Political Union: ECC Report

HL Deb 21 October 1991 vol 531 cc1343-96

4.45 p.m.

Lord Oliver of Aylmerton rose to move, That this House takes note of the report of the European Communities Committee on Political Union: Law-Making Powers and Procedures (17th Report, HL Paper 80).

The noble and learned Lord said: My Lords, in introducing to the House the report which is the subject matter of the Motion standing in my name on the Order Paper, I should like to begin by thanking the members of Sub-Committee E who prepared the report and the witnesses who so freely gave of their time and expertise in helping the committee. I would also like to say a preliminary word about the purpose of the, report. It may have come as something of a surprise to some or all of your Lordships, as it certainly did to some members of the Select Committee, that the sub-committee should have undertaken to consider and report on certain aspects of proposals which are still under active negotiation between Her Majesty's Government and the governments of the other member states of the Community and which concern the terms of a treaty proposed to be entered into.

The negotiation of and entry into international treaties is the prerogative of the Crown. While Parliament may criticise, approve, disapprove or endorse and ratify what has been done, it is no part of the parliamentary function in our Constitution to participate in negotiations which are normally conducted on a diplomatic level away from the glare of publicity.

What prompted the sub-committee in this instance to undertake a task which might be thought perhaps to be unconventional, and which certainly was not without its critics, was the unusual manner in which the preparations for the inter-governmental conference were made. The open submission of a working draft of the actual terms of a proposed treaty to general public discussion by the publication of the Luxembourg Presidency text, both in its original and its amended form, created a situation for which, so far as I am aware, there was no readily available precedent.

A year ago the European Communities Committee reported upon the implications for the United Kingdom of proposals for economic, monetary and political union. It is certainly no part of the purpose of the present report—and I do want to emphasise this—to question, amend or detract from any of the conclusions in that earlier report. However, the text, if agreed in anything approaching the form in which it was proposed, would not only confer upon the Community a much wider power to legislate than at present exists but would confer upon the European Parliament equal rights with the Council in important areas of legislation, and would introduce new procedures for co-decision and give new powers to the Council both in foreign and security policy matters and in relation to co-operation in home affairs and judicial matters, so that the powers would then be lost to national legislatures. We felt that all this raised issues of such legal significance that the committee ought to consider and report upon them.

That was not, I stress, for the purpose of influencing negotiations, but simply to ensure that the implications of the proposals and the legal and practical consequences should be fully appreciated well before the debate which would ordinarily take place only after negotiations had been concluded and Parliament was asked to ratify what has been done. After some informal consultation with United Kingdom Ministers, therefore, it was considered that the legal issues did indeed call for inquiry and report.

I hope that what I have said adequately explains the genesis and purpose of the report and that I can turn to a summary of the contents. There was, of course, a time in the recent past when it seemed that the effect of other and even more controversial proposals of the Netherlands presidency might have the effect of rendering the report of purely academic interest, but those proposals having now, as I understand it, been decisively rejected as an acceptable basis for negotiation, we are back to the revised working draft proposed in June of this year by the Luxembourg presidency. In preparing what I have to say to your Lordships, I have tried to summarise the report as shortly as is consistent with intelligibility. It has not been easy and if I run a few minutes over what might be considered to be the normally expected time in an opening speech of this nature, I must ask your Lordships' indulgence.

I have already largely anticipated what is said at greater length in Part 1 of the report which contains the introduction and incorporates reverentially what I hope readers of the report will find very useful material in appendices 3 and 4. The former contains a comparative analysis of the text set against the recommendations in earlier reports of the committee, which indicates that a good many of the recommendations have in fact been reflected in the text, while the latter consists of what I hope will be a useful exegesis of the role of the United Kingdom Parliament in relation to the conclusion of treaties.

Part 2 is concerned with definitions. The role played by semantics in both domestic and international misunderstandings is not always appreciated although it became perhaps more widely understood with the publication, many years ago now, of Ogden and Richards' work on the Meaning of Meaning. The report uses three key terms, widely used—and frequently misused—in press reports and in political speeches. It is crucial to an intelligent understanding of the report that those who write and those who read should use the words in the same sense. "Subsidiarity" is a word which seems to mean different things to different people. A small section of the report —paragraphs 90 to 92—is devoted to it. But there are two other expressions which are frequently employed in argument with a more or less emotive appeal. Those are "sovereignty" and "federalism". Part 2 of the report is devoted to clarifying, at any rate so far as is possible, the senses in which those words are used in the argument and in the conclusions.

Our concern in preparing the report has been primarily with proposed alterations in the balance of power between the Council and the European Parliament and between the Community and its member states. Those, we felt, raised important matters of policy and principle to which the attention of the House should be drawn. The report concentrates on the legal and practical implications of particular areas of the revised text. Those are, first, the proposals for what is called "co-decision" in law-making procedures; secondly, the introduction of the principle of subsidiarity as a substantive obligation in the exercise of powers; thirdly, the proposed extensions of Community competence; fourthly, the proposed extensions of the power to adopt legislation by qualified majority voting; and fifthly and finally, the future structure of the Community, in particular, common foreign and security policy and co-operation on home affairs and judicial matters.

As regards the first of these, co-decision, the report contains a discrete section—Part 3—devoted to summarising the existing law-making procedures of the Community and describing the role of the European Parliament in Council legislation. The Parliament has for some time regarded that role as being too restricted, and by a resolution passed in July of last year it sought to introduce a procedure for co-decision for certain classes of Community legislation. What has now emerged in the Luxembourg text is a new draft Article 189A. It purports to create a new category of law called a "Community law" in addition to the existing measures of regulation, directive, and decision. This is envisaged as applying to "important matters", whatever that may mean, as having general application and as either binding directly on member states or as binding as to the result to be achieved and to be implemented by national legislatures. Page 14 of the report sets out in diagrammatic form the complicated stages through which such legislation is envisaged as proceeding.

I do not intend to take up your Lordships' time by going through this in detail. The convoluted nature of it can be seen at a glance. The salient feature is that if, at the end of all, the Council and the Parliament fail to agree—and neither of them is supreme—the legislation simply falls to the ground. One cannot help feeling that that result at the conclusion of a laborious and tedious procedure would leave the members of both bodies sharing the frustration experienced by the daughters of Danaus as they filled their bottomless buckets; but at least they had done something to deserve it.

What was urged in favour of what might be thought to be a cumbersome and inconclusive proceeding was, first, that it draws a needed distinction between primary legislation and implementing measures more properly the province of the Commission; and, secondly, that it increases the democratic accountability of the Community legislative process. The committee did not feel that either argument carried any real weight and concluded that the whole concept of co-decision is inherently unsound. We concluded that the real object of the exercise was to increase the legislative power of the European Parliament. That is a perfectly proper and understandable objective, but we did not feel that it could be satisfactorily effected by a procedure under which nobody has a decisive say, which can only lead in the end to conflicts between the Council and Parliament, which involves substantial delays in introducing what may be critically important legislation and which is likely to lead to more and more compromise texts or deliberately ambiguous provisions resulting in more and more litigation before an already overburdened European Court.

As regards democratic accountability, the members of the Council are, of course, accountable to their own governments and thus to their national parliaments. The members of the Parliament are, of course, democratically elected, although accountable only in the sense that they must ultimately submit themselves for re-election. The Commission, however, is its own master and the committee would certainly favour a procedure for scrutiny so that proposals for legislation delegated to the Commission would be laid before the Parliament, as suggested in paragraph 154 of the earlier report on economic, monetary and political union, and the formalisation also of the existing practice under which the Parliament can call upon the Commission to initiate legislative proposals. The latter is in fact proposed in the new Article 137A of the Luxembourg draft. This is an area which really does deserve some attention. As matters stand the Community is swamped with a mass of regulatory material churned out by industrious bureaucrats in Brussels without anyone having a real opportunity to scrutinise it or question its effect before it comes into operation.

The committee also draws attention to the urgent need for the provision of stable and efficient working conditions for the Parliament and the agreement between member states on a site for a single seat for the Parliament where members can have access to the parliamentary staff, to its files and to other institutions. The present situation in which the Parliament has no permanent pillow upon which to lay its head is both unworthy and absurd.

However, it was our conclusion that there is no need for a radical restructuring of legal procedures, although we have ventured to call attention to the need for the introduction of procedures for making minor amendments to existing legislation and the need for consolidated code to replace the almost impenetrable proliferation of individual measures. We also wholeheartedly welcome the power which draft Article 171 proposes to confer on the European Court to impose penalty payments on those member states which fail timeously to comply with directives and previous judgments of the court. Your Lordships will be aware that the United Kingdom has an excellent record in this regard, but that does not apply to all member states.

