefer that the Government were there in the middle of the playing field, battling both for British and European interests.
Like other noble Lords who have spoken, we hope that in one way or another, after the election Britain will take a more positive and enthusiastic approach to the Community. My noble friend Lord Bonham-Carter made the important remark that the enlargement of the Community, which is the next stage that will face us, will demand some hard and fresh thinking to which some of the old habits of thinking inside the Community will not be wholly appropriate. One hopes that we in Britain will have a large role to play in that.
There have been the usual remarks in the debate, sometimes of a rather patronising character, suggesting how pragmatic and commonsensical we are in this country and how up-in-the-air, unprincipled and slightly unscrupulous are our partners on the mainland of Europe. Those distinctions can be greatly overdrawn. The Prime Minister might do well to remember that we in Britain are not all total pragmatists all the time. I commend to him that great English poet, Browning:
"Ah, but a man's reach should exceed his grasp, Or what's a heaven for?".
1408
So far the Prime Minister, and through him the Government, have not yet quite understood what goes on at the heart of the Community. Certainly they have failed at Maastricht to put Britain at the heart of the Community. For that reason we have tabled the amendment that stands in our name on the Order Paper.
7 p.m.
Lord Richard: My Lords, I do not propose to reiterate many of the points that have been made. I think it fair to say that over the hours the seams between the two sides of the House have emerged fairly clearly. I shall say but one word to the noble Lord, Lord Beloff. He accused this side of the House of playing party politics. That was, I believe, the phrase he used. I must reply that it is not our Motion on the Order Paper to congratulate the Prime Minister; it is not our debate. The Motion came from the Front Bench on the other side. Indeed, I understand that congratulations are supposed to be in order in the other place as well. Faced with such an overtly party political, congratulatory Motion to the Prime Minister, it is hardly surprising if those on this side of the House who do not feel that he deserves much congratulation should react. I hope that the noble Lord, Lord Beloff, at least sees that point.
As I said, the seams of the debate have become perfectly clear. The Government apparently firmly believe that they deserve to be congratulated because the Prime Minister has negotiated a strategic sidestep at Maastricht. We feel that he does not deserve to be congratulated for precisely the same reason; namely, that what he and the Government succeeded in doing at Maastricht was and remains a sidestep. They withdrew from two crucial areas of Community policy. I shall be examining some of the possible effects. But having negotiated the withdrawal in what I am told by the other side of the House was an extremely skilled, polished, effective and diplomatic way, the Government cannot then pretend, once they have sidestepped, that they have not sidestepped. The fact is that, having withdrawn from those two crucial areas of Community policy, our capacity to influence what takes place there is bound to be less.
We have seen some of the effects already. First of all, as my noble friend Lord Williams of Elvel pointed out, we were unable at Maastricht to play any meaningful part in the negotiations over the timing of stage three. When the French produced their proposals on the timing, it was hardly open at that stage for the British Prime Minister to say, "We do not agree with those timings". He was open to receive—I gather that he did receive—the inevitable response: "If you are not yet prepared to tell us whether you are going to be involved, we do not think you have much to say to us over the timing of stage three itself." That was hardly surprising.
The second effect of our withdrawal is that we shall have little, if any, influence on the course of events leading up to and into stage three. The noble Lord, Lord Boardman, disagreed and said that we should have a great deal of influence. He seemed to think that our influence would not be lessened at all. One

1409
Foreign Office Minister, Mr. Garel-Jones, recently said, "The devil is in the details". Not only is the devil in the details; a revelation is in the details. I therefore commend the noble Lord, Lord Boardman, to look at the treaty and in particular at the protocol on certain provisions relating to the United Kingdom at pages 80, 81 and 82.
It would be superfluous and indeed exhausting to read out the number of articles set out on page 81 which no longer apply to the United Kingdom as a result of our withdrawal. I shall read out only one, referred to already by the noble Lord, Lord Barnett:
"The United Kingdom shall also"
note that "also"—
"have no right to participate in the appointment of the President, the Vice-President and the other members of the Executive Board of the ECB under Articles 109A and 109H, paragraph 1 of the EEC treaty".
The next paragraph on that page gives a whole raft of articles which will no longer apply to the UK.
I cannot give way at this point. I have studiously avoided interrupting anybody in the course of this debate and, if I may say so, from time to time it has meant that self-discipline of an unusual character has been imposed upon me. If noble Lords will forgive me, I shall avail myself of the same privilege and protection that they have had; namely, relative silence.
Thirdly, I do not think anyone believes that, if stage three goes ahead and we get to the verge of a single European currency, Britain will remain outside it. I have not heard anyone from the other side of the House advocate that we should not join a European currency if we reach that stage. The argument has been: let us preserve the option.
Let us preserve the option to do what? Is it the option to withdraw at a time when the others are going ahead? That is inconceivable. It would be economic disaster for this country. Dare I say that in terms of the Community it would be almost political suicide? So why do we go through the charade of pretending that by the opt-out to the treaty we are preserving some real, hard, economic and political right which we might exercise if a single currency is to come into existence? I do not believe that. Not only do I not believe it; frankly, I do not think that Europe believes it either.
What is wrong is that we are giving the impression yet again that we shall go along with something as and when it emerges if and when the time is right. I can hear government Ministers now. No doubt they will reiterate the same rather dreary formula—if they are still there, which I doubt—in relation to joining the third stage as they did in relation to joining the exchange rate mechanism. They will say, "When the time is right, when conditions are relevant". One knows all the phrases. Those phrases will come out and yet at the end of the day we shall join. Unfortunately, we shall join reluctantly, unenthusiastically, sluggishly and grudgingly. The result is that we shall lose even more power and influence over events in the Community than we have already lost. It is very sad. It is achieving the worst of both worlds.
If our approach to a single European currency seems insincere and self-defeating, our approach to
1410
the Social Charter is almost incomprehensible, even on the narrowest of political grounds. I do not propose to bore the House by going into too many details but again it is important that we should see what is happening in terms of the treaties.
The EC has a long history of legislation and activity in the field of social policy. The Treaty of Rome itself covers a wide range of social issues. I trust that I do not hear any suggestion that we should not continue to adhere to those articles. Indeed, the noble Lord the Leader of the House told us rather proudly today that our withdrawal from the Social Chapter of the new treaty did not affect any of the existing provisions of the Treaty of Rome itself. Let us see what those provisions are.
"Measures relating to the free movement of workers and the self-employed under Articles 48–66".
That is there; it is being used and no doubt will continue to be used.
"Under Article 118 the Commission has powers of, co-ordination"—
I commend that to the House, signed on the dotted line by this country and now complained about bitterly by the party opposite—
"in relation to employment policy. It has powers to 'promote close co-operation' between various member states"
in this field.
Under Article 118A the Council has
"legislative powers relating to health and safety. Article 118B (added by the Single European Act) deals with the Commission's role in developing a dialogue between management and labour".
That is not new, and not in the Social Charter itself for the first time, but in the Single European Act, agreed to by this country and signed up by the party opposite.
"Equal pay for equal work. Precise and enforceable rights are granted under Article 119".
They are accepted by the United Kingdom.
"Financial measures under the European Social Fund. The Council's powers to adopt a common policy on vocational training under Article 128".
Article 54 relates to the issue of harmonisation of company law. That also covers issues relating to worker participation. Those already exist. I had thought that the noble and learned Lord, Lord Hailsham, was about to interrupt me.
Lord Hailsham of Saint Marylebone: My Lords, no. Please continue.
Lord Richard: My Lords, let us consider to what extent the Social Charter is a great new innovatory policy—a marvellous wheeze thought up by these terrible bureaucrats in Brussels—which it is necessary for the United Kingdom to resist at all costs.
What is the inspiration behind the Social Charter? As I understand it, there are three basic ideas, each of which I hope that this House would find unexceptionable. First, it was felt that there was a need to add a social dimension to the business dimension of 1992. It has been expressed from time to time as the need for a social consensus. The argument is self explanatory. If one has a social consensus, the chances are that the transition that is bound to take place and the changes that are bound to come will be that much easier if they are introduced by agreement rather than by confrontation.

1411
Secondly, there is the agreement on the need to avoid social dumping. That is the maintenance of lower labour standards in some parts of the Community in order to attract industry. One of the most unattractive arguments put forward by the party opposite today was that somehow or other this country is in a better position if our wage rates are so reduced that we become more attractive for inward investment—in other words, if we participate in precisely the social dumping which the Social Charter is designed to avoid.
Thirdly, there is a general desire for a greater degree of some form of social justice. I accept that the Social Charter is an odd mix. It is certainly a distinct mix. It consists of statements of matters already achieved by or under the EC treaty. It includes provisions already found in other international instruments. It is also a programme of future action. It is drafted in rather general and somewhat vague terms as a statement of principle rather than as a set of legally enforceable rights. It is a political document rather than a legally binding document.
Two basic threads run through the charter. First, it does not entail any extension of Community competence. That has two consequences, does it not? As a principle of interpretation, everything within the charter must fall within the terms of Community competence and implementation procedures must follow the pattern established by the EC treaty. The second principle in the Social Charter has been referred to often today; namely, the principle of subsidiarity. That is a principle which I am perfectly delighted to accept.
Those were the strands of the principles. What does the charter ask for? We have been told that it is so damaging to the British economy and industrial relations that it has to be resisted in the way the Prime Minister resisted it. What does it call for? It refers to freedom of movement for workers. I have no problem with that. It reiterates Article 48 of the treaty. It refers to employment and remuneration. All employment should be fairly remunerated; there should be an assured equitable wage.
I refer now to the Social Chapter. Even that has been watered down considerably. It refers to improvements in living and working conditions and social protection. The aspect that caused the most problem was freedom of association and collective bargaining. Let me read it to your Lordships' House. The Social Chapter refers to the right to resort to collective action. It states:
"In the event of a conflict of interests [it] shall include the right to strike, subject to the obligations arising under national regulations and collective agreements".
A furore arose when that was published. It was alleged that it went to the heart of good industrial relations in this country. Perhaps noble Lords will forgive me if I give one other quotation:
"The contracting parties recognise the right of workers and employers to collective action in cases of conflict of interest including the right to strike subject to obligations that might arise out of collective agreements previously entered into".
That same wording and the same principles were accepted by a Conservative Government in 1961 in the European social charter of the Council of Europe
1412
subsequently ratified by our Parliament. If it is so terrible in 1991, why did not the same principles apply in 1961? Have we moved on? Are we so much more perceptive now? Are the Conservative Government of today more perceptive than the government of 30 years ago? With great respect it does not make sense to resist the principle on that ground.
The charter called for vocational training, equal treatment for men and women, information, consultation and participation; I could go on. It is a modest document. It is a statement of principles and aims rather than a fully legally binding document.
What happened? At Maastricht when the Social Chapter was put before the heads of government, what did the United Kingdom do? Page 137 of the protocol on the social policy in the draft treaty on European union, states:
"The high contracting parties"—
including Britain—
"agree to authorise those eleven Member States to have recourse to Institutions, procedures and mechanisms of the European Community for the purposes of taking among themselves and applying as far as they are concerned the necessary decisions".
What is the effect of that? It is to say that the 11 member states—excluding the United Kingdom—shall have the right to behave in relation to the Community as though that 11 were 12. There can be no clearer indication in our submission that the result is to create a two-tier Europe and to put Britain in the lower tier. It states:
"The United Kingdom shall not take part in the deliberations on and the adoption of Commission proposals relating to fields covered by the above-mentioned Agreement".
I commend to your Lordships one other part of the document. Perhaps noble Lords will be kind enough to look at Annex IV of the treaty. The test of how dangerous the Social Charter or Social Chapter is, and was, is to be found there. The annex gives details of how the 11 propose to implement the Social Charter. If one merely reads that and asks, "How is that so dangerous? What is so terrible about that?" I believe that the answer will be that it is not so terrible. It is a statement of principles and a course of action for the Community which this country should have accepted.
I find Maastricht very sad. Like others in this House, I do not need to establish my credentials in relation to the European Community. However, the idea that in relation to major developments in the Community, Britain should find itself deliberately, of our own decision, on the sidelines looking in again at the way in which the Community is developing is sad. I hoped that I would never see that. For those reasons I cannot accept the Motion.
7.9 p.m.
The Earl of Caithness: My Lords, this has been another high quality debate on this important issue. We have again heard a number of fine speeches, including the wisdom of some noble Lords who have personal experience of the Community and its institutions, and those who have experience in British government. We will, of course, have further opportunities to discuss the detail and the implications

