HL Deb 01 July 1991 vol 530 cc788-98

3.40 p.m.

Lord Waddington

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

"With permission, Mr. Speaker, I shall make a statement about the European Council in Luxembourg on 28th/29th June. My right honourable friend the Foreign Secretary and I represented the United Kingdom.

"It was clear from the events there that Yugoslavia must be the first item on our agenda. I discussed the overnight position with the Prime Minister Lubbers and with Chancellor Kohl before the Council opened. We were able to reach rapid agreement in the Council on invoking the emergency mechanisms of the CSCE, and a meeting is taking place in Vienna this afternoon.

"We also agreed to despatch to Yugoslavia the Foreign Ministers of troika—Luxembourg, the Netherlands and Italy. Their visit brought some respite in the conflict. But the situation was very fragile yesterday and the Foreign Ministers returned to Yugoslavia yesterday afternoon. They secured agreement to the appointment of Mr. Mesic of Croatia as the next President of Yugoslavia and to other measures to defuse the crisis. The situation remains very volatile and the Community will need to be closely involved over the coming weeks. In the meantime, Community aid to Yugoslavia has been suspended. British citizens have been advised to leave Slovenia. Steps have been taken to evacuate British subjects who could be at risk.

"The main item of scheduled business was to discuss progress in the two intergovernmental conferences launched last year, one on economic and monetary union and the other on political union. Discussion centred on the issues raised in a draft treaty text circulated by the presidency, though there was no detailed negotiation of the text itself.

"This European Council—as we had wanted—was a stocktaking. It was not the occasion to take decisions, but we have registered the considerable progress made in the Luxembourg presidency as well as our collective will to reach an agreement at Maastricht in December.

"The conclusions, which have been placed in the Library of the House, incorporate a number of points of importance to the United Kingdom. I made clear that I welcomed the structure of the present draft of the treaty, though some other partners in the Community disagree with it strongly. The present text means that some things are done on the basis of the Treaty of Rome but others on the basis of intergovernmental action in which the Treaty of Rome does not apply and the Commission does not have the sole right of initiative.

"I welcomed the concept of a common foreign arid security policy set firmly within the context of the Atlantic Alliance and stressed the need to work by consensus in this crucial area.

"There is agreement on the preparation of proposals to improve the implementation of Community law. That reflects a British proposal which would enable the European Court of Justice to fine member states which fail to comply with Community legislation. We have long argued for a level playing field, and for full respect of the rule of law, and we are determined to get it. We have a good record on implementation and we believe that all states that sign up to Community law should implement it.

"The conclusions call for early progress on the remaining legislation needed to complete the single market. This means in particular measures on insurance, and air, sea and road transport which are of importance to this country.

"The Council discussed the need to strengthen the community's external perimeter boundary if free movement of people is to be able to take place within it. We also agreed to better co-ordination in the fight against international drug trafficking and organised crime through the establishment of a Central European Criminal Investigation Office (EUROPOL).

"The conclusions also commit us to strengthening the community's links with the countries of Central rind Eastern Europe. This will initially take the form of association agreements with Poland, Hungary and Czechoslovakia. The Government hope that those countries—and probably others—will be ready for full membership in due course.

"I also made clear that there were things in the present draft treaty with which I could not agree arid it was understood that nothing could be agreed until everything is agreed. I explained that, even though, to many, federal union implies decentralisation, the term carried the reverse implication in this country and would not be acceptable in a text to be agreed at the end of the year.

"I explained our reservations about the existing text on the role of the European Parliament. We see a strong case for an increased role for the European Parliament in areas such as control over the Commission through audit of expenditure and measures to safeguard the rights of Community citizens, including the appointment of a European ombudsman. The text entirely reserves our position on the issue of co-decision. The present proposal, involving a complicated conciliation procedure, would not, in our view, improve Community decision-taking.

"In the discussion on economic and monetary union I maintained our reserve on a single currency arid a single central bank. We discussed the issue of economic convergence. The need for such convergence is increasingly recognised by our partners but the nature and extent of that convergence and its relationship with possible target dates for moves to Stages 2 and 3 of economic and monetary union are still for negotiation. All other member states understand that there must in any case be a separate decision by the Government and this House on whether the United Kingdom would move to a single currency and, if so, when.

"The European Council has issued a number of political declarations which are also available in the Library of the House. The Council endorsed the initiative which I took in April to establish a UN register of conventional arms transfers and we will together table a draft resolution on this at the UN General Assembly.