I turn now to subsidiarity. There is an important point here which is more than merely semantic. To some people the word means that organs at the highest level should do only those things that they can do better than organs at a lower level; to others it means that organs at the lower level should do only those things which they can do better than organs at a higher level. The Luxembourg text seeks to include in the treaty a specific provision that the Community shall take action in accordance with the principle of subsidiarity. In the committee's view, this would open up a limitless vista of disputes about whether particular Community measures were or were not authorised. But how does one decide whether one organ or another can do something better? It would also provide a fertile ground for the creation of new legislative powers in the Council by enabling it to act in any case where it thought that it could do so more effectively than member states acting separately.

In the committee's view, subsidiarity, however construed, is properly no more than a political principle. It is certainly right that it should permeate Community activity. However, in our view it would be quite inappropriate that its application should constitute a positive legal requirement to be determined judicially. In effect, that would be to hand over t3 the European Court an important aspect of the legislative function. So the committee remained even more strongly than before of the view expressed in the earlier report on monetary and political union that, if there is to be any reference in the treaty to the principle of subsidiarity, it should not be expressed in the legislative provisions or substantive articles but rather stated as an objective only in the preamble.

As regards the extensions of Community competence which are proposed in the draft, these broadly divide into two categories. First, there are those areas —such as environment, energy research and consumer protection—where the Community competence has already been expanded in reliance upon Articles 100, 100A and 235 of the treaty—articles upon the use of which the committee has traditionally kept, and still keeps, a carefully watchful eye. We have all been very much aware of what has been styled the "creeping competence" of the Community in matters formerly consicered to be in the exclusive domain of domestic legislatures. However, the committee's view here is that the precise specification of such areas in the treaty is not only unobjectionable but actually would be useful as regards defining more precisely the objects and limits of Community action.

The other category consists of matters such as transport safety, workers' rights, health and safety at work, co-ordination of rules on animal experiments and human health protection which may be described as "borderline". Here again, if these are acceptable to all member states, the committee sees the minor delimitation of boundaries as unobjectionable. In general, for instance, the committee welcomes the proposals for Community co-operation in education and cultural matters. Similarly, the proposed rights for "Union Citizens" in Articles A to E (on page 42 of Appendix 3) do not intrude upon member states' nationality legislation and should, in the committee's view, be broadly acceptable.

The proposals for measures within the specified areas of Community competence to be adopted by qualified majority voting are, however, rather more controversial. These will be found on pages 45 to 47 of Appendix 3 to the report. The qualified majority voting procedure is a useful one, both where there is a need for a large number of decisions in a limited time and where there is a clear and overriding Community objective which ought not to be impeded by a single dissentient voice. Beyond this, however, it is the committee's view that it is likely to lead to unsatisfactory legislation because it accelerates the process unduly and limits the possibilities both of injecting alternative views and of resolving differences by negotiation from equal bargaining positions. The committee is particularly concerned that it may lead to the more frequent adoption by the Commission of a practice—which has sometimes been adopted in the past and against which we have protested on several occasions—of adopting so tight a timetable that proper scrutiny by national parliaments simply becomes impracticable. In place of this suggestion, we should like to see a systematic analysis of the cases where qualified majority voting is appropriate and its application in such cases through the body of legislative powers in the treaty.

Finally, paragraphs 105 to 113 deal with the proposals for the future structure of the Community. What may be thought to be the really controversial article is Article A which speaks of progression towards: a Union with a federal goal". That is a phrase calculated to excite the highest suspicion; but it has to be said that the clear implication of the text is that member states remain independent sovereign states, so that any further move towards "federation" in the true sense of the word would require a new treaty providing for the Community's constitution as a federal entity. So it would be wrong, I think, to see the text as, in itself, an attempt to incorporate member states into a single federal entity or even perhaps as a significant step along that road.

However, the danger in employing expressions indicative of an ultimate objective of a truly federal constitution, albeit requiring a new treaty for its implementation, is that it opens the door to the suggestion that such a constitution is not merely an imaginative ideal to be contemplated as a possible future, but is a positive commitment. To that extent, as it seems to me at any rate, one is entitled to say very firmly, "That wasn't part of the deal" or, if one is classically inclined, "non haec in foedera veni".

Although the draft text leaves the member states with the essential liberty of action in international affairs appropriate to truly sovereign states, it will, if adopted, undoubtedly impose upon member states a substantially stronger obligation to seek to conform to a common position than is the case under the European Political Co-operation as formalised in the Single European Act. Nevertheless, any legal obligation to conform to a joint line of action would be one arising under international law only and not —this is the critical point—one enforceable through the juridical organs of the Community.

Therefore, the committee was satisfied in the end of the correctness of the view of the Foreign and Commonwealth Office that the draft, although very much open to improvement, is compatible with the retention by member states of their sovereign status in international affairs. If adopted, the provisions are likely to lead to an increase in the external competence of the Community, assuming always the willingness of member states to formulate a joint line of action. But that is a prerequisite and the competence will flow from it as a matter of evolution. The committee favoured that evolutionary approach. I should perhaps mention that this was one of the principal departures proposed by the rejected Netherlands draft which proposed that foreign policy be fully integrated and brought within the Community competence, giving jurisdiction to the European Court, over the legality of the application of procedures for deciding upon joint action. As regards co-operation in home affairs and judicial co-operation, the committee broadly welcomed that but felt that co-operation on matters such as asylum, visa and immigration policy should remain on an inter-governmental basis and not be brought within full Community competence.

I have—I fear at some length—endeavoured to summarise the main points covered by the report in a way which will, I hope, demonstrate to your Lordships why the committee has been concerned at proposals involving a substantial shift in the balance of power both between the Council and the Parliament and between the Community and its member states. Its view is best summarised in the last sentence of paragraph 134 of the report: A shift in the existing balance of power should take place only following an informed debate as to the probable consequences and not in pursuit of some imagined destiny. It is the committee's hope that the report has made and will make a positive and useful contribution to that debate and it is in that light that I commend it to your Lordships. I beg to move.

Moved, That this House takes note of the report of the European Communities Committee on Political Union: Law-Making Powers and Procedures (17th Report, HL Paper 80) —(Lord Oliver of Aylmerton.)

5.10 p.m.

Lord Boyd-Carpenter

My Lords, your Lordships are greatly indebted to the noble and learned Lord, Lord Oliver of Aylmerton, for that most admirable and intensely interesting summary of the committee's report. We are equally indebted to the Select Committee itself for the enormous amount of work that it has put into dealing with those complicated and potentially important issues. The noble and learned Lord said that it was unusual for the committee to go into matters which were not yet formalised and which were still under discussion. I am glad that the committee so decided, because part of the difficulty for many of us in dealing with such matters is that their very complexity and elaboration means that unless one spends a great deal of time studying them one is incapable of forming sensible opinions upon issues which, for better or worse, will affect our country's future in considerable degree.

I feel that your Lordships' House, and the country, is indebted to the Select Committee. I shall later suggest further bases upon which that gratitude could be further earned. The noble and learned Lord explained how the Select Committee went to work. He succeeded in greatly clarifying the issues involved. It is gratifying to those of us who, like myself, favour your Lordships' House in its present form and composition, that it is a Select Committee of this House, rather than of another place, which has done this remarkable work. I doubt whether a House differently constituted could have produced a Select Committee able to devote so much time and intellectual authority to discussion of such issues. It reflects to the credit of your Lordships' House—I stress in its present form —that we should have this report.

There are one or two issues that I should like to raise with which I hope the noble and learned Lord will deal when he replies. He dealt first—it arises at paragraph 130 of the committee's conclusions—with the use of the word "federal". It is unfortunate that that word should creep into any of the provisions that we may be called upon in the future to accept. I am aware that it is possible to argue different meanings of the word "federal". There was some interesting correspondence in The Times recently on that issue, but the fact remains that if we use the word "federal" in connection with the European Community we are carrying the implication that we are creating a body which will be the superior of its constituent members, able in the ultimate to tell them what they should or should not do. For every reason, or if only for the avoidance of misunderstanding and anxiety and perhaps of international friction in the future, it would be useful if the word "federal" could be eliminated from all the documents.

I do not believe that in this country the great majority of our people wish to enter a federal Europe. I believe that there are some European countries that would like that idea. They are entitled to their opinions; but unless and until people in this country make it clear that they are prepared to contemplate entering a federal set up, with all its implications of the superiority of the federal authority over the national one, it would be much wiser to keep the word "federal" firmly out of any of the documents.