1413
of the treaty agreed at Maastricht later next year when the Government introduce the necessary legislation to allow ratification by the end of 1992.
My noble friend the Lord Privy Seal, in opening this debate, paid deserved tribute to my right honourable friends the Prime Minister, the Foreign Secretary and the Chancellor for the way that they have conducted these difficult negotiations and for the results they have achieved.
From my personal experience I should like to pay tribute to the tremendous work of officials in both the Foreign Office and the Treasury. Those officials have often been criticised in the past. But when it came to seeing the whites of their eyes we proved yet again that we are the best in Europe. I am glad that this praise has been echoed by a number of your Lordships. It is well merited. As my noble friend Lord Marlesford reminded us, in a debate in this House only three weeks ago the Government clearly set out their objectives for the Maastricht Summit. All those objectives have been met. Thus, I say to the noble Lord, Lord Jenkins of Hillhead, that his Motion is a little late. It is a little late to be questioning the Government's negotiating objectives.
The agreement at Maastricht represents a consensus involving all 12 member states. I would say that it is better by some margin than a rupture and most commentators would agree. We played a prominent role at the heart of the negotiations. We shall continue to play such a role in the future, not least during the UK presidency next year.
I am surprised that the noble Lords, Lord Williams of Elvel and Lord Bruce of Donington, did not raise the question of the common agricultural policy during our earlier discussions. That would have been the appropriate time to have done so. I remind the House that discussion on the CAP reforms are in progress. Revised proposals were tabled in July by Commissioner MacSharry. All are agreed that reform of the CAP is needed.
The agreement that we have reached is not only a gain for Britain but it is a major advance for Europe. Once the reforms, policies and new directions that the treaty envisages come into effect in 1993 we shall see that the Community has put itself into a position to face the new challenges of the 1990s resolutely and effectively. The challenge now is to make the reforms that we have agreed effective in practice. That is something to which we are committed. This is especially important given the growing demands to enlarge the Community during the next few years. At British initiative the Maastricht European Council gave further impetus to this process. In its conclusions it recorded that,
"any European state whose systems of government are founded on the principle of democracy may apply to become members of the Union".
It is good to have the support of the noble Lord, Lord Jay, for that.
To make that possible in practice we need a union which has both the flexibility to absorb new members and the stability which attracts them and which provides the basis for continued prosperity and democracy. It is with that end in mind that the Prime
1414
Minister has placed Britain at the heart of Europe, looking with confidence to the future but not losing sight of the problems and practicalities of the present.
The agreement at Maastricht covered both political union and economic and monetary union. Perhaps I may first deal with the financial aspects. The United Kingdom has been one of the leading member states in implementing Stage I. The process was completed by my right honourable friend the Prime Minister when he took sterling into the ERM in October last year. Stage Two of EMU is due to start on 1st January 1994 in accordance with Article 109c of this treaty. It will involve the setting up of a new institution, the European Monetary Institute (EMI) which will seek to increase co-operation between national monetary authorities and will make the necessary technical preparation for the adoption of a single monetary policy and a single currency.
Regrettably the noble Lord, Lord Bonham-Carter, appears to have misunderstood the treaty. I agree with my noble friend Lord Boardman that the noble Lord, Lord Jenkins of Hillhead, has also misunderstood the treaty. Perhaps I may make it abundantly clear. The United Kingdom will participate in the EMI on exactly the same basis as other member states. The Governor of the Bank of England will be a member of its governing council. Why is that important? It is for this very reason: the preparation for Stage Three is to be done in Stage Two by the EMI. There is no question of the UK being exempt from Stage Two and we shall be full members of the EMI. Therefore, the noble Lord, Lord Richard, can rest assured that we shall be involved in preparing the rules for the single currency. We shall be there at the heart of the negotiations; we shall not be excluded.
During Stage Two the ecu will be hardened and there will be increased co-ordination of economic policy with the introduction of a special procedure to discourage excessive budget deficits. The central feature of Stage Two meets an important Government principle—that monetary policy responsibility will remain firmly in national hands.
Stage Three is due to begin in the late 1990s. Member states' entry to it will be subject to strict and quantified convergence conditions; that is another British initiative approved by the noble Lord, Lord Ezra. It is interesting to note that only three countries —that is, France, Denmark and Luxembourg—would be allowed to move Stage Three if these rules were in force now. Belgium would have to halve its outstanding public debt relative to GDP in order to qualify, while Italy would have to cut its annual rate of state borrowing from 10 per cent. of GDP to 3 per cent. In reply to the noble Lord, Lord Barnett, I say that the Government are confident that the UK will be able to meet the convergence criteria and so be able to move to a single currency if Parliament so decides at the time.
It was clear right from the start of the negotiations on EMU a year ago that the Government could not accept the imposition of a single currency; that is, the UK could not agree a treaty which bound it to move to a single monetary policy or a single currency without a separate decision by Government through

1415
Parliament at the appropriate time. There can be no doubt that the treaty meets the Government's requirements on no imposition. The protocol on pages 80 to 82 of the EMU treaty makes it clear that,
"unless the United Kingdom notifies the Council that it intends to move to the third stage, it shall be under no obligation to do so".
If the United Kingdom decides not to opt in to Stage Three it will be then, and only then, that it will be exempt from all the obligations relating to the single monetary policy and single currency.
What is certain is that we cannot predict now what the circumstances of Europe in the late 1990s will be. I am certain that future parliaments will be grateful for this Government's safeguarding of their right to take this critical decision at the appropriate time in the full knowledge of the facts.
I listened with care to the two economists on the Labour Front Benches—the noble Lords, Lord Jay and Lord Desai. I was not surprised to hear two completely contradictory arguments. However, I was surprised—and to judge from what has been said clearly I was not the only Member of this House—to see the extraordinary amendment tabled in the name of the noble Lord, Lord Williams of Elvel. My noble friend Lord Aldington kindly referred to it as "party hype". I should have understood if it had been tabled in the name of the noble Lord, Lord Stoddart of Swindon, because he can vote for it with a clear conscience. Through all the twists and turns of Labour policy on Europe the noble Lord has remained consistent in his dislike for the Community. For that he has the respect of the whole House. However, I must say that not even the speech of the noble Lord, Lord Williams of Elvel, enlightened me about why he had tabled the amendment. He began by giving almost a dozen items on which he agreed with the Government and then struggled to find two with which he disagreed. One was the opt-in clause, which I have just described. The noble Lord does not like the opt-in clause and would therefore sign up for a single currency now. Straightaway he puts himself in direct conflict with his Shadow Chancellor, for Mr. John Smith said it was right not to commit ourselves in advance of 1997 to the single currency. He went on to say that that was something that would be agreed by all sensible people.
I now turn to the part of the treaty concerning political union. Here there is a wider range of issues. The noble Lords, Lord Monson and Lord Stoddart of Swindon, suggested that in spite of the fact that the word "federalism" no longer appears in the treaty on European union the Government have in effect signed up to the concept, or something worse. That is a mistaken view on two counts. First, one need look only at the structure of the treaty. The principle of strong and effective co-operation between the member states acting on an inter-governmental basis is now given firm expression in the treaty of European union. That co-operation will take place outside the Community and outside the trappings of Community confidence, the jurisdiction of the ECJ and the Commission's sole right of initiative. It is none the poorer for that.
1416
Secondly, perhaps we may look at the principle of subsidiarity. This essentially decentralising principle is now reflected in the body of the treaty as we wished it to be. There is a clear justiciable definition in Article 3b of the agreed treaty which draws a clear distinction between areas where Community activity might be justified and those areas where an objective is better pursued by member states acting alone. This will have the effect of keeping the Commission out of the nooks and crannies where the British people rightly feel the Community should have no role.
It was interesting to note that so many noble Lords opposite signed up to the subsidiarity principle and promptly went on to expound the cause of further centralism. Initially I thought that the noble Lord, Lord Clinton-Davis, was singing a different tune to that when he was Commissioner, but he has not changed. After supporting subsidiarity he went on to demand further centralisation, this time in the social field. His speech reminded me of a batsman going in second wicket down when both the openers had failed, taking two steps down the pitch, taking a cow shot at a ball which he missed only to find himself stranded between the wickets, or perhaps more appropriately between the Front and Back Benches.
I must tell the noble Lord that the ball which he missed was that the European Council confirmed that Articles 117 to 122 of the treaty's Social Chapter will remain the basis for essential Community action to protect the health and safety of workers and equal pay. The noble Lord, Lord Houghton of Sowerby, can be sure of that as can the noble Lords, Lord Murray of Epping Forest, Lord Kennet, Lord Ennals and the noble Baroness, Lady Turner of Camden. Therefore, most of their arguments were based upon a misapprehension. For them it is not so much a question of a level playing field but the wrong pitch entirely.
Rather differently from that which the noble Lord, Lord Thomson of Monifieth, implied further action will be possible where necessary under other articles of the existing treaty. That has been the basis of a sensible and affordable social dimension for the Community. The UK expects to participate as fully in the future as it has done in the past.
What has it done in the past? Nineteen of the 33 proposals of the Community's social action programme have been agreed including important measures on health and safety, employment contracts and pregnant workers. The United Kingdom has vetoed nothing and, with Germany, is the only member state to have implemented all 18 measures due for implementation before the social action programme. That is perhaps a better measure of the real commitment to an effective social dimension than the advocacy by some member states of grandiose plans which they cannot implement.
If other member states feel the need to commit themselves to a more far-reaching centralised Community social policy, we shall not stand in their way. The inter-governmental agreements signed by other member states allow them to do that, although it remains to be seen whether they will exercise their right to opt out from the treaty's social affairs

1417
provisions. The Government hope that they will not. If they do, they will sacrifice their ability to determine their employment conditions, their systems of informing and consulting employers, their provision for unemployed people according to the needs of their economic performance, social traditions and experience. They will accept the imposition of Community level collective agreements through Community law irrespective of the choices made by employers and employees in their own countries. As the noble Lord, Lord Harris of High Cross, said, they will pay a heavy price.
The Government were not prepared to put UK jobs and competitiveness at risk by accepting those provisions. It was not surprising to hear so many noble Lords opposite decrying the Government's stance. History tells us why that is so. In 1966 to 1970 we saw a Labour Government in office with responsibility for diminishing power over their actions. From 1974 to 1979 we witnessed a Labour Government with responsibility but without power. That had been ceded to the British trade unions. In 1991 we see a Labour Opposition keen on becoming a government but wanting neither the power nor the responsibility. That will be abdicated to the Commission and the European trade unions.
The Government believe that there is no need for such centralisation and that European industry, which is already saddled with higher labour costs and greater labour market rigidities than its main world competitors, can ill afford it.
The noble Lord, Lord Jenkins of Hillhead, criticised the Government for not agreeing with what others proposed in the Social Charter. The noble Lord takes a diametrically opposite view from that of Mr. Ashdown, the leader of his party. Mr. Ashdown agrees with the Government that it would be wrong to dismantle the achievements of the past 12 years and he believes also that the Social Chapter failed the test of subsidiarity and may well lead to a form of Eurosclerosis. He understands the treaty.
I must draw to the attention of the noble Lords, Lord Rochester and Lord Dean of Beswick, Article 118.1 of the Social Chapter. As a result of that provision only the right whether or not to join a union and the right to strike and impose lock-outs would be excluded from qualified majority voting. Therefore, there is a real risk that our own laws on such issues as collective agreements could be changed, even if we voted against it but the other 11 member states were in agreement with it.
The CBI and other leading British industrialists have supported the Government and their stand, as my noble friend Lord Mottistone reminded us. Prior to the European Council European employers made it clear that centralised decisions on working conditions were not the path for Europe to follow. That path would lead to subsidies and protectionism, which the Government reject. I make it clear that we shall participate fully to construct a sensible social dimension for the Community based on those existing treaty powers which the European Council confirmed.
1418
I turn now to foreign policy. The provisions for a common foreign and security policy in the Maastricht treaty represent a good outcome for Britain. From the start we made clear the need for a stronger common policy which would operate in all our interests, putting the combined weight of the Twelve behind shared objectives. We argued for a stronger commitment to formulate and abide by common positions, as Britain already does. The treaty provides just that. My noble friend Lord Bessborough will be pleased to know of the importance that we attach to the Western European Union.
The noble Baroness, Lady O'Cathain, raised the important matter of citizenship of the union. That is an important new concept which was introduced at Maastricht for the first time. Luxembourg European Council conclusions recognised the importance of establishing union citizenship as a fundamental element in the construction of Europe. The Government agree with that view. Union citizenship will give people a sense of their identity as Europeans but it will not deprive them of their national identities. Union citizenship will complement and not replace British citizenship. Australians and other Commonwealth nationals have the right to vote in all elections here so long as they are resident on the date of registration.
As I have said before in this House, the Government recognise that the European Parliament has an important role to play in Europe's future development. That is why my noble friend Lord Bethell will be pleased with what we agreed at Maastricht both in the legislative and non-legislative fields as regards that parliament.
Defence is another important area. My noble friend Lady Park will be pleased to know that at Maastricht the Government secured an outcome which is good for Britain, good for Europe and good for the Alliance. We have kept the Western European Union and NATO at the heart of our affairs.
The noble Lord, Lord Bruce of Donington, took issue with my noble friend the Lord Privy Seal about the extra provisions in the Maastricht agreement as regards the European Court of Auditors. It is a new requirement for that court to provide the council and the European Parliament with a statement of assurance on the reliability of the Community's accounts and the legality and reliability of the underlying transactions. That is why it was a major step forward and why we have supported the noble Lord, Lord Bruce of Donington, on many occasions in debates in this House.
My noble friend Lady Elles drew an important point to our attention; that is, how open we have been in consulting Parliament on the Maastricht treaty. We are the only country which had a pre-Maastricht debate, a post-Maastricht debate and a post-Maastricht Statement to Parliament. We are one of six countries which had a pre-Maastricht debate in which the president or prime minister took part. We are one of five countries which had a post-Maastricht debate in which the president or prime minister took part and we are one of two countries which had a debate separate from the Statement.