"The Council also endorsed a British and German initiative to improve the co-ordination of disaster relief within the UN system. We envisage the appointment of a high level co-ordinator, with direct access to emergency funding and with the authority to pull together the whole disaster relief operation. We are taking that initiative forward in the United Nations now.

"At British initiative, the Council agreed a text on human rights, the first such declaration ever adopted by the European Council. The Community will use its leverage to promote human rights through the economic and co-operation agreements which it makes with third countries.

"We welcomed the abolition in South Africa of the remaining legislative pillars of apartheid. We also declared our support for the renewal of sporting links with South Africa on a case by case basis where unified and non-racial sporting bodies have been set up. The establishment of such an independent and non-racial body for cricket was announced on the same day.

"I believe this European Council was a good example of the Community at work. We took rapid action to respond to the crisis in Yugoslavia and will continue to work together for a peaceful settlement. We took stock in a businesslike way of the progress made under Luxembourg's chairmanship. There are difficult issues still to be resolved. As in any negotiation there will have to be give and take and a judgment will have to be made by the Government and by the House on the overall package at the end of the negotiation.

"There was a common determination in Luxembourg to work for an agreed outcome to the negotiations by the end of the year. I shall continue to argue for what I believe to be in the interests of our own country and the interests of the Community as a whole."

That concludes the Statement of my right honourable friend.

3.48 p.m.

Lord Cledwyn of Penrhos

My Lords, I am grateful to the noble Lord for repeating the Prime Minister's Statement. The weekend meeting of Foreign Ministers was dominated also by events in Yugoslavia. We note that the Statement says that the three Community Foreign Ministers have returned for a second emergency mission. I shall be grateful if the noble Lord will indicate whether that diplomatic pressure has yet achieved any real success. Perhaps he will say also when its members are likely to report back to the EC.

The Statement refers to British citizens in Slovenia. Perhaps the Minister will outline the steps being taken to facilitate the evacuation of British holidaymakers wishing to leave Yugoslavia. Can he indicate also the number of UK holidaymakers thought to be at risk from the crisis at the present time?

Compared with some meetings in the past, this one was relatively peaceful. I believe that the House will agree that the reason was that the decisions on the main issues have been deferred until the Maastricht summit in December. It is then that the crunch—if there is to be a crunch—will come. Nevertheless, the Statement shows that useful proposals were agreed on. One is the agreement to set up the European security force known as EUROPOL. Can the noble Lord tell us what its precise functions will be and to whom it will be answerable? For example, may we assume that it will work closely with Interpol? What distinction should we draw between EUROPOL and Interpol?

We note the proposal to restrict immigration into the Community. We shall need to look at that very carefully. The Statement mentions the external perimeter boundary. Immigrations rules vary considerably from country to country within the Community. We must ensure that they are all equitable and that the results are equitable. As regards the relaxation of sporting links with South Africa mentioned in the Statement, can the noble Lord say whether that now means the repeal of the Gleneagles Agreement? In this regard we need to have a level playing field as well as in other areas. We also welcome the proposed Community register of arms sales. Can the noble Lord say when the draft resolution will be tabled? At the United Nations General Assembly the Government may be certain that we shall give them full support on that point.

The big issues will be decided at Maastricht. One of the central objectives is the central bank and the single currency. The Prime Minister reserved his position on those two matters in the Statement. Does the noble Lord agree that that means that we do not share the views of the great majority of the Community countries on these essential matters? Can the noble Lord say what he considers to be the prospects of achieving agreement on these crucial points? At the moment it appears that the prospects are not too good, although we wish the Government well. These are momentous decisions to take which will affect the lives of everyone in this country and in the Common Market generally.

Can the noble Lord say whether the hard ecu proposals are still Government policy or have now been abandoned? We welcome the summit communiques that economic convergence should govern any move towards EMU. Does the Minister accept that convergence is not simply defined in terms of inflation, but that it should also include rates of growth and employment levels as well?

Furthermore, does the noble Lord agree that it is also essential that social measures accompany further economic integration? Is it not in fact the case that social policy remains a key area of divergence between our country and our European partners? Does the Minister accept that that is one area in which the Government may, in the Prime Minister's own words, have to surrender something our partners wish to gain", as we on this side have been urging for quite some time? Does the Minister agree that it is essential that the Government should seek to achieve unity between parties and people within the United Kingdom as well as in the Community as we approach this historic meeting, which will be probably the most significant since the end of the last war?