Paragraph 134 of the report—again to which the noble and learned Lord referred—refers to the balance between the Community and individual states. The summary of the position, to the effect that there should be no transfer of power from national states to the Community, without a clear decision to that effect having, been adopted, is right. We are at risk—given perhaps the activities of the Brussels bureaucracy—of having, our independence gradually eroded and the Commission, in particular, and perhaps the European Parliament assuming greater authority over the affairs of this country than most of us desire to see happen.

It may well be in future years that opinions will change, but a British government can operate now only on the basis of what is prevailing opinion in this country. As I understand it, that opinion favours the closest co-operation with our European friends but does not wish to allow the rights and independence of this country to be overriden in that way.

One cannot help sometimes feeling in that context that our European friends are apt to forget that if it were not for this country and the resolute line that it took 51 years ago there would be no free Europe to be discussing such matters. The fact that in 1940 we, and we alone, stood up to Nazi Germany, when the whole of the rest of Western Europe was conquered and subservient to it, is a fact that younger generations at any rate of our European friends are apt to forget. It would perhaps do no harm on occasion to remind them that a free Europe, able to discuss these matters in freedom, able to negotiate what seems to it to be best has been possible only because this country, and this country alone, for 18 months resisted tyranny.

I turn now to another point. I expressed gratitude a moment ago to the Select Committee for the immensely valuable work it has done. I remind your Lordships that gratitude has been defined as "a lively anticipation of favours to come". I hope that the Select Committee will examine a matter that has arisen since the report was drawn up and even since it was printed. During the past few days we have had the intervention by an EC commissioner in writing to the Minister of Transport demanding, as I understand it, that seven schemes for road and rail improvements in this country should be halted because in his belief they conflicted with European standards for the environment.

Leaving aside the fact that it appears to me that Mr. Ripa di Meana has no authority whatever in the matter, it would be enormously serious if our control of our road and rail system should be eroded in this way. I speak with interest and enthusiasm because, as some of your Lordships may remember, I was at one time responsible for our roads programme. In the middle 1950s I was responsible at the time of the introduction of the motorway system. It was difficult enough, I can tell your Lordships, to secure a sensible degree of compromise between the need for an efficient road system and the need not to damage the environment or upset local feeling.

If a superior authority intervened and demanded that work already started should be halted, we should be in great difficulty. I do not see how the views of the EC or Mr. Ripa di Meana himself can be of binding importance. After all, in any road or rail programme one has to decide on a compromise between an efficient system of transport and the acceptable degree of damage to the countryside and in particular the amenity of life for those who live near the work. This is a difficult exercise of judgment at any time. Our present Minister of Transport is admirably handling a difficult problem at this time in connection with the seven proposals.

If one examines those proposals solely from the point of view of amenity and the environment, as Commissioner Ripa di Meana seems to, one ignores the other vitally important factor—the contribution which these developments can make to our economy. Presumably that is of no interest to the Commissioner for the Environment, but it is of considerable interest to the British Government and people, and also to your Lordships' House.

It is important to get it clear and well established that Mr. Ripa di Meana's letter to the Minister of Transport has no binding authority at all behind it and that there is no reason whatever to believe that even with the next stage in the development of the European Community we shall hand over control of our road and rail systems and their planning to the Commission. It is essentially a matter for this country alone to decide, as parallel issues are only for other members of the Community.

I suggest to the noble and learned Lord, Lord Oliver of Aylmerton, that it would be helpful if at the next round the Select Committee were to examine the issue and help your Lordships and the country by giving a clear assessment of the position, the rights and wrongs of the matter and suggestions for the line we should take.

This debate is very important indeed. I know that a number of your Lordships will have serious contributions to make. I believe that we are greatly assisted by the Select Committee. If I have ventured to suggest any further employment for it, I hope that the committee will take it as a compliment rather than insulting interference.

5.25 p.m.

Lord Jay

My Lords, I fully agree with the noble Lord that this is an excellent analytical report, all the more so for being unconventional. The House should be grateful for it. However, by implication it perhaps underrates the extent to which all the legal and bureaucratic devices are a vehicle for the long-term aim of turning the European Community into a centralised super-state. I emphatically agree with the committee's view that a transfer of power from the EC Council to the Strasbourg Parliament would not make the Community any more democratic. In paragraphs 78 to 80, the report rightly states that members of the EC Council are ultimately accountable to their national parliaments.

After the UK originally joined the EC in 1973, some of us in the other place laboured long and hard in the scrutiny committee and elsewhere to establish the principle that in all major EC legislation Parliament must have effective control over what Ministers do and how they vote in the Council. We have made some progress, but in my view not enough, even yet, in the other House. In this House, everyone agrees that the Select Committee on the European Communities has carried out invaluable work in scrutinising the legislative proposals so that they can be sensibly debated, as I hope we are doing now.

Transfer of power from the Council to the Strasbourg Parliament would not be democratic for the following reasons. The basic, root principle of democratic government is surely this: that people must not be bound and coerced by laws which they have had no share, however indirect, in making. Of course our own representative Parliament is indirect and imperfect, but those of us here who have spent some years in the other place know, to their cost, that contact with and pressure from their constituents of a pressing, variegated and persistent kind is a reality. It is not just a constitutional myth. A parliament in Strasbourg whose members have half a million or more constituents would be only a ghost of representation as we know it.

The popular political feeling everywhere today, especially in Europe, is for more closeness and not more remoteness between the government and the governed. After all, that is the argument for having local government. It is also why most of the Soviet Union and Eastern Europe have revolted against blind, remote control from Moscow by rulers who had no real contact with the people whom they purported to rule.

Indeed, today from the Baltic states to the Ukraine, from Poland to Croatia and beyond people are calling for closer and not more remote government control. It is a rather strange irony that at this moment, when the demand everywhere is for closer and more democratic government, the Brussels machine should appear all the time to be seeking to drag us into what can only really be called an out-dated system of bureaucratic centralism. As has been mentioned, Brussels is even now trying to intrude into the controversy over the Winchester by-pass. That hardly seems to be in accordance with the principle of subsidiarity, however one interprets that.

As the report rightly points out, the proposals for more authority for the Strasbourg Parliament are intended not really to improve methods of government but rather to increase the power of the centre. For these cogent reasons the British Government should, in my view, resist any further transfer of legislative or other power away from the British Parliament and electorate.

However, there is another pressing reason for that policy, which is that every further twist of the legislative and official network shackling EC member states to the centre will make it harder for the emerging Eastern European countries—and indeed the EFTA countries—to join the EC. After all the upheavals and the struggles for freedom they have experienced during the past two years, those countries will hardly want to reshackle themselves once again. What is needed in the real Europe today is a much wider, looser and more liberal Community embracing all these countries with free trade between them. However, the countries concerned should be able to make their own decisions on internal affairs. The Community should embrace any country that is genuinely democratic and wishes to join it. That is what the British Government should aim for as long as Britain is a member of the Community.

The EC has indeed no right to shut out the Eastern European countries and to continue, as is now the case, to impose tariffs, restrictions and other measures on their goods. Those countries are often far poorer and needier than the states within the EC. Far from uniting Europe the exclusion of those countries from the EC would divide Europe with a new legalistic curtain. Unfortunately a looser, more liberal, decentralised Community is not what M. Delors and his colleagues seem anxious to establish as their long-term goal. M. Delors was reported last week as saying that the long-term aim is a new European superpower.

In the 1950s M. Monnet and M. Spaak admitted quite candidly that the economic aspects of the Treaty of Rome were only a cloak to conceal the fact that the real aim was to supersede national independence in Europe altogether. The long-term objective was to rival the Soviet Union and the United States as superpowers.

The mainspring of French policy today in all this is to tie down a resurgent Germany by legalistic ties. Frankly in French policy there lurks an ominous streak of anti-Americanism which can be dangerous. That is one reason why there is now an emerging impulse for the EC to indulge in security and defence policies. The urge to create a second and rival United States is potentially dangerous. It can damage NATO and it can discourage American co-operation with Europe. That co-operation has, after all, guaranteed peace over the past 45 years. I hope the Government will firmly resist any more intrusion by Brussels into security or defence matters under the guise of WEU or anything else. Certainly I hope the Government will resist any plans to place UK Armed Forces outside the control of the British Government.

Meanwhile if Britain wishes to remain still an independent country, we should remember that it is not just parliamentary sovereignty that is at stake but the sovereignty of the electorate. After all, Parliament derives its legitimacy only from its claim to be representative. For that reason—and because few other countries can make drastic changes in their constitutions without some special procedure involving the electorate—I believe Parliament has no right to endorse any treaty emerging from Maastricht which alters our constitution substantially until the electorate has been specifically consulted. The noble and learned Lord rightly called for an informed debate. I think the electorate and Parliament should join in that informed debate, particularly if the treaty contains provisions which would dishonour the pledges given to the electorate in the 1975 referendum.