1419
The party opposite has never been strong on consistency. Far be it for me to dwell for too long on their seven different stances on the subject of Community membership. That would be ungenerous. Only three weeks ago it solemnly set out its conditions for supporting a single currency. To no one's great surprise none of those conditions received support at Maastricht and they do not appear in the treaty. Does the party opposite now recant its enthusiasm for a single currency—not a bit of it. The script prepared by its public relations advisers says that the party must be more European than the Government, and so it continues to read the script regardless.
What my right honourable friend the Prime Minister achieved at Maastricht was by any standards remarkable. We are full participants in the discussions which will shape the development of a single currency and yet we alone have not tied the hands of a future parliament. Our influence in the discussions is eloquently demonstrated by the emphasis in the treaty on economic convergence. The United Kingdom will he able to make its decisions about whether or not to join a single currency in full possession of the facts, weighing the economic and political advantages and disadvantages on the basis of fact rather than aspirations. That is a position of real benefit to our nation.
Maastricht represents a significant and important step forward for Europe. It was not the romantic leap desired by some of our partners, but it was none the worse for that. Looked at in the historical perspective, the late of development in European unity is astonishing. But to be durable European union must command the continuing consent and support of the great majority of people in all of its member states. A ruthless rush for integration driven by political elites would ultimately be counter-productive.
At Maastricht Britain played a full and central part in shaping the treaty. The sections dealing with defence, accountability, subsidiarity, crime, the rule of law, the enhancing of the role of national parliaments, and indeed the treaty structure itself, stemmed from British ideas. We now need to build on that achievement. As my noble friends Lord Beloff and Lord Mackay reminded us, we must look forward to the wider horizon.
In 1992 during the Portuguese and British presidencies we must conclude a new GATT agreement and complete the single market programme which is 80 per cent. agreed. I say to the noble Lord, Lord Sherfield, that we are still on target for completion by the end of 1992. We must implement a further tranche of reforms on the common agricultural policy, intensify the dialogue between the Twelve and the United States, Japan and the ASEAN countries, and lay the foundations for the further enlargement of the Community's membership. Above all, we must concentrate on the awesome changes taking place in the eastern half of our continent in what was the Soviet Union and Yugoslavia. We cannot expect a smooth or effortless path to democracy and a market economy. They face perilous and formidable challenges. The Community is the foundation for European stability. It was a British
1420
initiative which led to the signing this week of association agreements between the Community and Poland, Hungary and Czechoslovakia.
We who have enjoyed freedom for the past 45 years have responsibilities to those in our continent who do not. Maastricht will make the Community stronger and, I believe, better able to shoulder the responsibilities which must inevitably fall upon its shoulders. I commend the treaty to the House.
7.42 p.m.
Lord Williams of Elvel: My Lords, it is not for me at this hour of the night or indeed by convention to make any wind-up speech. I only want to make three brief points. The noble Earl should beware of making cricket analogies in front of me because I think I am the one person in this House who was a first class cricketer—I hope noble Lords recognise that—and the noble Earl may find that he is hitting his own wicket or bowling a series of rather short-of-the-length deliveries just on the leg stump, which makes for boring cricket.
The noble Earl said, "When we saw the whites of their eyes". That sums up the debate. The Government seem to think that we are in perpetual confrontation. I thought we were partners in Europe; that was my understanding, but the noble Earl says that we are fighting against the Zulus.
The amendment which surprises the noble Earl is simple. I am not prepared to congratulate the Government on the outcome of Maastricht. I have no quarrel with my right honourable friend Mr. John Smith. We all agree that there must be convergence before we come to a single currency. I have not said anything different and the noble Earl is wrong if he accuses me of that.
Many noble Lords on the opposite Benches are assembled in order to vote in the Division. I should hate to disappoint them. I commend the amendment to the House.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, the original question was that this Motion be agreed to, since when an amendment has been moved by the noble Lord, Lord Williams of Elvel, to leave out all the words after ("House") and insert ("sees no reason to congratulate Her Majesty's Government on the outcome of the Maastricht Summit."). The question is that this amendment be agreed to.
On Question, Whether the said amendment shall be agreed to?
Their Lordships divided: Contents, 86; Not-Contents, 184.

Division No. 2

CONTENTS

Airedale, L.

Listowel, E.

Barnett, L.

Longford, E.

Beaumont of Whitley, L.

Lovell-Davis, L.

Birk, B.

McIntosh of Haringey, L.

Boston of Faversham, L.

Mackie of Benshie, L.

Callaghan of Cardiff, L.

McNair, L.

Carmichael of Kelvingrove, L.

Mallalieu, B.

Carter, L.

Mayhew, L.

Cledwyn of Penrhos, L.

Meston, L.

Clinton-Davis, L.

Milner of Leeds, L.

Cobbold, L.

Monkswell, L.

Cocks of Hartcliffe, L.

Morris of Castle Morris, L.

Dean of Beswick, L.

Ogmore, L.

Desai, L.

Pitt of Hampstead, L.

Donoughue, L.

Prys-Davies, L.

Dormand of Easington, L.

Rea, L.

Ennals. L.

Redesdale, L.

Ezra, L.

Richard, L.

Falkender, B.

Ritchie of Dundee, L.

Falkland, V. [Teller.]

Robson of Kiddington, B.

Fitt, L.

Rochester, L.

Gallacher, L.

Russell, E.

Gladwyn, L.

Seear, B.

Graham of Edmonton, L.

Sefton of Garston, L.

Grey, E.

Serota, B.

Hampton, L.

Shackleton, L.

Hamwee, B.

Stallard, L.

Harris of Greenwich, L.

Taylor of Blackburn, L.

Hatch of Lusby, L.

Taylor of Gryfe, L.

Hilton of Eggardon, B.

Thomson of Monifieth, L.

Hollick, L.

Tordoff, L. [Teller.]

Hollis of Heigham, B.

Turner of Camden, B.

Holme of Cheltenham, L.

Underhill, L.

Houghton of Sowerby, L.

Varley, L.

Howie of Troon, L.

Wedderburn of Charlton, L.

Jeger, B.

Whaddon, L.

Jenkins of Hillhead, L.

Williams of Elvel, L.

Jenkins of Putney, L.

Wilson of Rievaulx, L.

Judd, L.

Winchilsea and Nottingham, E.

Kennet, L.

Winstanley, L.

Kirkhill, L.

NOT-CONTENTS

Abinger, L.

Bruce of Donington, L.

Aldington, L.

Butterfield, L.

Allenby of Megiddo, V.

Butterworth, L.

Ampthill, L.

Caithness, E.

Arran, E.

Caldecote, V.

Ashbourne, L.

Campbell of Alloway, L.

Astor, V.

Carnegy of Lour, B.

Astor of Hever, L.

Carnock, L.

Balfour, E.

Carr of Hadley, L.

Beaverbrook, L.

Cavendish of Furness, L.

Belhaven and Stenton, L.

Charteris of Amisfield, L.

Beloff, L.

Clanwilliam, E.

Belstead, L.

Coleraine, L.

Bessborough, E.

Colnbrook, L.

Bethell, L.

Constantine of Stanmore, L.

Blatch, B.

Cork and Orrery, E.

Blyth, L.

Craigavon, V.

Boardman, L.

Craigmyle, L.

Borthwick. L.

Crickhowell, L.

Brabazon of Tara, L.

Cross, V.

Braybrooke, L.

Cullen of Ashbourne, L.

Bridgeman, V.

Dacre of Glanton, L.

Brougham and Vaux, L.

Davidson, V. [Teller.]

1424

De L'Isle, V.

Newall, L.

Denton of Wakefield, B.

Norrie, L.

Derwent, L.

O'Cathain, B.

Digby, L.

Oppenheim-Barnes, B.

Eccles of Moulton, B.

Orr-Ewing, L.

Eden of Winton, L.

Oxfuird, V.

Ellenborough, L.

Park of Monmouth, B.

Elles, B.

Pearson of Rannoch, L.

Elliott of Morpeth, L.

Pender, L.

Elton, L.

Penrhyn, L.

Faithfull, B.

Peyton of Yeovil, L.

Ferrers, E.

Platt of Writtle, B.

Flather, B.

Plumb, L.

Forte, L.

Plummer of St. Marylebone, L.

Fraser of Carmyllie, L.

Pym, L.

Gainford, L.

Quinton, L.

Gardner of Parkes, B.

Radnor, E.

Geddes, L.

Reay, L.

Gibson-Watt, L.

Rees, L.

Gisborough, L.

Renfrew of Kaimsthorn, L.

Glenarthur, L.

Renton, L.

Goold, L.

Renwick, L.

Gray of Contin, L.

Rippon of Hexham, L.

Hailsham of Saint Marylebone, L.

Romney, E.

Ryder of Warsaw, B.

Harmar-Nicholls, L.

Sainsbury of Preston Candover, L.

Harris of High Cross, L.

Harrowby, E.

St. Davids, V.

Henley, L.

Salisbury, M.

Hesketh, L. [Teller.]

Saltoun of Abernethy, Ly.

Hives, L.

Sandys, L.

Holderness, L.

Seccombe, B.

Hood, V.

Selborne, E.

Hooper, B.

Selkirk, E.

Howe, E.

Selsdon, L.

Huntly, M.

Shannon, E.

Hylton-Foster, B.

Sharples, B.

Inchcape, E.

Sherfield, L.

Jenkin of Roding, L.

Skelmersdale, L.

Johnston of Rockport, L.

Skidelsky of Tilton, L.

Kinloss, Ly.

Soulsby of Swaffham Prior, L.

Kinnoull, E.

Stedman, B.

Knutsford, V.

Stevens of Ludgate, L.

Lane of Horsell, L.

Stodart of Leaston, L.

Lauderdale, E.

Stoddart of Swindon, L.

Lindsey and Abingdon, E.

Strange, B.

Long, V.

Strathclyde, L.

Lucas of Chilworth, L.

Strathcona and Mount Royal, L.

Lyell, L.

McAlpine of West Green, L.

Strathmore and Kinghorne, E.

McColl of Dulwich, L.

Terrington, L.

Mackay of Ardbrecknish, L.

Teviot, L.

Mackay of Clashfern, L.

Thomas of Gwydir, L.

MacLehose of Beoch, L.

Thorneycroft, L.

Macleod of Borve, B.

Torrington, V.

Malmesbury, E.

Trefgarne, L.

Mancroft, L.

Trumpington, B.

Marlesford, L.

Tryon, L.

Masham of Ilton, B.

Ullswater, V.

Merrivale, L.

Vaux of Harrowden, L.

Mersey, V.

Vinson, L.

Milverton, L.

Vivian, L.

Monson, L.

Waddington, L.

Montagu of Beaulieu, L.

Wade of Chorlton, L.

Mottistone, L.

Westbury, L.

Mountevans, L.

Wharton, B.

Mountgarret, V.

Whitelaw, V.

Munster, E.

Wilberforce, L.

Murton of Lindisfarne, L.

Wise, L.

Napier and Ettrick, L.

Wolfson, L.

Nelson, E.

Young, B.

On Question, Motion agreed to.

Resolved in the negative, and amendment disagreed to accordingly.
7.54 p.m.
Lord Jenkins of Hillhead Lord Jenkins of Hillhead rose to move, as an amendment to the above Motion, to leave out all the words after ("House") and insert ("while being prepared to accept the Maastricht agreement as better than a rupture, cannot endorse the Prime Minister's negotiating objectives, and regrets that the agreement failed to place Britain at the heart of Europe.").
The noble Lord said: My Lords, no one believes that the second speech is likely to be more persuasive than the first, particularly at this hour. I therefore beg formally to move the amendment standing in my name.
The Lord Chancellor: My Lords, the original Question was That this Motion be agreed to, since when an amendment has been moved by the noble Lord, Lord Jenkins of Hillhead, to leave out the words after ("House") and insert the words ("while being prepared to accept the Maastricht agreement as better than a rupture, cannot endorse the Prime Minister's

1423
negotiating objectives, and regrets that the agreement failed to place Britain at the heart of Europe".)— (Lord Jenkins of Hillhead.)
7.55 p.m.
On Question, Whether the said amendment shall be agreed to?
Their Lordships divided: Contents, 81; Not- Contents, 185.
8.5 p.m.
The Lord Chancellor: My Lords, the Question is that the original Motion be agreed to?

Local Government Finance Bill
Brought from the Commons; read a first time, and to be printed.
City of Edinburgh District Council Order Confirmation Bill
Read a third time, and passed.
Strathclyde Regional Council Order Confirmation Bill
Read a third time, and passed.

Clackmannan District Council (Vesting of Central Regional Council Land) (Scotland) Order 1991
The Parliamentary Under-Secretary of State, Scottish Office (Lord Strathclyde): My Lords, I beg to move that this order be approved.
Moved, That the order laid before the House on 28th November be approved [5th Report from the Joint Committee].—(Lord Strathclyde.)