Lord Jenkins of Hillhead

My Lords, I thank the noble Lord the Leader of the House for his courtesy in repeating the Statement to us. I congratulate the Prime Minister on having achieved, so far as it went, a satisfactory European Council from his point of view and probably from the national point of view, too. The co-operation he received in his desire for a six months' pause for breath is an indication of the goodwill which he commands in Europe, largely perhaps by virtue of not being somebody else. It is also an indication that, if Britain shows a little co-operative spirit, it can easily be among friends rather than adversaries in the Community.

The noble Lord, Lord Cledwyn, was right when he said that a great many crunch issues have been postponed until Maastricht. We recognise that the Government will want to take a separate decision on a single currency and have it endorsed by Parliament as is normally done with all major issues of policy. In passing, I must comment as regards the Statement that the sentence, nothing could be agreed until everything is agreed", was rather sweeping by any standards. It may be that we shall want to look at the overall picture in December, but insistence on agreeing nothing until everything is agreed would frustrate most forms of human activity.

Perhaps I may ask the noble Lord the Leader of the House two questions. A separate decision need not be a late one. Does he not recognise that there will be considerable advantages for Britain in not always being the reluctant partner at the end of the queue? On the question of the desirable need for convergence of the economies, will the noble Lord explain why, in view of the alleged economic miracle in the past 11½ years, it is frequently stated that we—perhaps in company with Portugal and Greece—are the only countries of the 12 which could not sustain the rigours of a single currency?

3.56 p.m.

Lord Waddington

My Lords, I am very grateful to the noble Lord, Lord Jenkins of Hillhead, for his congratulations to the Prime Minister on what I believe will be recognised by all impartial observers as a very satisfactory conclusion to the council meeting. The noble Lord, Lord Cledwyn of Penrhos, asked a number of questions about Yugoslavia. I wish that I was able to give him more positive replies than I can. Clearly, the position is very fluid. I do not think that there is anything much that I can add to what is in the Statement itself. There are a number of United Kingdom holidaymakers in Slovenia and they have been advised to leave. No doubt that advice is being communicated to them and they will be leaving at this time.

When one comes to the substantive matters concerning the European Community and the relations between the member states, the noble Lord, Lord Cledwyn, referred to EUROPOL. It is intended as an investigative agency. As I understand it, it is intended to be an organ of the Community where the member states will not just pool their intelligence but together will actually use the intelligence available. We shall have to see how that proposal develops. We in Britain have worked for a long time towards closer co-operation between the member states in the investigation of crime.

The noble Lord referred to external frontiers. We made well known our belief that there has to be a more secure external frontier and the same standard of security throughout the whole of the perimeter of the European Community before one can talk about being able to have completely free movement within the European Community. We have often made clear how foolish it will be for us to sacrifice our advantages of geography and the advantage that we gain as a result of having the ability to have checks at our ports to deal with crime, the drugs trade and immigration. When one looks at the proportion of drugs seizures where the drugs in question have come from other countries in the Community, that point is hammered home easily. As regards the register of arms sales, I gather that the resolution will be tabled at the outset of the incoming Dutch presidency.

I shall now deal with the question of the single currency. As the noble Lord has said, the Prime Minister maintained our reserve on the single currency and the single central bank. We made clear—and there was widespread support for this—that without convergence a number of member states could not cope with the economic consequences of moving to a single currency. The noble Lord is right: there are many measures of the strength of a country's economy which have to be taken into consideration in deciding whether there is sufficient convergence to make a single currency even a remote possibility. All other member states understood that there must be a separate decision by the Government and Parliament on whether the United Kingdom would move to a single currency. We shall not accept treaty changes that commit the United Kingdom to take part in a single currency.

There are differences within the Community on social policy. However, all are agreed on one thing: the Community has a social dimension. We are not prepared to see Community competence extended for instance into the field of industrial relations. Extending qualified majority voting would put at risk all the achievements of the past 12 years. We must not allow over-regulation to lead to extra cost to industry and ultimately, job losses. That is not to say that we have not co-operated in the social action programme. Indeed, 12 proposals have already been agreed. In the 18 measures which were put in place before the beginning of the social action programme we are top of the league in implementing all 18. That is by far the best record of any country in the whole of the Community.

The noble Lord, Lord Cledwyn of Penrhos, is right to say that we should strive for unity in the Community and unity in this country. I can assure the noble Lord that our Prime Minister is fighting to get the most successful outcome of these negotiations in the interests of this country.

I shall now deal with some of the points raised by the noble Lord, Lord Jenkins of Hillhead. Certainly Britain found herself among friends in many of the discussions which took place. If one looks at the draft text, one will find many proposals which originated here in Britain; for instance, the proposal strengthening the supervision of Community finance and spending by the European Parliament.