5.35 p.m.

Lord Wilberforce

My Lords, following on what was said by the noble Lord, Lord Boyd-Carpenter, I too am glad that this House has decided to debate this report We in this House are particularly well equipped to consider all aspects of Euro law-making. We have among our body a number of Members of the European Commission. We also have former Members of the European Parliament, two of whom were Members of Sub-Committee E. I am glad to note that they will speak this evening. We also have among our body a former president of the European Court of Luxembourg. Shortly we shall have two former members of that court among us when Sir Gordon Slynn joins us.

We are considering a single process which starts with a decision to legislate on some area of Community competence, continues with the drafting of legislation and debate upon it, and ends, one hopes, with enforcement. That is a general process which in the end has to be commended to public opinion. The report which the sub-committee has produced—I had the honour to participate in it—deals with the whole of the process.

As regards the decision-making process, I am particularly happy to agree with the conclusion suggested by the report against co-decision. One has only to look at the chart on page 14 of the report to realise that co-decision would introduce a process of absolutely unbearable complication. The existing process is shown on page 13. That process is elaborate enough, but it is well established and seems to work. It can sensibly be improved without impairing its essential character. Moreover, I am convinced that Article: 189, which is the key article defining the types of European legislation, should not be replaced or even supplemented by a new article defining something called a Community law. Article 189, as interpreted and somewhat expanded by the European Court of Justice—one may frankly admit that that is the case—is the whole foundation of the legal structure of the Community.

Article 189 contains two letters "i" and "n", making the word "in". The word "in" appears in relation to the phrase "in all member states". Mr. Philip Allott of Trinity College, Cambridge, has said that that phrase has changed the course of European history, having terminated the supremacy under the constitution of national parliaments.

The previous Netherland proposals, which introduced other proposals, have, I am glad to see, been omitted from the June draft with, however, a suggestion that they might be revived in 1996. I am sure that we should oppose a change in the existing article, either now or then.

I should like to comment briefly on three further points. First, there is the question of enforcement. As my noble and learned friend has said, there are different standards throughout the Community between those who, like the United Kingdom, are meticulous in carrying out Community legislation or directives and others who take a more relaxed attitude. Whether the divide is a north-south divide or a divide between the Protestant and Roman Catholic ethos I do not know, but it certainly exists in a very intense form. It may have a serious effect on our competitive power if it remains.

The report addresses the issue in paragraph 121, and the Luxembourg proposal does so in Article 171. So far I support the recommendations. There should be a mechanism of fines by the European Court. However, I doubt whether it is enough to require a decision by the Commission to prosecute followed by a decision of a busy court to impose the fine. The occasional sledgehammer may not be enough to overcome what is a pervasive practice. While I welcome the UK proposal for a resounding declaration to be made by member states underlining the importance of implementing Community directives, I doubt whether that will penetrate far into the minds of French farmers or the more lawless elements in Sicily or Greece.

Fines and a declaration are all very well as far as they go, but we may have to contemplate a separate compliance agency within the Community, with its own staff and with a specific duty continuously to monitor observance of Community legislation, to influence public opinion in member states and to change the ethos from a comfortable disregard of EC regulations to one of reasonable compliance to a common standard, which will not be possible overnight but must be done.

My second point relates to home affairs and judicial co-operation, which is dealt with in paragraphs 111 to 113—somewhat skeletally and even blandly. That is not the fault of the sub-committee. There was little time to prepare our supplementary report and we could make conclusions only on the basis of the evidence that we had heard. The so-called third pillar ("pillars" have entered into the jargon) may be becoming of importance. People in this country and in other countries are sensitive about their criminal and civil law. From another angle, co-operation or harmonisation in suitable cases ought to extend beyond the EC mechanism. There are the sensitive areas of asylum, immigration, border control and others. On that point I agree with the Foreign Office evidence that most of those matters would best be dealt with by co-operation outside the European Community mechanism, either by administrative co-operation or by negotiation of conventions.

I see particular objection to the suggestion that those should be the subject of European Community legislation, with implementation regulated by qualified majority voting. I also very much doubt the expediency of automatically entrusting jurisdiction over these matters, either by way of interpretation or enforcement, to the European Court of Justice. In some cases that may be acceptable and useful; in others, especially where the subject matter may extend beyond the European Community, it may not be so. I made that point a few months ago in discussions about international contracts.

I am glad to see that in Articles B and C the June draft omits some of the more troublesome proposals contained in the April draft. However, they may be revived and this area needs to be watched carefully and taken seriously.

Finally, I should like to say a word on subsidiarity, which one cannot keep out of any debate. I was in favour of the line taken in the report that subsidiarity should be regarded as an underlying political principle rather than be stated in a prescriptive text which could then be justiciable in the European Court of Justice. However, like others who have spoken, I am alarmed by the reported proposals from Brussels relating to certain current projects in the United Kingdom concerning the environment—motorways and the Channel Tunnel. I agree entirely with the noble Lord, Lord Jay, that here, if anywhere, subsidiarity ought to have full effect, particularly since subsidiarity was introduced into the treaty mechanism in the Single European Act precisely in relation to environmental matters, and we are now concerned with environmental matters. If those particular proposals proceed I should be inclined to change my mind and let the European Court of Justice decide whether or not they or other similar proposals respect the principle of subsidiarity. Perhaps we are unduly alarmist; we must hope that we are.

With those brief comments I express my sense of privilege at having been able to work under the brilliant chairmanship of my noble and learned friend and having taken part in the preparation of the report.

5.46 p.m.

Lord Beloff

My Lords, in adding my thanks to the chairman of the sub-committee which prepared this admirable report I have to point out that I am the third successive Fellow of All Souls to take part in the debate. For that reason I do not propose to argue with my two predecessors, both of whom are senior to me. However, I wish to draw on experience of the college which is different from theirs because it is part of its functions as a teaching and research body. I have spent a great number of years, until my retirement, studying federalism, teaching about federalism and writing about federalism. For that reason I find some of the arguments about the European Community—and they arose while I was a member of Sub-Committee E—a little remote from the reality.

After watching the evolution of the Commission and of the Community, I am inclined to think that it might have been better to have a genuinely federal structure in Europe as there is in the United States, Switzerland, Canada or Australia. Then there would at least have been a democratic legitimacy for all the various levels of government. As the noble Lord, Lord Jay, mentioned, the Community has contrived to get round the problem that no one wanted a federal structure by creating a set of institutions designed, and exploited, to create a centralised form of government without democratic controls.

It is, after all, a part of human nature. If one appoints a number of distinguished persons who may have held high office in their countries or who hope to hold high office in the future and tells them that they are Commissioners for Europe, is it likely that they will remain content with the original competence which they have been assigned and will not try by every legitimate means to extend their competence? It would be curious if they did not.

Furthermore, because the activities of the Commission are in a broad sense what we would call legislative—one could come to whether those forms of legislation are appropriate, but let us assume that the activities are legislative—you must then have—this is where the parallel with the federation comes in—interpretation by a court. It seems to me, without any disrespect to learned men from this and other countries who have served on that court, that the jurisprudence of the European Court is different in its nature and in the way that it is carried through from the jurisprudence of the courts with which we are familiar, including your Lordships' House in its appellate capacity. That is to say—this point is freely admitted by members of the court in lectures, debates and discussions—that they look not merely at the text before them and consider whether it corresponds to a power actually conferred upon the Community, but they look at it also in the light of the way in which their decision will assist in the growth of Community powers.

There has therefore been—I am no lawyer; I shall give one simple example—a blurring by the court of the distinction between a directive and a regulation and a gradual assumption of the view that a directive, which was supposed to be something for individual governments wholly to carry out into their national law, already has some direct effect on not only the governments but the citizens of member countries. It is as a result of that that we had the imbroglio with Mr. di Meana to which reference has been made. There are therefore two powerful instruments of centralisation.

Against that, we are told that the democratic deficit must be made up by the European Parliament. If I have any quarrel—and it is the mildest of quarrels —with the report of the Select Committee, it is that, although it points out the weaknesses of that parliament, it does not quite sufficiently point out the way in which, because of those weaknesses, it is wholly disqualified from acting in a serious capacity as giving democratic legitimacy to the activities of the Community.

What would be said of the United Nations if it had not been given a building of its own in New York but told that it could use the City Hall whenever Mayor Dinkins and his associates did not happen to need it? What would be said of the United Nations if it was told that there was no room in the building for its archives or its staff and that they could not be accommodated in New York, but that room could be found for them in Atlanta, Georgia? Finally, what would be said of the United Nations if it was told that its committees would have to meet alternately in Cincinnati and Louisville? We see at once if we look at that parallel—you could take a similar parallel from our own Government if our Parliament sat in York and its committees in Derby or wherever—that the European Parliament is an expensive farce. Only Aristophanes could do justice to that peripatetic service.