Non-Domestic Rating (Appropriate Fraction and Rateable Values) Order 1991
8.7 p.m.
Viscount Astor Viscount Astor rose to move, That the draft order laid before the House on 27th November be approved [5th Report from the Joint Committee].
The noble Viscount said: My Lords, this is a technical draft order under the Local Government Finance Act 1988 which sets the maximum amounts by which the non-domestic rates bills will fall next year for those on transition to lower bills under the new system. The order has to be approved by both Houses. It was agreed in another place yesterday.
The transitional relief scheme is a self-financing arrangement designed to ease the change to the new non-domestic rating system for those who would otherwise face large changes in their rates bills. It operates by limiting the amount by which bills can change from one year to the next in real terms until the ratepayer's full bill is reached. Because it is self-financing it limits reductions in bills as well as increases. The limits on gains come from a calculation driven by the number of properties needing protection from increased bills next year and the amounts of protection they will receive. Separate limits are set for England and Wales next year because non-domestic rate income is paid into two separate national pools before redistribution to all local authorities.
In England the proposed limits are 19 per cent. in real terms for properties with rateable values of £15,000 or more in London or £10,000 elsewhere and 24 per cent. where values are below these thresholds.
1426
They appear as 81 and 76 in the draft order. In Wales the new limits are 9 per cent. in real terms for properties with rateable values of £10,000 or more and 14 per cent. where values are below there thresholds. They are 91 and 86 in the draft order. Taking account of inflation, English ratepayers on downward transition will see maximum cash reductions in their bills of 15.7 per cent. for large properties and 20.9 per cent. for small ones. Welsh ratepayers will get a 5.3 per cent. cash reduction in a large property in transition and a 10.5 per cent. decrease in a small one. These are all bigger cash benefits than ratepayers received this year.
The order also amends the formulae for determining some of the rateable value assessments of the industries with prescribed assessment. These are the so-called formula rated industries, including most of the utilities. For those industries, formulae are used to achieve a transitional path for those who occupy property where there was a big change of rate liability in 1990. The formulae work by adjusting the rateable values of the property until such time as the full bill is reached. Only certain properties in the electricity, telecommunications, railway and water industries are moving to lower bills. That property gets the same maximum reduction as a large property would: in England a 19 per cent. real terms of 15.7 per cent. cash reduction and in Wales a 9 per cent. or 5.3 per cent. cash reduction. I commend the draft order to the House.
Moved, That the draft order laid before the House on 27th November be approved [5th Report from the Joint Committee]. —(Viscount Astor.)
Lord McIntosh of Haringey: My Lords, it is fortunate that it is the convention of this House that we do not oppose such secondary legislation, otherwise I should have been debarred from speaking by the fact that as a non-domestic ratepayer it is the limit in my reduction, as I understand from the noble Viscount, which is being reduced; in other words, I am worse off as a result of the order.
I only want to put on record the fact that this is the last time that the Government will have the opportunity to introduce such an order. We shall of course restore the national non-domestic rate to local government finance.
Viscount Astor: My Lords, I am grateful for the noble Lord's half couched support for the order, if I may so describe it. However, some ratepayers will be better off under the order.

Bingo Bill [H.L.]
8.11 p.m.
Lord Harmar-Nicholls: My Lords, I beg to move that the Bill be now read a second time.
The Private Members' Bill procedure under which this Bill falls is a very valuable part of the legislative process which we go through to arrive at our law. It is well used because it plays an important part in dealing with things for which the Government and normal

1427
business cannot always find the time. It is a way of improving things and removing unpleasant and unnecessary provisions without having to take up formal parliamentary time as one has to with normal Bills which are introduced by the Government as part of their policies.
In my experience in both Houses, a Private Member's Bill may be used in one of two ways. First, it may be used by people who want to grab a topic which is very much in the public eye and want to get their name associated with it but not with any idea of letting it get through all the procedures to become effective legislation. Secondly, it may be used to rectify matters which have been brought into law but have proved to have certain inadequacies or omissions which can be put right. That is the purpose of this Bill.
I remember when the Gaming Act was brought into being in 1968. It was intended to deal with hard gambling. We were allowing casinos to run where hard and big money was the order of the day. We knew from experience in other countries that if the Mafia or similar people got hold of the business it could be dangerous. Therefore when we in this country agreed to legalise casinos we surrounded them with all sorts of proper restrictions in the nation's interest to prevent them being misused.
Unfortunately—it is rather surprising that it was not foreseen—while it was absolutely correct to do that and to be stringent in the restrictions placed on the hard gambling that went on in casinos, for some reason the bingo halls, which are really social centres, were brought into the same package by one of those oversights which are quite understandable when one is dealing with such matters. All or most of the restrictions which were correct when designed to deal with the possible dangers arising with casinos also surrounded the very innocent bingo halls. The situation was best put by the Royal Commission on Gambling, which in 1938 described bingo as a pastime where people, mostly women and often the lonely or elderly, can meet in a neighbourly way to enjoy an agreeable flutter. That is indeed what it is.
Those of us who are familiar with social habits in most parts of the country know that the local bingo hall has proved to be a haven for people who want a friendly night out. They can meet at a place where they are not committed to taking part in heavy gambling and where they can become members provided they have given 24 hours of their intention to do so. Bingo halls cannot advertise generally in newspapers the events which include the "flutter" part of their activities. That situation innocently and inadvertently came under restrictions intended to deal with something much bigger and with much more potential danger than bingo halls could ever cause.
It was seen very early that the restrictions which were inadvertently put around the bingo social clubs were a mistake. The process had gone too far. That fact was generally recognised. I know that that is so because this is my third Bill which, like the others, is intended to remove the unnecessarily restrictive parts of the gambling legislation which are interfering with the proper use and development of the bingo halls. I have no doubt that there will be other Bills which may
1428
be put forward as we learn from experience the need to be a little more helpful in removing such restrictions.
In the 40 years that I have been in one or other of the Houses of Parliament I have moved many Private Members' Bills. The advice that I give—and it is advice that I have taken—is that one should never use the procedure to do any of the big things—the things that are in the public eye. One should use the Private Members' Bill procedure to effect the small changes to rectify legislation. That is the purpose of this Bill.
In addition to the various unnecessary restrictions which have been imposed since we moved the Gambling Bill, this Bill is another step to help the people who organise bingo halls, which I believe are social service centres. If the Bill is passed—I hope that it will be—it will mean that one or two of the restrictions hampering those people will be removed. There are not many restrictions involved; indeed, they do not add up to a great deal. But it is another step in the direction of giving people the freedom that I believe they deserve.
If these organisations are playing a useful and helpful part in society generally, as the Royal Commission seems to indicate, we ought not to overlook the fact that since 1974, when we had 1,600 licensed bingo clubs, the number has fallen to only 980. Moreover, the actual membership is falling rapidly. In the eyes of the Bingo Association of Great Britain, which has looked at the matter with great care, the reason for that is the absence of advertising indicating where such clubs are and what activities are taking place in them. We are not asking that a big step be taken. We are merely asking that one or two extra local newspapers should be allowed to publish advertisements for bingo halls so as to encourage their use.
There may be those who in principle believe that anything that entails any form of gambling, however innocent or small it may be in a bingo hall, should not be allowed. To them I say that on this occasion what we propose is based upon experience. If by any mischance—I do not believe that noble Lords will find that we have been precipitate in introducing these proposals—something should need to be altered, Clause 1(11) provides,
"The Secretary of State may by regulations amend the provisions of this section for the purpose of imposing such additional prohibitions",
and restrictions which may be necessary.
Although I claim with confidence that we are not asking the House to take a great step forward, the Bill gives the Secretary of State power to rectify any marginal mistake that we may make. No further parliamentary time will need to be taken up.
The Bingo Association of Great Britain has not sprung this proposal on us out of the blue. Talks have been going on with the Home Office for three years. The relationship between the Bingo Association of Great Britain and the Home Office is friendly and positive. The Home Office has been firm in that it wants to see the main points of the original Act retained. That is its duty. The friendly relations are a result of the talks. There is hardly anything in the Bill which has not been discussed and virtually agreed by

1429
the Home Office. That point should be borne in mind if there is any reluctance to take this tiny step forward which will allow freedom to what is a desirable social service enjoyed by ordinary, often lonely, people who do not have easy access to other forms of entertainment. We do not want to interfere with them.
The negotiations with the Home Office are continuing. I have learned within the past hour or so that there are one or two points in the Bill about which the Home Office has reservations. If that proves to be the fact—I believe that it will be—I shall be eager and delighted to move the necessary amendments to my Bill to meet those points should the negotiations show that that is the right thing to do.
It is with confidence that I suggest that to give the Bill a Second Reading will be moving in a direction which is generally accepted. It will be a tiny but significant step if we wish to preserve an amenity which has been well received in many parts of the country. It is with the confident hope that we shall do just that that I commend the Bill to your Lordships.
Moved, That the Bill be now read a second time. —(Lord Harmar-Nicholls.)
8.23 p.m.
Lord Butterfield: My Lords, I strongly support and sympathise with the thoughts that lie behind the Bill. There is no doubt that bingo is an important social service and event for many people in middle and later age. I shall remember the word "flutter", because that is what bingo is. It is probably one of the least expensive evening's entertainment that can be found in this country. In the winter it provides warmth and a great deal of social contact and opportunities. Many matters are sorted out at the bingo club.
8.24 p.m.
Lord Morris of Castle Morris: My Lords, I do not speak on this matter for, or on behalf of, the Labour Party, since on all Private Members' Bills we stand neutral. I speak for myself. Time, like an ever-rolling stream, bears all our Bills away. Your Lordships may recall that we have debated the game of bingo, and the necessity for any advertising of it to be most carefully regulated, on previous occasions—most recently on 25th March 1991 in the context of a Bill presented, once again, by the noble Lord, Lord HarmarNicholls.
On that occasion, I felt obliged to remind your Lordships of the not inconsiderable body of evidence which exists of the danger of addiction to bingo clubs and to commend the Government's cautious approach to any attempts to loosen the strictures contained in Section 42 of the Gaming Act 1968. I pointed out then the basic premise which underpins the whole of Section 42 of the Gaming Act—that advertising to stimulate a demand for gambling is in itself undesirable. I pointed out that gambling is widely felt to be an ineluctable fact of life, but is not in itself a moral or social good. In certain cases it is demonstrably disastrous; it has some real dangers; and we should not be patently worse off it it did not exist.
1430
My concern on that occasion was echoed by the noble Lord, Lord Reay, who said:
"One of the basic features of long-standing government policy in this area is that gambling should not be positively encouraged… One of the principal methods of encouraging people to take part in certain activities is by advertising. It follows that advertising controls are at the very heart of gambling policy and any proposals for change need very careful consideration".—[Official Report, 25/3/91; col. 922.]
There seems to be general agreement between us.
I do not now wish to retract anything I said then, but in considering the Bill it may be possible to give weight to two arguments which underline the case made by the Bill's supporters and by the industry itself. First, it is reasonably clear now that bingo is a shrinking industry. The noble Lord, Lord HarmarNicholls, gave the figures. Since the peak in 1974, there has been a consistent and marked decline in the number of clubs. At that time, there were some 1,600 licensed bingo clubs; there are now no more than 980. Admissions to all the clubs has gone down in the same way. The diminution is felt most particularly by the small operators—one must bear those people in mind —the number of whose clubs has almost halved since 1974. The decline seems inexorable. The introduction of the national game through the Gaming (Bingo) Act 1985 was in response to, and sought to address, that decline. However, despite that, the number of clubs continues to fall.
Secondly, it is difficult for anyone—let us be clear —to lose a vast amount of money at the game. Bingo is different from other types of gaming in that a player is not subject to the continuing opportunity to place further bets in cash bingo sessions. One cannot chase one's losses in bingo. The level of participation is also limited by the number of cards or books that anyone is physically capable of handling in one session. Nevertheless, I should point out that I have seen certain ladies at bingo sessions perform feats of prestidigitation which would not have disgraced a first class concert pianist in moving from one card to another with remarkable skill and accuracy.
These constraining facts, taken with the extraordinarily carefully worded restrictions in Clause 1(2), (3A) and (3B), which are bewilderingly close in drafting and which in my suspicion go a long way to meet the reservations which we expressed when we debated the matter last March, lead me to the conclusion that the modest concessions which the Bill seeks are so small, careful and regulated that we might almost say, if we were minded to put it in that way, de minimis non curat lex; the law does not concern itself with trifles.
I cannot believe that the moral fabric of our nation would be rent in twain from top to bottom if we were to give this modest measure a fair and following wind. I hope we shall.
8.31 p.m.
Viscount Astor: My Lords, it may be helpful if I indicate the Government's view of the Bill which my noble friend Lord Harmar-Nicholls has introduced. As he himself indicated, this is the second occasion this year on which he has introduced a Bill to amend the provisions of the Gaming Act in order to allow