The noble Lord referred to the phrase: nothing could be agreed until everything is agreed". I am not quite sure that the author of that phrase can be found in this country. It seems to be one of those phrases which has become "Eurospeak". I am not claiming authorship for anybody in this country. However, it sums up quite nicely the attitude at this meeting which was a "take-stock" meeting. It was not a meeting where the Ministers arrive intending to negotiate and come to decisions on specific matters. The general attitude was, "We've got six months' hard work ahead of us. At the end of that six months, we must look at the package as a whole and see whether we can come to agreement on it".

4.5 p.m.

Lord Renton

My Lords, is it accepted within the Community that we have an immigration problem that is different in character and different in scale from the immigration problem of any other country in the Community? Will this be borne in mind when there is an attempt to assimilate immigration laws?

Lord Waddington

My Lords, I am not sure that other countries would accept that we have a bigger problem than they have. Indeed, illegal immigration and the tide of people claiming refugee status is a problem with which all the Community countries are faced. There is a recognition that we have a system of control that is based on our geography which it might be thought foolish for us to abandon.

Lord Stoddart of Swindon

My Lords, does the Minister not agree that events in Slovenia over the past few days have shown that enforced federation simply cannot work? Should not that be a salutary lesson to those who want to stampede the Community into a premature federal state? The Statement refers to the British Government's view that there should be fines for countries who do not implement Community decisions. How are such fines to be enforced? The Statement also refers to the British Government and the British people having to give and take. So far it seems to me that we have done all the giving and the other countries have done all the taking. What proposals are there to ensure that in the future they do some of the giving and we take some of the taking?

Finally, in relation to the central bank, the Prime Minister's view is—and I have just heard it—that this may be a long way in the future. However, he was quite sure—and indeed he is stating—that such a European central bank would have to be brought under the control of a directly elected body. Can the noble Lord tell the House what form that directly elected body would take? Would it be individual parliaments, or would it be the European Parliament?

Lord Waddington

My Lords, it would not be right for me to try and draw any parallel between the events in Slovenia and progress in the European Community. The British Government have made their views quite plain on federalism. As I have made clear, this was not a drafting session. However, the Prime Minister made clear that we could not accept a text which included the concept of federalism, which to many people means a unitary state with a directly elected central executive.

So far as concerns the enforcement of Community law, the European Court would be able to impose fines on those countries which fail to implement directives. That seems the appropriate way to take the matter forward. I cannot see how, in the light of the Statement which I have just read, the noble Lord can say that it has been a question of giving and that there has been no taking. There was not a single sentence in what I said a few moments ago to suggest that our Prime Minister has abandoned any of the great interests of this country.

Lord Beloff

My Lords, is my noble friend the Leader of the House aware—and there is no reason why he should be—that I have spent more than 40 years studying and writing on federalism? Witness my edition of the standard text of federalist papers which is available in your Lordships' Library. From that I derive the inescapable conclusion that a great deal of misinformation is being deliberately spread by those who are trying to push this country into a totally unacceptable form of union. In this sense, though it is perfectly true—and this is where the play on words comes in—if one takes a unitary state, as the United Kingdom was, say, in 1900, and thinks of ways of diffusing power, one could end up in a federation. However, to put a sovereign state into a federation means depriving it of certain essential powers. The question then becomes: would the United Kingdom be better off in relation to a "European government" if it had the same status as South Dakota to the federal Government of the United States, or as Western Australia to the federal Government of Australia? The noble Lord will be aware that those are the only two successful federations—apart from Switzerland—that exist. Both of them have a homogeneity of language and culture which is absent, alas, from the European continent.

Lord Waddington

My Lords, I am grateful to my noble friend. Certainly, this much must be common ground—different people have been arguing that "federalism" has different meanings. Some have said that federalism involves less concentration at the centre and more devolution; others have suggested precisely the opposite. If people have all these different views as to what federalism means, it seems to be a very insecure basis for putting the word "federalism" into any treaty.

Lord Bruce of Donington

My Lords, the noble Lord indicated that the Prime Minister stated most clearly his objection to the term "federalism". Are the Government satisfied that the explanation was concurred with by the Prime Minister of Italy, who, we understand, was asleep for a good deal of the time?

Lord Waddington

My Lords, I made it plain when reading the Statement that the Prime Minister made Britain's position quite clear and made quite plain that Britain would not be able to agree to a treaty's text which included the word "federalism".