But why is that so? As we know, the European Parliament has tried to fix its location. The French Government, who are the main source of inspiration and the driving force in the Community and have been so ever since Jean Monnet and Schuman, will not sacrifice having an important institution in Strasbourg. Strasbourg has always been a problem for the French ever since Louis XIV grabbed it in the 17th century. They can make the citizens happy by having the European Parliament there. On the other hand, it is quite understandable that the citizens of Brussels—a city in which nothing important had happened before except for a ball on the eve of Waterloo—want to have as much as they can in that city. As for Luxembourg—or, as one might call it, the Ruritania of Western Europe—no one could be surprised that it gets what it can.

You therefore have a parliament that is in effect non-existent. Quite apart from the point about representing constituencies of half a million, attendance there is spasmodic; it has no inner structure for developing policy; it has no leader of the house and no leader of the opposition; and it is not a serious legislative body.

We must therefore face the fact that we are being asked, and will be asked at Maastricht and have been asked n the Luxembourg document and in the Dutch document, to hand over further powers to institutions which, apart from the Council of Ministers, have no democratic legitimacy. How can the Council of Ministers and the busy colleagues of the noble Earl —not only those in the Foreign and Commonwealth Office but the Prime Minister himself and the various government departments—act as a legislature in addition to carrying out their primary responsibilities for administering the affairs of this country?

We do not realise the extent of the talk about federalism—I agree with my noble friend Lord Boyd-Carpenter; I do not want the word "federal" there either—but we have given away a great deal already. I now regret that when I was a member of Sub-Committee E—and from what I said it can be seen why I have never been asked to serve on it again —I was not sufficiently forthright in pointing out that the so- called Single European Act, with its majority voting, was yet another breach in our affairs.

There is a great deal of talk about sovereignty. One is very much mocked if one talks about sovereignty. I am not worried about sovereignty. It is an abstraction in the same way as subsidiarity. What is important is whether the citizens of an individual country are getting what they have the right to expect from the government whom they elect and the taxes that they pay.

I do not know how many noble Lords were in the House at Question Time last Tuesday. I know that my noble friend Lord Harmar-Nicholls was there because he raised the point. We were then told that, because of a European Community directive, the British Government were unable to pass legislation which would force manufacturers of motor cars to incorporate safety devices. We were told by the Minister who answered the Question for the Government that we could not have more safety, as it were, in our cars than was generally acceptable across the length and breadth of the Community. I have no doubt that this will be argued for elsewhere on the grounds of the freedom of trade, level playing fields and all the rest, but it comes to this: if someone steals a car—and there have been many sad cases of that recently—he may destroy property and, alas, as we have seen, he may destroy life—his own life or the lives of other citizens whom he happens to run down when propelling a motor car which he is unable fully to control.

Going back again to when I taught a little political philosophy, I would have thought that the first business of a government is the life and property of their citizens. It is difficult to see how we can worry about entering a federal system when in so many ways we already admit that our Government have sacrificed their primary role of protecting our lives and property. Therefore I believe that when the crunch comes—though it may deal with matters upon which perhaps other noble Lords may touch, apart from questions of aligning policies in foreign and defence affairs—we have to decide whether we want to be part of a federal structure or would rather find some way to retain our ability to deal with the problems which our own society asks us as a legislature to tackle.

6 p.m.

Lord Bruce of Donington

My Lords, I rise with some trepidation to express agreement —possibly for the first time—with both the noble Lords, Lord Boyd-Carpenter and Lord Beloff, at the same time. From my point of view that is even more poignant, since in my few remarks I shall seek to extricate Her Majesty's Government from their present difficulties, which is a rather unusual role for me to play. Before doing so, I should like to express my pleasure at having been able to serve as a part-time member of Sub-Committee E under the chairmanship of the noble and learned Lord, Lord Oliver of Aylmerton.

I welcome the report because it gives the House an opportunity to consider these vital matters and help formulate judgment upon them before the Government arrive at any decision in Maastricht. I must immediately say that I was a little surprised that the report spent so much time in justifying the previous decisions reached by the Select Committee. It seemed to me that in reproducing the Luxembourg text and alongside it the opinions of previous sessions of the sub-committee, there was an assumption that the Select Committee on the European Communities must have some kind of sequential history. I do not believe that that is the right way to proceed. Every committee, whose members change from time to time, should have the opportunity in the light of changing circumstances to reach its own conclusions, whatever its predecessors may have decided. Having said that, I found the report most valuable and the evidence and deliberations most helpful.

I must protect the Council of Ministers. It is responsible because it is the only final authority which, as the noble Lord, Lord Beloff, said, with legitimacy makes various changes to the treaty. There were the Hanover and Strasbourg meetings and the Dublin inter-governmental conference; now there is Maastricht. Each of those inter-governmental conferences resulted in amendments to the treaty, each time, oddly enough, giving more powers to the Commission.

I must absolve the Council of Ministers and therefore Her Majesty's Government from any real responsibility for that because within the terms of the treaty the Council can act only on proposals coming from the Commission. It has no independent right of action at all. So the Council of Ministers is all in a tizzy about what to do at Maastricht on the basis of a series—a whole cascade—of proposals that have proceeded from time to time from the Commission.

As it is described in its recent booklet, the Commission has been the real driving force behind the whole thing. First, one finds that these proposals originated not in the Council. The members of the Council, representing their own countries, have had no electoral pressure from below—or even representations from their own Members of Parliament—to bring forward these alleged improvements to treaties. They have come entirely from the Commission. True enough, they have been amended in consultation if they have sometimes been outrageous. But such is the origin and that is their main characteristic. On examination each new amendment to the treaty—as, for example, the Single European Act—is found always to have some "whereas" at the beginning or some proviso that may be quoted in the next step forward that the Commission desires to be made.

The final common characteristic is that in no case prior to amendment to the Treaty of Rome has there been consultation with the public or the agreement of Parliament. In every case the people have been presented with what has already been accomplished —a fait accompli—and Parliament has been invited to ratify a treaty that has already been agreed in its name by the Government without any kind of consent beforehand.

So the Commission is the driving force. Indeed, over the years that is what the Commission has been doing. I do not wish to minimise the activities of the Commission although, in his last speech to the European Parliament the noble Lord, Lord Jenkins of Hillhead (Mr. Roy Jenkins as he then was), somewhat summarily described the attitude of the Commission in administering the EC as running the Common Market and a few peripherals. I should not wish to go so far.

The Commission has been responsible for bringing forward proposals on harmonisation. There was a disastrous proposal about the standardisation of the sausage, a little later a ripple (shall I say?) over the standardisation of ice-cream and last week a terrific argument about the colour of tomato paste and what shade of red should ultimately be decided for circulation within the Community. Those may appear to be frivolous matters, which they truly are. But progress has been made in the harmonisation of company law; and measures have been taken and much time spent in apportioning the contributions that the Community receives from member states and reallocating them in the form of regional aid or as part of the Social Fund. I have no doubt that those have been admirable opportunities which have occupied a good deal of time. They have also occupied a good deal of paper. Your Lordships will be interested to know that in 1990 no fewer than 539 directives, regulations and directions were issued to the parliaments of the various member states. They were literally submerged, as are the sub-committees from time to time, under a deluge of paper.

Those are all admirable activities. However, unfortunately proper accounts were not kept. If the Commission wish to do something constructive at present in the best traditions of Government and Opposition, it could account for the money that it has received and spent. Year after year it is criticised by the Court of Auditors. Year after year it ignores such criticism. Even last year it still could not produce satisfactory accounts for the Community as a whole.

What has been the principal activity of the commissioners? It has been to increase their own powers. That has been the main drive behind all the activities of the Commission. In this House we are familiar with the best practices as exemplified in the series, "Yes, Minister". It is very easily accomplished. The Commission issues its various proposals to the Council. There is a sea of them. At the same time it issues them to the COREPER, the Committee of Permanent Representatives which sits permanently in Brussels. It meets on an informal basis not only together but with members of the Commission. It is COREPER's duty to prepare for the next Council meeting and, if possible, to arrive at a consensus. That it invariably does. Therefore when the Council members meet, whether it be ECOFIN, or whatever, there is a ready made series of proposals to which their consent is invited and which has already been agreed by all the principal civil servants involved in the Commission, COREPER and the Council secretariat. We reach a situation where the civil servants run the show.