1431
licensed bingo clubs to advertise more freely. My noble friend will be pleased to hear that we can now endorse the overall aims of his Bingo Bill which was not the case when we were discussing his Gaming (Bingo) Bill in March.
However, although the Government are prepared, in principle, to accept some relaxation of the controls on bingo club advertising and have agreed outline proposals with the bingo industry, I have to say that we have considerable reservations about how this Bill seeks to put those proposals into effect. We should like to see these reservations addressed, perhaps in Committee, before we can give the Bill our wholehearted support.
Before I come to the drafting I should like to say something about the overall aim of the Bill. As your Lore ships may recall, during the Second Reading debate on the Gaming (Bingo) Bill last March, my noble friend Lord Reay indicated to the House that the Government were not then ready to endorse proposals for relaxing the controls on the advertising of licensed bingo clubs. At that time we were still considering whether there was a case for partial relaxation and, if a case could be made, what form the amendments to the law might take.
We have now completed our consideration of the case for partial relaxation of the advertising controls and reached agreement with the Bingo Association of Great Britain on a package of proposals. Before outlining that package, I should explain why we have concluded that some relaxation is justified.
The controls on the advertising of bingo clubs, and other premises where gambling takes place, are one of the principal manifestations of our long-established policy that demand for gambling should not be stimulated. In the case of gaming, including bingo, Section 42 of the Gaming Act 1968 forbids advertisements informing the public about any premises in Great Britain where gaming takes place or inviting them to take part in such gaming or to apply for information about it. Section 42 is not, however, a catch-all provision. For example, the game of bingo and the level of prizes may be advertised provided the locations of specific licensed clubs are not identified. Such advertising of bingo, as with all betting and gaming advertising is, however, prohibited on commercial television and radio under the broadcasting authorities' advertising codes.
We are satisfied that of the three principal types of premises where commercial gambling is permitted— namely, casinos, bingo clubs and betting offices— bingo clubs are in an altogether different category from the other two. Licensed club bingo is by intrinsic character a lesser form of gambling, both as to the amount the punter may risk and, with the exception of the national game—which has a top prize of £50,000 as to the size of prizes which provide the inducement to risk money. In contrast, there are no statutory or practical limitations on the amount the betting office or casino punter may hazard or gamble. The risks of excessive gambling are therefore considerably greater.
Aside from the nature of the gambling that takes place, licensed bingo clubs are also to be distinguished from casinos and betting offices by their overall
1432
character. Although gaming undoubtedly forms a major part of the activities and purposes of bingo clubs, they also perform a valuable social function. For many people, a weekly or twice-weekly visit to their local bingo club provides an important form of recreation or, as the noble Lord, Lord Butterfield, said, a flutter is also a form of recreation. Because casinos and betting offices provide for "harder" forms of gambling, there are significantly more restrictions on the facilities they may offer and they cannot be said to fulfil the same social function as bingo clubs.
Given the nature and character of bingo clubs, we believe some partial relaxation can now be supported. In coming to this conclusion, we were mindful that in 1978 the Rothschild Royal Commission on Gambling, and more recently the Gaming Board for Great Britain, have been prepared to support a measure of deregulation.
Turning now to the proposals themselves, the bingo industry wanted greater freedom to advertise on local radio and in print. We do not consider that any relaxation of the prohibition on broadcast advertising can be justified. So far as print advertising is concerned, we are content to allow bingo clubs to advertise their locations and the facilities they offer, and to invite applications for membership.
However, to ensure that this concession does not lead to undue emphasis being placed on the gambling rather than the social aspects of bingo clubs, we believe that the freedom to advertise premises should be counterbalanced by tough new restrictions on the advertising of bingo prizes and of inducements which are offered to attract members. The Bingo Association of Great Britain—the industry's trade association— has agreed to such restrictions. In particular, it has agreed that, with one exception, all advertising of prizes away from bingo club premises should be prohibited. The one exception relates to prizes in the national bingo game.
I have given your Lordships a fairly brief summary of what is in fact a complex package of proposals. The package requires some amendments to be made in a complex area of the law. We and the bingo industry are in complete agreement on the principles. Unfortunately, the Government are not entirely satisfied that the Bill, as drafted, actually achieves what has been agreed. We shall be discussing further with the Bingo Association of Great Britain the points on which we believe changes are needed and how these might be formulated.
I am glad that my noble friend Lord HarmarNicholls has agreed this evening that it is important to ensure that the Bill does what we want. I hope it is clear from what I have said that the Government are not unsympathetic to the aims of the Bill; but more work needs to be done on it before I can wish the Bill a successful passage through this House and in another place.
8.37 p.m.
Lord Harmar-Nicholls: My Lords, I thank my noble friend for the sympathetic reception to the Bill. I anticipated that there would be one or two minor

1433
details to sort out, but these are now in the process of being agreed and will be incorporated in the Bill. That is gratifying.
I was particularly pleased with the speech of the noble Lord, Lord Morris of Castle Morris. The last time he spoke on this subject he was a little more stringent than he showed himself tonight. When we return for the next step—and I can see from my noble friend's reaction that there will be yet another step —it could well be that the names of the noble Lord, Lord Morris, and myself will figure together as sponsors. With that in mind, I commend the Bill to the House.
Moved, That the Bill be now read a second time. —(Lord Harmar-Nicholls.)

Specialist Hospital Units
8.39 p.m.
Baroness Masham of Ilton Baroness Masham of Ilton rose to ask Her Majesty's Government what action they propose to take to safeguard specialist hospital units, which provide centres of excellence within the National Health Service.
The noble Baroness said: My Lords, at Christmas time we think of goodwill towards each other. I hope that the Government will have a satisfactory reply to the Question I now bring to your Lordships.
Many countries envy our National Health Service. Some of our centres of excellence provide the only lifeline patients have. Some conditions caused by accidents or illness need exceptional centres. They need specially trained doctors, nurses, therapists and technicians who have come together and, with their common interest and discipline, have found ways of treating conditions which are difficult and often cause insurmountable problems and run into complications if the only choice is that of a general ward in a district general hospital.
These centres of excellence have been built up over the years by dedicated teams of trained hospital personnel. They are not only treatment centres for patients; they are also centres of post-graduate teaching and centres of research and development in respect of health care and the monitoring of new drugs and techniques. It would be a tragedy if the marketing of health care turned into the fragmentation and downgrading of our centres of excellence.
I am most grateful to all noble Lords and noble Baronesses who will speak in the debate tonight. I congratulate the noble Baroness, Lady Hooper, on having visited the spinal unit of Stoke Mandeville Hospital while she was on an official ministerial visit to another part of that hospital. She took the time and trouble to visit the spinal unit. The noble Baroness was shown a horrific pressure sore, the sight of which will no doubt remain with her for ever as a vivid memory. Those terrible pressure sores are common occurrences if paraplegics and tetraplegics who lose
1434
sensation from a point of injury are treated in general hospitals that do not implement a routine turning procedure.
I have seen many people whose lives were saved due to the treatment they received in many different centres of excellence. My life was saved in a specialist unit. Many other Members of your Lordships' House have had similar experiences in centres such as St. Mark's Hospital in City Road. That hospital is world famous for treating the gut. I do not believe that Government Ministers want to see such centres disappear. However, unless some safeguards are established forthwith, Ministers, along with everyone else, may be impotent to do anything about the position.
If the money runs out and districts do not transfer patients, units may have to close down. It would be a tragedy if the only solution remaining to patients, their next of kin or voluntary organisations was to resolve the lack of correct treatment through the courts. If the supra-regional funding is to stop at the end of March, there is not much time left.
The many voluntary support organisations that represent various patient groups know what correct treatments should consist of. Many of those organisations are concerned that the recent Patient's Charter omits any mention of the right to a tertiary referral. That omission was one of the reasons I felt there was an urgent need to bring this matter to the attention of your Lordships.
There are many complicated disabling conditions which need specialist treatment, not only when they reach an acute stage but throughout the lives of the patients concerned. The expectations of the public are growing all the time. I am sure that if the late Lady Lane-Fox had been with us this evening she would have spoken in the debate. Across the river at St. Thomas's Hospital is the Lane-Fox unit. That unit is unique in Great Britain. It cares for people who suffer from high respiratory conditions. It is a lifeline for a small but important group of people. If noble Lords were to visit that unit, they would be amazed at what treatment can be offered by people who know how to offer that treatment.
Eighteen years ago, as I had dealt with some desperate cases of people with spinal injuries who had not been sent to spinal units—most of those patients came from social class 5, medically speaking—I, with colleagues, founded the Spinal Injuries Association. I now have the honour to be the life president of the association.
During the passage of the National Health Service and Community Care Bill I raised on behalf of the association a number of points of concern regarding the Government's proposals on supra-regional specialties. Although we received assurances from the Government that the specialties would be protected, it is now over a year since those assurances were given. In less than four months the new contracting system will begin in full. Our concerns are as great as ever.
In Committee on that Bill the Minister, the noble Lord, Lord Henley, said:
"In short, regional and supra-regional specialty units are likely to be in a stronger position under the proposals in this Bill than they are now".—[Official Report, 24/4/90; col. 520.]

1435
The evidence is that this is not the case and there are fundamental problems with the proposals. The Spinal Injuries Association is in constant and close contact with the spinal injuries units. I wish to highlight our main areas of concern.
I shall deal with the matter of the new contracts. Of fundamental concern to units is the Government's decision to change their status from supra-regional to regional units from April 1992. That will mean a loss of central government funding with serious consequential difficulties for units. It flies in the face of assurances given by the noble Lord, Lord Henley, again in Committee on the National Health Service and Community Care Bill when he said that,
"spinal units and, for that matter, all supra-regional services will be protected by a proportion of the costs being met centrally and the balance regionally".—[Official Report, 3/4/90; col. 1385.]
Although many units take a large proportion of their patients from within their own regions, some take a significant proportion of clients from outside their regions. Stoke Mandeville Hospital, for example, takes 80 per cent. of its patients from outside its region and the Midland Spinal Injuries Unit takes 35 per cent. of its patients from outside its region. Even where the figures are not so high, there are always ex-patients and a handful of new patients requiring the services of the specialist unit who come from outside that unit's region.
There is great concern that any lull in income while contracts are negotiated with the districts will have devastating consequences for some units. The lack of contracts may also prevent future and existing clientele from receiving the specialist care provided by a spinal injuries unit. One unit received official notification of the new arrangements for contracting only last week. Another unit estimates a three year time lag while the districts sort out their simpler, more routine and less expensive contracts.
The Spinal Injuries Association's recommendation to the Government to prevent units from closing under the consequent financial shortfall is that central funding should be provided for at least an interim period of, say, three, years. The continuation of central government support should be reviewed after that period.
There are difficulties in costing treatment for clients. Due to the large variation in the extent of each individual's injury, it is difficult to cost out a standard package for individual patients. Apart from the initial diagnosis of cord damage and neurological sparing, factors such as the previous state of health of the person, the delay in referral, the presence or absence of complications and associated injuries and the provision of support in the community afterwards affect the total cost of providing for each person.
Hospital stays can vary from an initial period of two months to six months or longer. How do the Government envisage such variations being accommodated in the drawing up of contracts? The Spinal Injuries Association recommends that assured central government support is provided to cushion any shortfall.
Units have developed as centres of excellence and offer a policy of "crash to coffin" support that enables
1436
patients to live in the community. It is essential to the future health of a person with a spinal cord injury that he or she is able to return to the specialist unit for regular check-ups. Lack of expert assessment can lead to unnecessary complications. There is considerable anxiety that ex-patients will be required to go for check-ups at their local district hospitals, which lack the necessary expertise but which are cheaper in the short term until complications arise. The result is that complications arise for individual patients, causing a significant shortfall in funds for the spinal unit. One unit estimates that 35 per cent. of its clients and funds are at risk from such a policy.
There is real anxiety in specialist units that districts will not refer new patients to spinal units because of the additional expense. That may well lead to inappropriate and poor treatment, resulting in long-term complications for the patient concerned and an on-going drain on financial resources. It can take months in hospital to repair an avoidable pressure sore.
There is significant evidence that some district health authorities are considering the possibility of establishing their own centres for treating people with spinal cord injuries. It is clear that they will not be able to provide the necessary expertise which is provided by the specialist units. The Spinal Injuries Association would like unreserved assurances from Ministers that new and former patients will have readily available access to specialist units. We are fearful that unless those issues are addressed now there will be insurmountable problems in April 1992, with devastating consequences for units and future and existing patients with spinal cord injuries.
As this subject is not understood fully by many people who have not had first hand experience of spinal cord injuries, I should like to summarise the position. The modern treatment of spinal cord injuries was pioneered at Stoke Mandeville Hospital. The principle of early admission to a specialised spinal injuries centre with comprehensive rehabilitation and lifelong follow-up was adopted by all the spinal injury centres in the United Kingdom and has now been copied in many countries worldwide. The network of dedicated spinal injury centres in the United Kingdom is the most advanced and comprehensive in the world.
Because of the rarity of spinal injuries—one new case per 100,000 of the population per annum—it is not possible to provide functional spinal injury centres on a district or regional basis. It was for that reason that spinal injuries became one of the first supra-regional specialties. The sudden removal of spinal injuries from supra-regional funding poses grave threats to the continuation of the service although in the long term it gives spinal injury centres an opportunity to develop further. The market which has been introduced into the health service is barely capable of coping with routine large specialties. There is a grave danger that spinal injuries, a small specialty necessarily organised on a supra-regional basis, may suffer in the next year or two. It is essential that adequate interim measures are introduced to ensure the continuation not only of the admission, of the newly injured patient to the spinal injury centre but