Viscount Eccles

My Lords, I congratulate the Prime Minister on having secured six months in which we can look at this problem in more detail. Surely, it is essential that we should have the fullest possible information. For example, the noble Lord, Lord Stoddart, who spoke about a central bank, made it clear to me that he and I think quite differently about central banks. Can we not have a definition of what it would mean if there were a central bank? How much power would it have over credit policies, interest rates and so on? How easy is a bush supposed a bear! Most people in this country think of a central bank as a bear. But perhaps it is only a bush. No one will tell us.

Lord Waddington

My Lords, I was guilty of discourtesy to the noble Lord, Lord Stoddart, in that I did not reply to his question. I did not reply to his question, first, because I forgot to do so; and, secondly, because when I look again at the Prime Minister's Statement I see that it would have been quite unnecessary for me to have done so. The Prime Minister said in his Statement: In the discussion on economic and monetary union I maintained our reserve on a single currency and a single central bank". So there was certainly no giving there.

The correct reply to my noble friend Lord Eccles is that many of these issues are in the future. All the Prime Minister was saying is that he cannot agree to the text of a treaty at Maastricht in December of this year which will say that Britain is committed to a single currency and a central bank; and that we must see how we get on.

Lord Cledwyn of Penrhos

My Lords, I apologise for rising to speak again, but there is one small point in the Statement on which I should be grateful for clarification from the Leader of the House. I quote: a judgment will have to be made by the Government and by the House on the overall package at the end of the negotiation". I assume that means that there will not be a final agreement without the approval of the House. The right honourable gentleman the Prime Minister is of course referring to the House of Commons. Am I right in assuming that what he really means is Parliament, and that the approval of this House will be required as well as the approval of the House of Commons?

Lord Waddington

My Lords, what is made clear is that the treaty would have to be ratified and that there would have to be agreement by Parliament.

Lord Jay

My Lords, can the Leader of the House say whether an English version of this draft treaty which we are all discussing is now available to the British Parliament?

Lord Waddington

My Lords, there certainly was a draft text in the Library of the House. I just assumed, when I read my brief, that that draft text was in English, as I certainly have a copy in my papers here.

Lord Desai

My Lords, we have been told that decisions about a single currency and other issues have been postponed until December. Is not uncertainty in the meantime harmful to the ability of the country to cut interest rates rapidly? Questions of convergence have to be clarified before we enter a single currency. What kind of convergence are we talking about and in what matters? In the meantime, our dithering is leading to a doubt about our credibility in the exchange rate mechanism and is making it difficult for interest rates to be cut properly. Does the noble Lord not agree that it is necessary to clarify as early as possible what we mean by convergence? How rapidly will convergence be achieved, and what do we expect at the end of this process to converge and how?

Lord Waddington

My Lords, for the life of me I cannot see how what is going on can be described as dithering! When it was decided to have two intergovernmental conferences—one on economic and monetary union and one on the political side—it was always recognised that an important matter was being embarked upon by the member-countries; that the negotiations would take a long time; and that the IGCs were not to come to a conclusion until the end of 1991. No one, so far as I know, has ever thought for one moment that we would come to a conclusion on these matters until December of 1991.

One thing is certain—dithering cannot come into it for one moment. I should have thought that questions about convergence might better be addressed to quarters other than the British Government. I have made entirely clear what is the British Government's view about a single currency. Others say that it may be possible to have a single currency very quickly indeed and that we are very pessimistic about it. But they all agree that a single currency could not come about now because of the lack of convergence. How much convergence do they think will make a single currency a possibility within a year, two years, three years, four years, five years or six years? These are questions which can properly be addressed to others.

Lord Annan

My Lords, the noble Lord has just said something extremely interesting about a common currency. I take it that what he is saying is that the British Government accept that it is quite possibly going to happen in time. Does he not agree that some of the comments which were made about the common currency indicate that people have not fully understood the process of diplomacy in which we are engaged at the moment? It takes time. The Prime Minister has done extremely well in restoring an atmosphere of diplomacy. However, the noble Lord, Lord Jenkins, surely made a valid point when he said that the Government's apparent anxiety about this point is curious when so many other nations are perfectly willing to consider the principle and accede to it. Of course, the timing is another matter.

Lord Waddington

My Lords, I am grateful to the noble Lord for what he said. We have gone into these negotiations intending to act sincerely and intending to get the best possible result for the United Kingdom. That can come about only as a result of sensible and honest negotiations. The House can remain confident that our Prime Minister will do the best for Britain.