I could not agree more with the noble Lord, Lord Beloff. Every member of the Council has his own ministerial responsibilities at home. Sometimes they are very onerous. Over the past few weeks we have seen how zealously ordinary Ministers behave in the conduct of their departments. It is common knowledge that when Ministers attend the Council meetings the first time they look at their papers is on the plane. They cannot possibly assimilate the detail that has already been worked out in COREPER. That is why we are now progressively becoming ruled by an unelected bureaucracy.

I have no particular comment to offer on individual members of the Commission. I am well aware that the European Parliament has the right to dismiss the lot of them. That is a very illusory power because that would make no difference to the function of the Commission. There are 23 directorates in the European Commission each headed by a civil servant. Quite a number of them would probably welcome the departure of the Commission members, who very often commit them to matters with which they may not be, entirely in agreement. That constitutes the drive towards rule by bureaucracy.

We have to make up our minds whether we should go further along that road. There are some who complain that unless we do, unless we are zealous Europeans, we shall be catching the second-class train, or that we shall be part of a two-tier Europe. Most of the people who talk in such terms have a vested interest in the further extension of economic monetary union and of political union. The large City interests, in particular banks and financial institutions, and large corporate bodies would love it. They can move anywhere they wish in Europe. They can do exactly as they wish and will not be subject to any particular democratic control. Of course they say that otherwise we should be in a two-tier Europe.

I venture to think that that is bordering on nonsense. There is already a two-tier Europe. For example, there is a group of states which obeys European law and carries it out to the letter. The leader of that group is the British Government. There are others who do not give a hang for such law, in particular Italy, at the bottom end, with several gradations in between. There is already a two-tier Europe.

Even in financial terms there is a two-tier Europe. There are those who pay into the Community funds and those who take. Britain and Germany are among those who provide the money for the remainder to take. They are in the second class, but they have been giving first-class service. Could we therefore have a little less of this two-tier myth that somehow if we do not put ourselves under the control of the bureaucracy, if we do not concur with the increase in their powers over democratically elected governments, we shall be inferior citizens? I do not believe that that is right.

I wish to get the Government off the hook if I can. The Government have divisions in their own party; indeed we have in ours. But the noble Lord is a Member of the Government and it is the Government to which I wish to address myself. Is there any real reason why the Government should compromise at Maastricht on any of their principles for the sake of being known as, or thought to be, good Europeans? It is quite ridiculous. If the Government have principles, and I presume they have—I feel very charitable today towards the Government—why do they not stand up for them? Why do they not decline to enter into any fight? Why do they not say, for example, that they will not submit to any control of their expenditure, or their fiscal or budgetary policy by the European Community? We have always understood in the popular press, and, yea, even unto The Times, that the Government were quite adamant that they would not surrender any financial control over their own finances. We have been told that repeatedly.

I have a specific question to ask the noble Lord. For greater convenience I gave him notice of it before the debate. I observed that it was stated in the Telegraph—which does not originate in Walworth Road—on 9th July: Mr. Lamont … yesterday agreed to submit Budget plans for taxation and expenditure to an annual EC 'star chamber' of Finance Ministers responsible for bringing the 12 disparate national economies into line". That sounds suspiciously like a surrender of budgetary authority. Even more recent is an article in the Financial Times of 8th October. It is stated that at a prior meeting: EC ministers discussed the degree of budget discipline needed to bolster a single currency. … On the table were … A ratio of national debt to GDP of not more than 60 per cent. An annual budget deficit amounting to more than 3 per cent. of GDP. An annual budget deficit exceeding its capital investment". The concluding paragraph of the article stated: None the less, Mr. Lamont's active participation in the debate led Mr. Christophersen", who is the budget commissioner, to comment that 'the British are clearly in their minds deep in the final stages of Emu". I do not believe everything that I read in the press, although from time to time I incline towards the Telegraph and The Times. I shall be glad to have the Government's specific undertaking that under no account will they surrender any governmental exercise of budgetary powers, subject to the approval of their own Parliament.

I am well aware that what I have said today may be regarded by some as being old hat or by others as being the noble Lord in his usual robust manner. That is the expression normally used to avoid making any specific comment about anything that I say. However, I hope that today the noble Earl will take the matter seriously because the electorate most certainly will. There is nothing wrong in believing that democracy in one's own country is most important and that national identity and national power means something. That is the case in particular when one bears in mind not only what was said by the noble Lord, Lord Boyd-Carpenter, about the war but also the fact that we in the United Kingdom, whatever the imperfections, have a long history of active democracy among our people. Most of the continental countries' experience of democracy in its modern form is limited to about 40 years. We have a right to ask the Government to speak and act for Britain before anything else.

6.23 p.m.

Lord Monson

My Lords, I too wish to thank my noble and learned friend Lord Oliver for the clarity with which he introduced this excellent report. I apologise for the fact that I shall deal only with a few selected features. Although I was certain that, as always, the report would be well written and well presented, I confess that I began to read it with a heavy heart. On past precedent I expected that the general thrust would be in favour of acquiescence in, even if not necessarily enthusiasm for, still further erosions of the right of national self-determination, subject only to minor reservation about means rather than ends.

It was a gratifying surprise to find myself in broad agreement with almost every speech made today. It was also a gratifying surprise to detect in the report signs at least of seeming consensus—if not quite of actual Euro-scepticism—that things are moving too fast and, above all, too far. My final feeling was one of slight dejection because, albeit in strict accordance with its brief, the committee confined itself to questions of how, when and, occasionally, if. Now that the framework for the single market is firmly in place—that is, the single market from which we may expect economic benefits to flow to all consumers throughout the Community, even if not to the extent that the optimists imagine—the most important question is no longer how, when or even if. The most important question is: why? Why is it automatically assumed by so many people that the curious and ill-defined goal—that is, ever-closer unity—is self-evidently desirable? What is so desirable about unity, fusion, conformity, harmonisation for the sake of harmonisation? In what way do those goals accord with human nature as we know it? In what way do they contribute to the sum of human happiness, to the limited extent that government actions have any influence in that sphere? What is wrong with nations, whether acting individually or through the agency of a supra-national organisation such as the EC, following the old injunction, "Mind your own business", as every well brought-up adult has been taught?

One would have thought that the old maxim, "Live and let live", within the minimum requirements of a just and democratic society, is far more compatible with the traditions of a liberal democratic western civilisation than is an artificial and doctrinaire unity. An artificial unity certainly does not prevent conflict, as I am sure the noble Lord, Lord Beloff, will confirm. Perhaps one may—perhaps paradoxically given its provenance—repeat Chairman Mao's exhortation, "Let a thousand flowers bloom".

I do not extol variety simply for the sake of variety as a counter slogan to calls for harmonisation for the sake of harmonisation. The argument goes far deeper than that. In a thoughtful and powerful article in The Times on 3rd October Dr. Conor Cruise O'Brien pointed out: nationalism goes back to the roots of our Judaeo-Hellenic civilisation". He went on to point out that when members of a nation begin to feel that they are being pushed around by foreigners the result will not be harmony, friendship or tolerance but rather xenophobia.

The Government have promised that the word "federalism" will be resisted to the last. With respect to the noble Lord, Lord Boyd-Carpenter, the British people are not interested in words but in deeds. As was pointed out by the Institute of Directors in its evidence to the committee (page 42), European federalism has already taken root whether officially described as such or not. The Institute of Directors expresses fears that: a federal structure could degenerate into a unitary European state". I must tell the institute that in far too many respects such degeneration has already occurred.

It has never been explained satisfactorily why a Labour Government of the late 1970s effectively gave Greece, Denmark, Spain and other countries, whose shores are hundreds of miles from our own, control over the purity of our drinking water; especially since not one Greek, Dane or Spaniard in ten thousand gives a damn about the quality of our drinking water. As usual a handful of zealous ideologues in Brussels pulled the strings. What in essence has resulted from the acceptance of that directive is that the British people have been ordered to spend their own money, whether through higher taxation or higher water rates and charges, to improve the quality of their water by people who have no personal interest in the matter whatever. According to public opinion polls members of the general public approve of that because, naive and gullible as they are, they fondly imagine that the EC is paying for the improvements out of its own capacious pockets. Little do they realise that they will have to pay the extremely hefty bills.

But since May 1979 the record of the Conservatives has been far worse. Why have they condoned interference by the Community in such purely domestic matters as the hygiene of food sold only within the United Kingdom, the weights and measures of food and drink sold only in the United Kingdom, the shooting of magpies and similar pests, road safety, the size, shape and layout of new taxis, the type of paint to be applied to the exterior of historic houses? We now hear that the Germans intend to prevent us from adopting Sunday trading. Above all, why do the Government condone interference in our domestic planning decisions? As has already been mentioned, albeit after the stable door is well and truly closed, the Prime Minister has rightly been complaining vigorously in Harare. This interference may cause delays which could cost the people of this country millions of pounds.