1437
also the continuation of the essential lifelong follow-up. The spinal injury service is one of the great successes of the National Health Service and should not be sacrificed and lost for the sake of new reforms.
The Spinal Injuries Association wrote to all the spinal injury units before the debate. One unit commented:
"None of our potential purchasers have any knowledge of the proposed de-supraregionalisation of spinal injury units. We have been having regular meetings at a hospital level with the purchasers of our services. I have raised the spinal injury unit issue with each of them. None of them have had prior information and all of them say that they cannot handle this matter at district level".
Another wrote:
"Frankly, the whole matter seems to have been handled with much haste and little planning … postponement of the proposals for de-designating spinal injury units would undoubtedly help to avoid what is likely to be chaos next year".
Another unit said that its greatest concern was that former patients would be unable to return to the unit for specialist treatment. That has already occurred.
I should like to obtain more information and send it to the Minister.
As Christmas draws near it is difficult not to think of the many children who will be in hospital. One has only to look through the directory of Contact a Family to see how many specific conditions and rare syndromes there are with long-term consequences, such as juvenile chronic arthritis. There is nothing so frustrating and worrying for parents as not being able to reach the services of experts who can give their child, who is suffering from a complex condition, the best available treatment. There are many people in all parts of the country raising money and striving to help provide equipment for hospitals so that patients can have the best possible treatment.
Not to have the centres of excellence with their concerted team approach, driven by a special interest in a specific condition, would mean the fragmentation and watering down of treatment. The expertise comes from seeing and treating many cases of a similar condition, knowing what the patient responds to, the benefits of treatment and how to achieve success. The aim of a centre of excellence is to understand how to overcome what seem insurmountable problems. A general ward so often cannot achieve that because the staff lack the specialised training and the dedication to find a cure for, or to alleviate, a specific condition.
It would be a tragedy if we were left with no national or supra-regional units. Not to have the freedom to send patients to the centre where their condition can best be treated and understood will only cause immense problems for everyone concerned in the long run. It cannot be allowed to happen. We should be rightly proud of our centres of excellence in the National Health Service. They are not only of paramount importance to the patient; they are cost effective in the long run for everyone.
8.58 p.m.
Lord Butterfield: My Lords, I congratulate the noble Baroness, Lady Masham, on her strong statement about the need for the maintenance and
1438
continuity of our specialist units. I find it hard to believe that the noble Baroness, Lady Hooper, could possibly have a hard enough heart to jeopardise the future prospects of those important centres. I like to believe that when it comes to her turn to speak she will be able to give us encouragement that there will be some funding so as to ensure that the dreadful prospect that the noble Baroness, Lady Masham, has put before us can be dispelled. It is most important that the people who work in those units are helped by such encouragement as we can give them, particularly at this time.
I do not need to convince the House that some of our most important innovative and pioneering specialist units are concerned with the so-called NHS supra-regional specialties, and not only those that are so designated. Others which used to be supra-regional specialties, such as renal transplantation units, have now been absorbed in the warp and weft of the health service.
I understand that at present about £76 million a year is spent on supra-regional specialties which include chorion carcinoma services, cranio-facial surgical services, heart transplantation, liver transplantation and specialised liver services, neo-natal and infant cardiac surgery, primary bone tumours, psychiatric services for deaf people, spinal injury units, to which the noble Baroness made important reference, retinoblastoma and stereotactic radio surgical units. I have no doubt that the people in those services will need protection and, I suspect, more money. I hope that we shall hear that they will be cosseted.
However, there are diseases that produce disabilities which can be seen out and about and which are also helped by specialist research units. These are the specialist research units for heart disease, strokes, rheumatism and diabetes, about which I shall speak for a short while. Those special units for more widespread diseases are to a considerable extent supported by funds from the medical research charities, of which the most powerful and influential are those concerned with the study, treatment and, we hope, prevention of cancer.
However, there are many charities, ranging from those large ones—for example, the Heart Foundation and the British Diabetic Association, with which I have been associated—right down to quite small charities that have been established by citizens, frequently from their wills. I am conscious of the importance of those small charities because, when I did a survey in Bedford with my colleagues from Guy's Hospital in 1962, the only reason that we could proceed with and fund that survey was that a solicitor in Bedford discovered a charity which had been established by a patient with diabetes who had gone blind and wanted her residual estate to be spent on diabetic research. We were fortunate enough to receive a grant from the charity to help us go ahead.
That survey in 1962 showed that about 2 per cent. of people in this country have diabetes. That is a million people in round numbers. Of those, about 130,000 are paid up members of the British Diabetic Association which each year raises between £6 and £7

1439
million. It has a policy of putting 40 per cent. of that money into social and educational services. It has a strong education service to teach children to inject themselves with insulin and to provide summer camps for them. It has a strong research grant system which distributes funds to specialised units of the kind to which the noble Baroness referred which are scattered over the country, from Belfast, Glasgow, Edinburgh, Newcastle, Manchester, Sheffield and Nottingham, down into the South and London. Those units are almost exclusively located in university settings because that is where one can attract people to take time in a career to become familiar with a disease and to make a research contribution.
I am anxious to take the opportunity created by the noble Baroness to ask the Minister to consider a point about charitable dispensations for medical research in specialised units. So great is the generosity of our people that the medical research charities can spend over £100 million on all the different diseases that are represented, including muscular dystrophy and diabetes.
However, a problem arises in that in future, because of the new arrangements, it is inevitable that the hospitals that carry the specialist units will have to charge overheads. The research councils have a dispensation from the Government to the effect that the Government will carry their overheads. University centres receive £60 million to £80 million a year from the Medical Research Council and, I understand, will have their overheads met from central funds.
Our worry is that the £2.5 million that is spent in the units to which I have referred will be reduced by 20 per cent. due to the need for overheads to be paid under the new arrangements. Let us be quite honest about it: in the past a large amount of research was done on the NHS without anyone noticing it. When I was Professor of Experimental Medicine at Guy's Hospital, I did trials of new medicines and new techniques under the NHS. We did not ask for money because no one did any accounting. We would now ask for funds from pharmaceutical companies, particularly the 40 per cent. overheads from overseas pharmaceutical companies. However, to date the men who work on charitable research units have been able to carry that work forward and hospitals have been pleased to have them in their midst and to support them and find ways and means of losing their expenses. That cannot happen any more.
I should therefore like to ask the Minister whether she will give sympathetic consideration to phasing in the imposition of the overheads to be loaded on the specialist units which do the research that is the lifeblood of the specialist units. If one takes a period of five years it would mean £4 million extra next year, then £8 million and so on, until £20 million was found.
I believe that the charities will be able to absorb that but it would be a nice gesture to the public, to the people working there and to the young people who give up their jobs mid-career to work in the units if they have some expectation of security over the next five years while those changes are coming about. I realise that the noble Baroness cannot give assurances tonight but I am sure that she will give sympathetic
1440
consideration to the matter. It is one of the ways in which the public is able to make sure that they receive the best possible treatment through research in the specialist units to which the noble Baroness, Lady Masham, referred.
9.8 p.m.
Lord Ennals: My Lords, I want first to thank the noble Baroness, Lady Masham, for raising this issue. She can always be relied upon to raise urgent medical issues. We are much indebted to her once again.
I want to support in general terms what she said on behalf of the Spinal Injuries Association with which I am concerned and to which I have a commitment. I also want to echo the disquiet expressed by the noble Lord, Lord Butterfield, and add that I fear that it will not be just the units which are supported by large charities that suffer. I believe that there are a number of cases in which small units are now very much in peril.
Before I go on to specifics, I should like to ask the noble Baroness whether her department would he prepared to look at the situation in which some specialist units now find themselves on the brink of closure. Once a well established unit is forced to close for financial reasons and the team of doctors and researchers involved with it is broken up, it becomes very difficult to get that particular research going again.
I want to mention a particular research project with which I happen, in a sense by accident, to be involved. In the 1960s the B-12 research laboratory was established at the Westminster Children's Hospital. Rapid diagnosis and treatment of B-12 disorders in children were made possible by a new method developed by the laboratory. A dozen serious diseases of B-12 metabolism are now recognised and many young lives have been saved by timely intervention and B-12 treatment. One might ask why single out B-12? Vitamin B-12 is vital for the proper functioning of every cell in the human body. The total amount of B-12 in an adult would probably do no more than cover a pin head. A minute quantity in every human cell is able to control cell functions, the growth and development of nerves, muscles, the brain and every vital organ.
In 1982 that work was in peril. 1982 was a time when university funding was reduced, as the noble Lord, Lord Butterfield, may well recall. I remember visiting the unit in the Westminster hospital and being told by the doctor in charge that unless a charity was established that could raise funds, the unit would simply disappear. I remember saying, "It will disappear over my dead body". Ever since 1982 I have remained alive.
The children's medical charity was established to help save the lives of sick children by the better understanding of disorders such as diabetes (which was referred to by the noble Lord), cot death, malnutrition and leukaemia, which have clear or possible links with Vitamin B-12. The charity has sustained the work for nine years now. It has been able to do so because of generous donors, to whom I am very grateful.

1441
The B-12 unit in Westminster Children's Hospital is the only specialist, diagnostic and research unit in the United Kingdom that can estimate active Vitamin B-12 in tiny new born babies for rapid diagnosis and treatment of those crippling diseases. Over 400 premature babies and sick infants have been referred to the unit in the past decade. The closure of that unit will have grave implications not only for the lives of children now at risk but in the future for many others.
Recent pioneering research in the unit has shown that there may be other diseases of childhood in which Vitamin B-12 may play an important role. There are already positive links between the vitamin and diabetes, cystic fibrosis and cancer. Unless the closure of the unit is averted, further work on those important developments is unlikely and some parents will suffer hardship and needless distress.
I emphasise that this unit is one of only five comparable units in the world. It has world-wide recognition and approval. Three years ago the researchers in the unit organised an important seminar. The work of the unit is now at risk. I have written to the Secretary of State for Social Services, Mr. Waldegrave, to ask whether the department can consider the project because unless funds are raised in the next three months the work will stop. I believe that it is not in the interests of the country or children, let alone the department, that this work should go by the board. I therefore hope the Minister will look into the matter to see what the department can do to help.
I shall continue to do what I can, as will many other noble Lords in this House. The noble Lord, Lord Walton, was president of the charity. The noble Lord, Lord Goodman, has been associated with it. I am very proud of the response. However, there is now a grave danger that the unit may close.
I wish to refer too to the Hilda Lewis House at the Bethlem Royal Hospital which is now threatened with closure from January 1992. It is a money saving operation. The money saved will be used to buy a scanner. If Hilda Lewis House is closed there will be no place at Bethlem Royal Hospital for children with severe learning disabilities. Hilda Lewis House provides an intensive short-term in-patient assessment and intervention service for children with severe learning difficulties and extreme behavioural problems such as extreme aggression to others or injuring themselves so severely that they cause permanent damage. The aim is to help those children to live as normal a life as possible. Interventions are aimed at discouraging dangerous and difficult behaviours while fostering the development of constructive and less harmful behaviours. Treatment needs to be carried out consistently throughout 24 hours. That requires among other things a very high staff ratio.
The unit is well respected. It is a unique national resource offering residential treatment to children up to 16 years of age who have such severe problems that they cannot be helped in the community and whose needs local services cannot meet.
1442
On 6th August 1980 the then Secretary of State, Mr. Kenneth Clarke, acknowledged Hilda Lewis House's international reputation as a centre of excellence. He stated,
"I am confident that Hilda Lewis House will continue to provide the unique service which it offers".
He continued:
"There is absolutely no intention to close the unit".
I suppose that the use of those words means that there was no intention then. But there is an intention now. Despite the assurance given by Mr. Clarke, Hilda Lewis House is to be closed to buy some equipment which the health authority cannot otherwise afford. Such a choice is grossly unsatisfactory.
I hope that the Minister will also consider that project. The great benefit of the noble Baroness, Lady Masham, having moved such a debate is that it enables those of us with specific experience to bring forward projects that are in danger. I know the thoughtful and caring approach of the noble Baroness, Lady Hooper. I hope that she will consider the two units that I have brought to her attention.
9.18 p.m.
Lord Wise: My Lords, the noble Baroness, Lady Masham, described forcefully the work of the special units and their problems, especially in relation to spinal cord injuries. As a layman I have no great knowledge of the work of the units. However, one of my sons leads a special unit and from time to time I have had discussions with him. Perhaps I may tell the noble Lord, Lord Butterfield, that my son worked for a period some time ago at Manchester Royal Infirmary. That was under a university appointment. He conducted much research then into diabetes.
As with all the National Health Service's problems, the main difficulty relating to the safeguarding of the special hospital units is the need for continuing and adequate finance. I believe that the Government may wish to encourage an area of competition between the specialist units. I feel a little unhappy about that. The inevitable consequence would be the closure of some units. That surely cannot be good for patient care. Could that involve a desperately ill patient having to travel many miles for treatment at another specialist unit? Money has to go with the patient. I do not understand what will happen if a district authority has overspent and does not have the money to send with the patient. Could such a situation arise? If so, what will happen to the patient? Who makes the decision? Will he receive inferior treatment, the best that can be provided locally or elsewhere, or will he merely suffer through lack of treatment? Who makes the decision? There is bound to be a conflict of interests and possibly acrimonious arguments between the consultant who is dealing with the case and knows what the patient needs and the administration which is having to try to find the money. The poor patient is just the pig in the middle who is suffering.
I suppose that if the patient has the money to pay there will be no problem; he will receive the treatment that he needs and his suffering will be alleviated. However, if neither he nor the district authority has the money, I presume that he will not receive the treatment. Surely that must not be allowed.

1443
District health authorities can be short of money for all manner of reasons. They may even be badly managed, who knows? However, the number of our truly excellent special units must not fall. They are in jeopardy if there are insufficient funds to send patients to them. How will the Government ensure that district managers have enough funds to refer patients to special units whenever that is needed? If the patients do not get to them, the units must fold as a result of lack of cash.
9.22 p.m.
Lord Rea: My Lords, I too thank the noble Baroness, Lady Masham, for raising this important issue. I also congratulate her on her moving and extremely well-informed speech. The internal market involving the separation of purchaser and provider, which is the central change brought about by the National Health Service and Community Care Act 1990, was based on an idea put forward by Professor Alan Enthoven, the economist of Stanford University. His monograph was based on a study that he carried out on the National Health Service. It was not meant to be incorporated into legislation, as it has been, in one tranche and applied throughout the National Health Service. Indeed, he has since expressed in an interview and to relatives, friends and colleagues his embarrassment that his ideas were not introduced gradually in stages in different areas and at different levels with evaluation at each stage. He, among many others, has pointed out that the market in health care has sometimes had disastrous effects in the United States.
We must accept that the internal market is now here, al least for a while, and we must make the best of it. The principle of having a purchasing authority assessing and buying health care for the needs of its population is to me theoretically attractive. If it can be shown to work it is likely that it is here to stay. However, I say that advisedly because we have yet to see the internal market working in its full force. Until now it has been a cushioned operation of the system.
The type of units to which the noble Baroness's Question refers cater for the needs of a small and rather fluctuating proportion of the population of any single health district. It is very difficult to predict on a district or even regional level how many spinal injuries, rare bone tumours, or cases which need special psychiatric units because of deafness there are likely to be in any one year. Thus, referrals to specialist units at regional or supra-regional level will in most cases be extra-contractual—ECRs. Other noble Lords have pointed out that those ECRs are the bêtes noires of district purchasing managers, the more so because of the difficulty in specialist cases of costing each admission or referral since each case may be different in complexity and length of stay required.
I hope that the noble Baroness will be able to explain whether and how regional reserve funds will be created and operated to help or bail out district health authorities which have overspent and which cannot afford as many extra-contractual referrals as they would like. Are those funds to be set up and how will they be administered? Is it known how large will
1444
be the funds at their disposal and whether the funds will be subtracted from the sums allocated to districts, or will they be earmarked for legitimate overspends on ECRs hours when the regions are funded centrally? The specialist hospital units, as many noble Lords have pointed out, need more secure funds than they can expect from fluctuating extra-contractual referrals.
As the noble Baroness pointed out extremely clearly, anyone who has been a patient in a specialist hospital unit or has had a relative treated there, or who, like myself, has treated patients who have received care in such a unit, will be very much aware of the extremely high level of expertise which has been built up in those units over many years. As my noble friend Lord Ennals and the noble Lord, Lord Butterfield, pointed out, those centres of excellence use their unique experience to train teams of doctors, nurses and therapists. That training cannot be obtained elsewhere; nor can the research which is often conducted on very rare conditions, as has been explained in some detail by those noble Lords, be carried out so well elsewhere. The staff trained at those units can spread their expertise when they take up jobs in other units, quite apart from forming part of a team in the units themselves. For example, they can help to teach others to avoid the kind of unpleasant experience, which the noble Baroness described, of the badly neglected pressure sore. There are many other examples of different conditions which can go wrong if not given special care.
We are all anxious to hear from the noble Baroness how the Government intend to safeguard these unique units from the vagaries of the market system. Can she assure the House that the units will be able to rely on earmarked secure funding for at least the next two or three years until we see how the internal market settles down?
The Patient's Charter does not include the words "patient choice". That is rather strange when the National Health Service and Community Care Bill was preceded by a White Paper called Working for Patients. The units which we are discussing are the enthusiastic choice of those who use them. The system at present does not assure those units of a secure future. I hope that the noble Baroness can provide them with that assurance.
9.30 p.m.
Baroness Gardner of Parkes: My Lords, I am grateful to the noble Baroness, Lady Masham, for introducing this topic to the House tonight. I have always supported supra-regional hospitals from the time when I was on the board of the Brompton National Heart Hospital. This House listened to the problems that existed then and did much to help solve them. Now, like all other postgraduate hospitals, it will again face problems of funding. However, again like other special health authorities, it is standing back waiting to see what happens. Therefore tonight I do not intend to speak about that hospital but about the Royal National Ear, Nose and Throat Hospital, which is in a slightly different position.

1445
I must declare an indirect interest in that my husband is the chairman of the hospital, which was one of the first wave national health hospital trusts. It is interesting that it is mainly postgraduate. However, it does not come in as a special health authority in the same way as the others—the Royal Marsden, the Brompton and the Hammersmith. There are so many that are special health authorities. A general practitioner said to me the other day that one is allowed to send patients to any of those special health authorities and the cost does not come out of the district health authority's allocation.
Unfortunately, the Royal National Ear, Nose and Throat Hospital does not have the benefit of being in that position. The cost of sending a patient there comes out of the district allocation and therefore it has to be in a competitive position in regard to funds. It is doing quite well in that it has run efficiently for almost its first full year. It lived within its means, it improved the waiting time on the waiting lists, it is continuing a high level of valuable research and it has introduced a master's degree in audiological science which the first students will take in 1992. There is already a master's degree in audiological medicine.
The difficulty arises from the fact that all the money given for undergraduate teaching is separate from the money given for postgraduate teaching. There is a lack of funds for postgraduate teaching. This year, it being its first year as a national health hospital trust, it was perceived that it would have special difficulties and it was given an unnaturally high amount of undergraduate teaching money. That provided £1 million, plus the £.3 million postgraduate funds. On that £1.3 million it managed well.
I was particularly interested in the speech of the noble Lord, Lord Rea, when he explained that the proposer of those ideas believed that they should be introduced gradually. We are seeing many things introduced gradually in this new restructured National Health Service. But it certainly must be a gradual process. It is only as it goes along that little difficulties appear which previously no one realised existed. They make themselves apparent and suddenly one realises that something must be done about them. The Government assured us that they will allow the changes in the health service to evolve. They are not planning to destroy the system. I believe that the changes are working well. But that is one of the difficulties that has become apparent.
The audiology department is unique in the country. There is also an excellent standard of ear, nose and throat treatment. One may receive ear, nose and throat treatment in other areas, but the audiology department is unique. The hospital includes the Institute of Laryngology (throats) and Otology (ears). I point that out because there is nothing worse than reading all those names in Hansard and thinking, "What on earth was that all about?" It has the National Chair in audiological medicine and also a Chair in audiological science. It is therefore of importance to people with hearing difficulties.
Some Members of this House—I feel I am rapidly becoming one of them—are aware that time produces
1446
hearing difficulties for many of us. Perhaps nowhere could we be speaking about a subject more dear to our hearts.
I appeal to the Minister to put to the Secretary of State and the department that the same formula for funding for postgraduate hospitals should be introduced in the same way as in the undergraduate hospitals. There should not be the great difference that exists now.
While thought is being given as to how that can be done and how to recognise the special needs of postgraduate teaching —because that must be recognised—can the Minister assure us that the status quo will be maintained and that at least we shall not see any reduction in funding to these hospitals which are conducting postgraduate teaching but which are not in the position of special health authorities? Because they are not in that category they are more visible than the other postgraduate hospitals which are waiting and watching to see what happens. Will the Minister assure me that she will look carefully into the position as regards postgraduate teaching? It is vitally important.
I strongly support all the supra-regional and highly specialised hospitals. We all wish to see our centres of excellence continued. We hope to see good hospitals doing routine work everywhere so that people can have treatment close to home. It would never be in the national interest to have highly specialised units everywhere because one would not have enough cases requiring that kind of work. Therefore, there would never be the degree of expertise that exists when the units are retained as supra-regional centres of excellence.
9.37 p.m.
Lord McColl of Dulwich: My Lords, I too would like to thank the noble Baroness, Lady Masham, for raising this issue and also apologise for not putting my name on the list of speakers. I believe that what we are talking about tonight is the problem of bringing in any kind of change. Changing anything in this country is an uphill task: changing anything in the National Health Service is even more of an uphill task. All changes inevitably bring problems. Changes have to be modified, as has already been said, when unforeseen difficulties arise.
The Government have taken a great deal of trouble to try to ensure a smooth take-off of these reforms. Perhaps noble Lords remember the dire warnings that were given in this House a year or so ago as to how the NHS would collapse on 1st April 1991. It is interesting to note how smooth the take-off has been. It is perfectly natural for hospitals like Stoke Mandeville with its spinal injuries unit to be worried about what is going to happen in April of next year. The patients are taken from about six or seven different regions. The hospital could have £4 million to £5 million to collect in extra-contractual referrals. In the first year that could lead to instability.
It has been proposed—it is perfectly reasonable and within the bounds of possibility—that a unit like Stoke Mandeville could negotiate with the four Thames regions in the way that it has already

1447
negotiated with the Oxford region and have a contract with them. If that were done with those five regions it would ensure between 75 per cent. and 80 per cent. of its income. That would seem to be a reasonable proposition, certainly in the first year.
The noble Baroness, Lady Masham, said that she was worried that the district health authorities would not refer the needy, paralysed patients to the proper place in order to save money. If a hospital within a district health authority were to do that it certainly would not save any money; it would increase the total expenditure. An average district health authority will see only five new paralysed people a year. There is no way that a hospital will set up a unit to treat just five patients, so that is very unlikely to occur.
The spinal injuries unit takes patients from British dependencies such as the Falklands Island and Gibraltar, and no doubt some system will be put in place to make sure that money follows patients there. The unit also takes quite a number of patients from Her Majesty's Armed Forces. Clearly, that factor too will have to be catered for. The Stoke Mandeville unit is one of the front windows of the National Health Service on the world scene. It has done marvellous work in the past and I know that the Government are anxious that that work should continue undiminished.
9.40 p.m.
Baroness Robson of Kiddington: My Lords, I join other noble Lords in thanking the noble Baroness, Lady Masham, for raising this subject tonight. We have: heard some excellent speeches, in which concern has been expressed about the future of specialist units. I am delighted that we are able to discuss this subject coolly and calmly and that there is no political angle attached to it. We are all taking part in the debate because we feel desperately concerned.
The noble Baroness, Lady Masham, referred to problems that will in a way increase from now on. When the contract system, if one can call it that, between purchaser and provider was introduced last April it was based completely on historical facts. There was no proper costing in the sense that there will be from 1st April 1992. The specialist units will be faced with a proper contractual programme and their status will be changed from supra-regional units to regional units. Both those developments worry them deeply. They are worried, as the noble Baroness said, that the districts and regions will deal first with the simpler, general, standard services. The districts and regions have problems to face too. It will not be easy for them to get the contracting system working properly on the right economic basis. The specialist units are therefore feeling threatened. As the noble Baroness said, they would like central funding to remain at least while this transitional period is going on.
The noble Lord, Lord McColl, said that the Stoke Mandeville Hospital, having made a contract with the Oxford region, could make a contract with the other regions and that its income would therefore be safeguarded. I find it difficult to see how a specialist unit can make a meaningful contract when its patients may be there for a week, a month or two months, or
1448
may even be there for between six and 12 months. Under those conditions, entering into a contract with a district health authority is a complicated process. The specialist units will have to rely largely on extra-contractual arrangements. That must put them in a most frightening situation at present, as they do not know what their income will be and how they will plan their services for the next one, two or five years. That feeling of instability is what worries all of us, together with the danger that it presents in itself that some of the units may go to the wall.
The noble Baroness, Lady Masham, referred to the unit at St. Thomas' Hospital which deals with high respiratory conditions, and to our late friend, Lady Lane Fox. I knew her from 1952; indeed, I knew her for most of her life. I know how delighted she was when that unit finally got off the ground and how important it was to her. Her visits on a regular basis to it enabled her to function in this House and to live a normal life.
Many people use the Lane Fox Unit. I talked to Dr. Spencer, who runs it. He told me that the number of referrals has not gone down, because he accepts patients regardless of whether there is a guarantee of payment. He said that about 97 per cent. of his patients are extra contractual and, so far, 30 per cent. of them are not paid for. That is the situation this year but it will be even more difficult next year when the financial constraints will become meaningful.
I am sure that all of us would hate to see that unit, which is unique and which serves so many people all around the country, run into difficulties. It not only helps people in the unit itself; it also provides technicians who visit people's homes to ensure that the breathing machinery which they have there and which prevents them from taking up a hospital bed—for example, artificial lungs—is kept in good order. It is a most valuable unit which should, in my opinion, be safeguarded especially carefully. I know that Dr. Spencer is most concerned about its future.
The other point raised by the noble Baroness, Lady Gardner of Parkes, was that postgraduate education was of the greatest importance. If specialist treatment is to be provided, it is dependent upon appropriately trained staff. Among the most important members of the staff in such units are the nurses. Tragically, we know what happened when there were not enough specialist, trained nurses when we had the problem with the Birmingham babies in 1987. The planning as regards the number of special paediatric care nurses who were needed went wrong.
As the Minister knows, because we discussed the matter when we debated the Nurses, Midwives and Health Visitors Bill, we are still concerned about ring fencing for postgraduate training. It is important that adequate investment is made in post-registration education. Therefore, it is important that the Government should, so long as it is possible and especially as regards postgraduate education, ring fence that sum of money.
I sincerely hope that, as a result of this debate we shall receive some guarantees about the future of all the specialist units. There are many of them—not just the spinal injury or respiratory units—around the