In answer to that rhetorical question it seems to me that the inescapable reality is that there are large numbers of zealots on the Continent who sincerely subscribe to the view that Britain belongs just as much to the French, Germans and Spaniards as to the British. In fairness they also believe that Germany belongs as much to the British, French and Spaniards as it does to the Germans, and so on. They are fully entitled to that view; but the overwhelming majority of people in this country totally reject it, and I hope the Government will make that clear without equivocation to the Continentals who take that line.

In many respects the proud historic nations of western Europe now have less control over their domestic affairs than do Alberta, Tasmania, Idaho or Rhode Island. That is why I submit that the EC is already going far beyond mere federalism and is rushing towards a centralised unitary state, even if the outward trappings of ostensible national independence remain in place for the time being.

From that it follows that the Select Committee must be on dangerous ground when it urges the Government to yield to the Community over what the committee describes at para. 97 of its report as "minor delimitation of boundaries", for the appetite of zealous ideologues grows with the feeding. Far from the EC's powers being extended, those national governments which value their traditions and independence—and we accept that many countries on the Continent do not take a particular pride in their independence, particularly those which are 19th century creations—should start claiming back their rights, certainly in those matters which have no cross-border implications.

Apart from securing a reasonably level playing field for the single market—it is quite unnecessary for the playing, field to be as flat as a championship billiard table—what are the legitimate, as opposed to bogus, concerns of the Community as a whole? I submit that they are relatively few in number: pollution of the seas and the oceans; large scale pollution of the air; drug smuggling; terrorism; large scale Mafia-type organised crime; mass immigration and asylum seeking; serious contagious diseases, which nowadays are mainly diseases of animals—foot and mouth, rabies and so on—because apart from tropical diseases most human contagious diseases have disappeared; and cross-border consumer protection in, for example, timeshare and the peddling of other dubious investments. Almost everything else should revert to the competence of national parliaments. There is no case for giving the Community the right to dictate matters in the fields of health, education, research and development, tourism or "culture", whatever the latter may mean in this context.

Unless and until purely internal matters revert to national parliaments, there should be no question of extending the fields in which qualified majority voting in the Council of Ministers can be exercised, particularly as the ostensible safeguard of requiring a 71 per cent. vote in favour before change can be effected is not quite the safeguard it seems.

Because of the weighting in favour of the smaller countries, a situation could arise in which—and I use pre-Gelman unification figures—the vital interests of 119 mil ion people (in other words, 37 per cent. of the Community's population) can be outvoted by the representatives of the other 63 per cent.

It may be said that that imbalance is not totally unfair. That may be so though I would argue otherwise. But it must surely be agreed that there is an unfair imbalance in the European Parliament. As I have said on previous occasions, in the European Parliament Britain can be outvoted on a matter affecting its vital interests by a coalition of other countries whose total populations are less than 53 per cent. of ours. Therefore, there is no case for any extension of the parliament's legislative powers until that is rectified. I am glad to see that at page 46 of the evidence Mr. Alan Tyrell wholeheartedly agrees with me on that point.

As regards the parliament's powers of scrutiny, there may well be a good case for widening those powers, but not in the field of initiating or vetoing legislation.

Looking at the visible balance of trade figures, it is obvious that the United Kingdom holds most of the cards at Maastricht. The pro-federalist countries need us far mare than we need them. Therefore, I agree with the noble Lord, Lord Bruce of Donington, that the Prime Minister should politely but firmly make it clear at Maastricht to the pro-federalists and the secret enthusiasts for a unitary super-state that we decline to hand over any more of our powers to the EC; but that subject 10 the single market proceeding to plan, there is no objection at all to those countries which lack pride in their own statehood—for example, 80 per cent. of Italians despise their own government and would much rather be ruled from Brussels than from Rome—forming a closer association or amalgamating with one another, provided that those of us, which would include the United Kingdom, France (whatever the French may say at present) Denmark, Portugal and probably Spain, who are proud of our nationhood, are permitted to retain it unsullied. Mr. Norman Tebbit made an interesting suggestion on those lines in the Sunday Telegraph two or three weeks ago.

I conclude by referring to a remarkable article in the Independent on October 14th by the noble Lord, Lord Rees-Mogg, who I am sorry is not here this evening. I do not believe that anyone would claim that the noble Lord, Lord Rees-Mogg, still less the Independent, is in any way anti-European, either in the correct sense or the more restricted incorrect sense used by pro-federalists. What did the noble Lord write? Among other things, he wrote: A Brussels-based federation would … resemble a tall ship with too much sail and too little ballast, a candidate for capsizing. Only if the European system is built on loyalties that already exist will the system be stable. President de Gaulle was right. The concept of l'Europe des patries is not just preferable; it is the only viable concept". He went on to say: The good Europeans now are those who want to build a European Community of independent nations, as broad as possible in terms of its membership, defined only by European culture and open in its trade with the rest of the world". To that, one can only utter a heartfelt "hear, hear".

6.38 p.m.

Baroness Elles

My Lords, I thank the noble and learned Lord, Lord Oliver of Aylmerton, for his chairmanship and helpful introduction to this report. I should also like to associate myself with the thanks for the invaluable work of the legal adviser and clerks to the committee who enabled the report to be produced in such an excellent manner. It has clearly aroused a great deal of discussion this evening.

It has been a difficult operation to carry out this report because, in the first place, as the noble and learned Lord pointed out, it is not usual for parliaments to discuss documents which are part of the negotiations for a treaty. It was, so to speak, by default that the Luxembourg version of the treaty was let loose on the European Parliament. It gradually found its way to the Select Committee in the House of Lords which enabled it to be seen and members of the Select Committee on the European Communities to realise that Sub-Committee E would have a real task in being able to give an opinion on the legal effects of the draft as it stood.

The operation was further complicated by the fact that there were two versions. There was the version in April—the Luxembourg draft treaty—and a further version which appeared in June. That was at the time when Sub-Committee E was drawing its conclusions to an end. Consequently, it has not been easy for the sub-committee to draw up such a report. I repeat, therefore, that I am extremely grateful for the help we received from the clerks and the legal advisers to enable such a comprehensive report to be produced. I pause to add that there was a slight fear when the Dutch presidency produced a third version. There was general relief when that third version was withdrawn and is no longer the subject of discussion.

Underlying the texts which we have had before us there appear to be at least two main causes of tension. First, the three institutions involved in the Community law-making process—the Council, the Commission and the European Parliament—are all worried. The Council is anxious to retain its existing powers and the other two seek to increase their powers.

A second cause for tension derives from the conflict between those who seek, eventually if not now, a federal solution to the European Community and those who wish to retain such powers as remain to member states. Many noble Lords emphasised how far down the road the member states have gone. A large majority in the European Parliament support the federal goal—I add that I was not one of those when I was a member—and consequently favour the Commission as the eventual government in a federal structure, with the European Parliament and Council as a bicameral legislative body. It is therefore not surprising to note the tendency in the draft treaty to seek to give further decision-making powers to the Commission and increase the role of the European Parliament in the legislative process. That underlines the direction towards a federal system as originally envisaged in the structure of the Community.

The view of the Committee, which I fully share, is that it is more appropriate to consider the law-making process on its merits, to examine whether it conforms with democratic principles of openness and consultation, than to seek a determined conclusion on the future shape of the European Community. One of the difficulties is that one feels rather like the person who was asked the way to Connemara who replied, "Of course, if I was going there I wouldn't start from here". That applies to many of the problems with which we are faced in analysing the law-making process in the Community and its results.

In parenthesis, for those who are afraid of a federal solution it should be observed, as was touched on by the noble Lord, Lord Monson, that some aspects of European Community law remove the law-making powers from member states on a number of issues that are not within the law-making competence of the federal government in relation to individual states in the United States; the recent second banking directive, rights and establishment of lawyers and a common base for VAT are a few examples.

I should like to comment on two or three specific issues discussed in the report without going through the whole of it. An analysis of the provisions of the draft text on co-decision shows that the consultation procedure thereby introduced would unnecessarily delay the legislative process. Should there fail to be agreement, the proposed legislation would fall, as has already been pointed out. The European Parliament would again be granted merely a negative power, whereas the co-operation procedure which was introduced in the Single European Act in July 1987 has worked rather better than was originally envisaged or as many people feared. The European Parliament made a positive contribution to European Community law to the extent that 45 per cent. of amendments were accepted—these figures are up to December 1990—on first reading by the Council of Ministers and 25 per cent. on second reading. Although that is quantitative and not qualitative, it gives an impression of the contribution that the European Parliament can make to the law-making process.