1449
country. They contribute enormously to the well-being of people who are much less fortunate than we are. I should like their future guaranteed.
9.50 p.m.
Lord Desai: My Lords, first let me join all other noble Lords in thanking the noble Baroness, Lady Masham of Ilton, for having brought this Question to our notice. She speaks on the subject with knowledge and passion. I welcome the opportunity to speak on the subject. Let me also join the noble Baroness, Lady Robson of Kiddington, who said that this is not a party matter; it is a matter in which we all wish to do the best that we can. My contribution will be made in that spirit.
Many noble Lords have spoken with great knowledge—a knowledge which I lack—as doctors or users of the services. Let me start by emphasising certain points about which we all agree. There are many specialist units, not just the spinal injuries unit which was mentioned by the noble Baroness, Lady Masham. They are unique. They make a great contribution which is appreciated. We all agree that we should save as many of them as possible. We are also agreed that we are currently going through a period of reform. As the noble Lord, Lord McColl, pointed out, there are always difficulties in implementing reforms. We should learn from experience what to do.
I am sure that no one, including the Government, wants the organisational problems involved in getting money from here to there to stand in the way of good treatment being meted out to patients. If there are any institutional problems to be smoothed out we should try to do so. In that respect I note the remarks of my noble friend Lord Rea, who pointed out the principles involved in the new NHS reforms relating to purchasers and providers.
Economics is a subject about which I know something. As so often happens, the bulk of the services provided by the NHS can be taken care of by the purchaser/provider arrangement. To give an analogy, that is like off-the-shelf buying. We know about the cases which are not routine. We know roughly what they cost and what the length of treatment is likely to be. One can estimate the costs of such treatments within a certain range. The specialist units—as we have heard there are many of them—operate what I shall call made-to-order or Cinderella technology. Something has to be fitted separately to each patient. Patients, as has been said, may need different kinds of treatments and different lengths of stay. Those specialist units cater for treatments which are hard to cost routinely. The market for them cannot be the same as the market for what I call standard routine illnesses.
Another problem is that because the institutions are unique their markets are national. Their catchment area is national rather than district. Any financing arrangement that looks at the district only cannot cater for institutions that have a national market. Without wanting to criticise what has been going on, I urge the Government to consider whether a
1450
distinction can be made in the structural reforms between matters that can be taken care of at district level through the purchase/provider arrangement and matters which need a wider geographical coverage and a different kind of financing. As we have noticed this evening, district budgets or GPs' budgets are overstrained by the one-off, odd or difficult to estimate large expenditure. The difficulty is one of transition in reforms. The bulk of problems can be taken care of in the purchaser/provider arrangements, but these units have a different kind of problem.
In the light of these observations, I should like to ask the noble Baroness, Lady Hooper, whether there is any prospect of interim funding for, say, three years while we iron out the problems which arise both in the implementation of the new reforms and in the specialist units. That is one kind of problem. There are obviously individual cases of specialist units, as has been pointed out by other noble Lords. They should be examined in detail.
A further problem is that the specialist units produce not only health care and health cure but also research and training. Those are vital ingredients for future health care and health cure. I know from the university sector that there are problems in financing postgraduate training and research in any case. They seem to be heightened by the fact that the National Health Service is going through these reforms. Teaching in that sector has problems of financing education and health.
It may be that the postgraduate education provided by the specialist units needs some other kind of special treatment, some other kind of arrangement. Without in any sense disrupting the flow of change, it will enable the units to preserve their essential contribution. I know from my experience that good research units are hard to build up; they are easily destroyed and hard to rebuild. It takes many years to build up good research teams and they are important.
I do not wish to delay the House any longer except to say that I am sure there is much good will on all sides. We desire the preservation and enhancement of the specialist unit, ironing out the problems of transition. Let us hope that the comments expressed by noble Lords are taken on board by the Minister.
9.57 p.m.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Hooper): My Lords, there can be no doubt about the importance and value of the services which specialist units and centres of excellence provide. We have heard of some excellent examples of developing these services from the noble Baroness, Lady Masham, and the noble Lord, Lord Butterfield, who spoke of the diabetic units and the work of the Lane-Fox Unit. The noble Lord, Lord Ennals, mentioned the B-12 Unit.
I wish to emphasise that I believe that there can be no doubt about the Government's recognition of the vital role that the units play in providing for the overall well-being and health of the nation. It may be in service terms, providing specialist care to a wide catchment population; in research terms, as centres in pushing back the frontiers of medical advancement

1451
and achievement; or in educational terms in developing and training the future generation of clinical specialists both at undergraduate and at postgraduate levels.
I realise that uncertainty can be created by change. As my noble friend Lord McColl said, people do not always welcome change. However, I would, not wish anyone to think that the effect of the reforms will be negative for these special units. On the contrary, the principles of the reforms have put in place the foundation which will enable such units to thrive. It may therefore be appropriate if I begin by referring to the reforms and then explain how the specialist services fit into them.
With the implementation of the reforms, district health authorities are now responsible for assessing the health needs of their residents and for securing access to a comprehensive range of services which aim to meet those needs. They are therefore becoming more aware and better informed about the health needs of their residents and they are in a better position to make judgments about what services are required and where to purchase them to meet the needs and wishes of their residents.
The noble Baroness, Lady Robson, referred to the system of contracting. The separation of the role of the DHA from hospitals and units providing services has given hospitals and units greater control over their own affairs. It has enabled them to manage themselves and organise their services in ways which are more responsive to patients' needs. The contracts provide the mechanism for securing and ensuring the delivery of a high quality, consumer-responsive health service. Hospitals will increasingly get paid for the number of patients they treat rather than, as in the past, being funded to provide access to facilities irrespective of usage. The principles which the reforms have put in place tackle the efficiency trap and units providing high quality services—such as the units we have heard about this evening—can only stand to gain.
Within this overall framework created by the reforms, we have been particularly concerned to ensure that proper funding arrangements are made for specialist services. Those arrangements will need to be flexible enough to reflect the diversity of services provided, and indeed who they are provided for. The breadth of the examples referred to this evening underline that need for flexibility.
Of course we have never pretended that all services could be contracted for on a local DHA basis. Because of their catchment population, or because of research or teaching aspects, there will be specialist services which need to be funded on a regional or national basis. Indeed, the White Paper Working for Patients underlined the importance we attach to the continued existence of specialist services and our commitment to secure an environment which will enable them to prosper in line with their popularity and the need for them.
The framework under which the majority of specialist services are currently delivered therefore reflects their particular characteristics. Special Health Authorities continue to be centrally funded by the department. There are also services which are only
1452
available in a small number of units throughout the country. These supra-regional services are also funded centrally. There are too services where it is sensible to continue funding on a regional basis and those where DHAs have a role to play in representing the interests of their residents more closely.
There is no centrally dictated straitjacket that the Government are imposing. However, the department's management executive, together with the regions concerned, is keeping these issues under review as part of its ongoing review process. Our policy in implementing the reforms has always been one of managing change in a planned and sensible way. The continued provision of specialist services is no exception to this policy.
The London Postgraduate Special Health Authorities—eight in all—are just one example of the way in which we have sought to provide a sound base for centres of excellence to function. These national centres of clinical excellence provide the foci for research and development, medical education and training, and non-medical education and training within their fields. We have recently reconfirmed our commitment to the special health authorities as national centres for research and development and we intend to maintain central funding and management for the next two years.
The noble Baroness, Lady Masham, raised a number of anxieties concerning the supra-regional services and those anxieties were echoed by other speakers. The department's funding of supra-regional services is another example of the importance we attach to the provision of specialist services. In the current financial year we have provided central funding worth £100 million. I can therefore correct the somewhat lower figure quoted by the noble Lord, Lord Butterfield. In those cases the department is acting directly to secure care through contracts and all residents are able to benefit from the services. The contracts cover the provision of high profile services such as heart and liver transplants together with less well known but equally pioneering services such as cancer services for eye and bone tumours.
Where services develop to the stage where they are largely provided on a regional basis—spinal injury services are an example—it is only equitable that designation as a supra-regional service ceases and that health authorities contract for their provision in the same way as for other mainstream health services. De-designation has been planned and prepared for. It is clearly important that the transition from supra-regional service status is handled in a managed manner.
Funding will no longer be from the centre but will be distributed to regions to secure services for their residents. However, regions will be expected to use that funding in 1992–93 on a "smooth take off, no surprises" basis. We would not expect any major changes. Therefore, contracts will be entered into on a historic basis but there will be scope for amending and improving them as time goes on.
In coming to its decision to recommend de-designation of spinal injury services the supra-regional services advisory group noted that in most cases the

1453
services are provided largely to patients from the host region. The group believes that it would be in the best interests of units and their patients for the service to be organised on a regional rather than a supra-regional basis. Districts and regions have adopted a number of approaches to ensure that similar valuable services continue to prosper.
The noble Baroness, Lady Masham, raised a question about assurances given by my noble friend Lord Henley during the passage of the National Health Service and Community Care Bill. He gave an assurance that spinal units would continue to be funded in part by central government. It was later decided that supra-regional services would not be part funded but would be 100 per cent, funded by the centre. That was a change for the better.
It has always been the case that supra-regional services are de-designated when the case for designation has passed. One example which was welcomed concerned the end stage renal failure services for children in 1988. Spinal units are now in that firmly established position in which designation could not and need not continue.
Another point raised by the noble Baroness concerned the difficulties in relation to the continuation of contracts because costs are so variable. A contract already exists between the Department of Health and the spinal injuries units. For next year, the money will pass to regions to make appropriate funding arrangements for the services. The approach to contracting will be evolutionary as better information on costs and quality becomes available. Therefore regions are well aware of the importance of ensuring a smooth transition.
Baroness Masham of Ilton: My Lords, perhaps I may ask a question. What happens if there is a large train crash in one region and 10 people break their necks and have to stay in hospital for a year? Is money transferred from a region which may have no patients to that region with 10 new patients? The matter is complicated because you cannot tell what will happen.
Baroness Hooper: My Lords, it is complicated, but there are special arrangements for major emergencies of that kind. I believe that sufficient flexibility is built into the system to enable such a case to be well covered.
The noble Baroness and the noble Lord, Lord Desai, both asked for a delay in implementing those changes. I believe that the noble Lord suggested a three-year delay. In February of this year the Secretary of State announced that spinal units would transfer to the regions next April. All health authorities were informed at the time, so there have been many months to plan for the smooth transition and regional health authorities are leading discussions with units in a number of cases. Obviously, the Department of Health's management executive is following the matter keenly and it all appears to be proceeding satisfactorily. We have issued guidance on contracting and specialist guidance on this particular area of contracting.
1454
The supra-regional funding has allowed spinal units to develop firm foundations of quality, expertise and, above all, the universal reputation for their services—underlined by the noble Lord, Lord Rea. All are safeguarded. Any new unit trying to start a service would need to be confident of at least matching the existing standards.
The Stoke Mandeville spinal injuries unit is a shining example. I am glad that the noble Baroness, Lady Masham, gave us the background to the unit. I thank her for ensuring that on my visit I was able to see all that I should see, both to appreciate the needs of the patients and the scope of the services there. The Oxford region is well appraised of the importance of the issue and is working with other regions. I understand that, historically, four regions in particular have used the services of the Stoke Mandeville unit and they are working together to agree on appropriate funding arrangements.
As I said, the management executive is also in close touch with regions on this issue, but I do not believe that there is anything to be gained by exaggerating any anxieties that might exist about a system that we have every reason to believe will be in place and working smoothly from April next year. There is no reason to suggest or believe that patients will not have as good or better access to those specialist services.
Contracting on a national basis is not sensible for services which are provided in a number of units around the country. Those who are closest to patients are inevitably more informed about their needs and more able to reflect the variations in demand in their contracting arrangements. Regions and districts have, therefore, developed their own approaches to contracting for specialist services which reflect their local needs. We expect developments to continue in that evolutionary way.
Some regions continue to fund regional specialties through regional contracts. Others have taken a more developmental approach whereby funding comes from both the region and those districts whose residents are using the service. That allows districts a greater say in ensuring that the needs of their residents are reflected in the agreement with the unit, while providing that unit with a greater degree of security as to its funding.
There are a number of examples of ways in which the regions and districts are using the contracting process to achieve improvements in the care available to their residents. I quote an example in which one region—the West Midlands—has taken a two-fold approach to contracting for specialist services. Some of those services are being funded through regional contracts while others are being funded through what they call a subscription service. That is where each district pays a proportion of the cost of providing the service to the district in which the unit is located. That district acts as manager on behalf of all the purchasers. It negotiates and agrees the terms of contract and monitors the service being delivered. That means that the unit has a guaranteed income and clear quality standards to aim for. For purchasers it provides an effective way to fund often unpredictable and high cost referrals.

1455
The noble Lord, Lord Rea, was concerned that contracting for specialist units does not work because of the small number of patients from each district. I welcome the noble Lord's support for the idea of districts and regions securing health services on behalf of their residents. But we have always made it clear that they cannot contract for all services at district level, especially the specialist services where there are just a few referrals from each district. That is why we have the supra-regional services in place and have provided the £100 million funding to which I have referred. We have made clear the responsibility on regions to ensure that residents have access to all appropriate specialist services.
My noble friend Lord Wise was concerned about the money question and we have to recognise that demand for health care will always exceed the money available. In acting on behalf of their residents to secure access to a comprehensive range of services, districts have to make decisions on priorities. But I hope that in the course of this evening I have given him sufficient evidence of our appreciation and keenness to ensure that the appropriate range of specialist services continues.
The noble Lord, Lord Butterfield, asked a particular question about research. I reaffirm the Government's commitment to the importance of research and the need to ensure that units facing extra costs as a result of collaborating with the medical charities' research programmes are not disadvantaged by doing so. It is an important issue and perhaps I could write to the noble Lord in a little more detail.
I have also noted the point made by my noble friend Lady Gardner of Parkes about the Royal National Ear, Nose and Throat Hospital. I am not aware of any problem about funding in respect of that unit but I shall look into the matter and come back to her.
With regard to Hilda Lewis House, which was an example raised by the noble Lord, Lord Ennals, of a centre of excellence in postgraduate research and teaching which caters mainly for mentally handicapped children, the special health authority, the
1456
Bethlem Royal and Maudsley Special Health Authority is considering the future of the unit and must ensure that its decision reflects both its overall strategic direction and other opportunities for priorities for research and service. But the future of the unit is being given very serious consideration.
Lord Ennals: My Lords, I am grateful. Does that mean that the unit will not close in two weeks' time?
Baroness Hooper: My Lords, certainly not so far as I am aware.
We are confident that effective arrangements are being developed and indeed are in place to enable specialist units to thrive and flourish in the reformed National Health Service. I believe that, as experience and expertise in contracting grows, other innovative ideas about how these services are best secured and delivered will evolve. We shall see money following patients more and more clearly so that units are properly funded for the work that they do. Where there is a need and a demand for specialist services, they will continue to play an important role in providing for the health and wellbeing of the nation.
I may not have answered all the points raised in the course of the debate. However, I shall look closely at Hansard and write to any noble Lord to whom I have not replied. Again, I add my thanks to the noble Baroness, Lady Masham, for giving me the opportunity to provide some reassurance.
Lord Ennals: My Lords, before the noble Baroness sits down, will she say that she will at least look into the second urgent case that I raised? The B-12 unit in Westminster Children's Hospital is gravely threatened at present.
Baroness Hooper: My Lords, yes. In saying that I shall look into all the points raised by noble Lords, I certainly include the noble Lord's B-12 unit.
House adjourned at twenty-two minutes past ten o'clock.