I was saddened to hear the somewhat derogatory remarks of my noble friend Lord Beloff, who does not seem to be aware of the valuable work that the European Parliament is able to do from time to time. Whether the representatives from the United Kingdom step on a plane to Strasbourg or Brussels does not make much difference. They do so in order to represent the interests of the United Kingdom, whichever party they come from.

I should like to make a point in view of the kind of remarks aroused by the European Parliament. The representatives spend at least 120 nights outside the United Kingdom on duties designed to enable them to look after not only the interests of the country but also their electorate. As in the United States where there are large numbers of electors within a constituency, it is possible to receive a considerable number of letters from one's electorate, as I know myself having been a member of the European Parliament. For example, I was away for one week and on my return to the United Kingdom found 400 letters on my table regarding the culling of baby seals. That may not appear to be an important matter to many people but it was obviously important to my electorate. That meant 400 replies to explain why I did not vote in the way they wanted and involved a considerable amount of work. It is the duty of a MEP, as it is the duty of a Member of Parliament, to answer all letters from his electorate. That is sometimes not made known to the public in general and I take the opportunity of saying that we should be grateful to those members from this country who attend the European Parliament. Perhaps, without being too chauvinistic, I can repeat comments from other member states: that it is the British representatives of both parties who are the best attenders and contributors to the work of the parliament.

Having said that, it appears to be a question of extending the co-operation procedure to a greater number of areas where the European Parliament was formerly only consulted; in other words, though amendments were tabled to proposals, they were often ignored. That opens up the involvement of the European Parliament in some areas where there is not even consultation. Extension of the powers of the European Parliament to the granting of the assent procedure in all cases of international agreements, or perhaps as a modified version for minor agreements, would remove the valid objection to the present situation of the provisions of Article 113 of the treaty dealing with external commercial policy. That is an important policy both in relation to the Community as a whole and to the United Kingdom, particularly where there is no democratic consultation. Therefore, if the parliament was seized of the matter at least both the issues and the subject matter and conclusions of the treaty would be made known to people who may be affected by the legislation before it came into force.

I am happy to find myself in agreement with the noble Lord, Lord Monson, which may surprise him. I quote again from page 46 of the written evidence. I entirely agree also with the conclusions of my former colleague of the European Parliament, Alan Tyrell, when he said, the European Parliament, though steadily growing in weight and responsibility, is not yet ready to take sole legislative authority". There are various reasons for that—the volatile attendance at committees, the volatile attendance in the plenary sessions and, above all, the fact that there is not yet a single seat. That is not the fault of the parliament; it has been pressing for many years for a single seat. It is governments which have not been able to come to a unanimous decision in accordance with the treaty. However, the parliament is seizing the matter and taking it into its own hands. It is hoped that there will be meetings in Brussels in a building near to the parliament which will be able to provide for plenary sessions.

The current legislative process to be extended in accordance with the draft treaty provisions gives considerable powers to the Commission in the drafting and adoption of secondary legislation, much of which goes completely unscrutinised by any democratic process except by government officials. Although government officials may come to a conclusion in the advisory committees, the Commission does not have to take the opinion of the advisory committees though there may be a majority of members against the proposal.

The proposed extension of competences to the Community raises the fundamental question of adequate scrutiny as well as the removal of further areas of competence from national parliaments. As the economies of the Twelve become more closely integrated it is almost inevitable that new legislation will be required at Community level. But that should be at the unanimous request of the member states. The present definition contained in the draft treaty, which has been referred to by many noble Lords, on the application of the principle of subsidiarity, would have a contrary effect; a place which gives the originating power to the Community.

It is suggested that some form of wording should be contained in the preamble along the lines of the 10th amendment of the United States' constitution which states: Powers not delegated to the United States by Constitul ion, nor prohibited by it to the State are reserved to the States". Something along those lines should be included in a draft treaty which is adopted at Maastricht. If it should be agreed that further competences should be allocated to the Community and that the practice of qualified majority vote be increased there will be further justification for the accusation of a democratic deficit in the law-making process, because the Minister, while he has lost the vote cannot be fully accountable to the Parliament even though he may have represented his country at that vote. It will be essential for new and efficient structures, or an adaptation of existing structures, to be established between relevant committees of national parliaments and the European Parliament both to allow full discussion of legislative proposals and for the public, above all, to be able to be aware of future legislation and the shape it is taking in the process of being adopted.

From my own experiences as a former Member of the European Parliament I know that is one of the areas where an enormous number of questions were asked, particularly by industry, business, and by manufacturers. The question was constantly put: "What is going to happen with this directive?". Everything was kept secret, apart for a short period during which it appeared before the European Parliament. But even while we were discussing papers in the European Parliament we knew full well that there were Government officials in the process of coreper who were making their own negotiations and arrangements. It was very difficult as an elected member of a parliament, whichever view one takes of that parliament, if you are not able to say what is happening on a particular draft directive or regulation because so much of the practice of the Community takes place in private and in secret.

That is one of the reasons why the Commission, which after all is the drafter of legislation as well as being a guardian of the implementation and enforcement of the laws of the European Community, has become the focus of lobbying on an ever-increasing scale. The Commission itself is comprised of very able, efficient and competent officials. The Commission has an extremely open process and the officials are very willing to give information. But it is not the role of an non-elected body to be lobbied in order to take sides or to take views on draft legislation.

It is clear that my noble friend the Minister will probably be unable to give detailed replies to the kind of comments we have been making today since the Government are in the process of negotiating on behalf of this country at Maastricht. However, I am sure that my noble friend Lord Caithness will take very great care to study what has been said today. I conclude by wishing the Government well in the negotiations and in bringing them to a satisfactory conclusion for the United Kingdom.

6.56 p.m.

Lord Stoddart of Swindon

My Lords, this has been an interesting and well-informed debate and somewhat surprising in that support for a point of view which I have held for a long while has come from some unexpected quarters. The noble and learned Lord, Lord Oliver, need not apologise for discussing this matter in his committee and for bringing forward its recommendations. In fact, the committee has done us a service; indeed, it was fortunate to have been able to do this service and bring out the full implications of what is proposed for the summit at Maastricht.

I should like to thank the sub-committee for its report, especially where it expresses opposition to measures which would stimulate the present regime of creeping federalism to a full-blown rush towards western European super-statism. I particularly welcome the recommendation against the proposal for co-decision between the Council and the European Parliament not only because, as the Select Committee envisages, it would lead to disputes between the two bodies but, more importantly, because it would give a huge boost to the powers and importance of the European Parliament and a reduction, therefore, in the powers and influence of the national parliaments with a consequent boost to the creation of a centrally controlled super-state.

I very much regret the credence given by the Select Committee to the concept of union citizenship. Again, this lends support to those who wish to see individual states subsumed into a western European state. The very idea of being a citizen of Europe—a continent —appalls me. Can one imagine a Japanese person, an Indian person, or a Pakistan person agreeing to become a citizen of Asia? I was born a citizen of the United Kingdom and that is how I want to die, whenever that may be. I do not want to be a citizen of a continent. I want to be a citizen of a nation of which I am proud. So I am sorry that credence should have been given to the idea of substituting the nationality of a person to some "being" on a large continent.

I should say that I also fundamentally disagree with the committee in its support for the proposal to give the European Court the power to fine member states. How will that work? It would be unprecedented in history that a state a nation—could be fined by some outside body or some internal body, for that matter. Who is going to enforce the fine? How is it to be collected if the state says it is not going to pay? Are we going to have the new European army marching through the tunnel to arrest the Prime Minister or the Queen? How is it possible to impose such a fine on a state or nation? Let us suppose that Parliament—which I presume will still raise the money—says, "We are not going to pay the fine". Will all 650 Members of the House of Commons be arrested? Of course not. It is absurd that this should even be suggested and I sincerely hope that it will not be proceeded with.

The Select Committee's overall view seems to be that the extension of Community competence is acceptable provided its achievement is by evolutionary means. That seems to me to mean that everything is acceptable, including the sacrifice of control by Britain over economic and monetary policy, taxation, defence, and foreign affairs, provided it does not come about too soon. I disagree profoundly with that. I believe that it is fundamentally wrong in that it would tend to conceal from the people the full extent of their loss of the capacity to govern themselves in the future. That approach plays into the hands of the Euro-federalist fanatics since it has been their policy all along to conceal their real objectives behind a wall of untruth and misinformation and to obtain their objectives by concealment and stealth.

It happened in 1972, during the passage through both Houses of the European Communities Act, when Parliament and the country were assured that there was no possibility of a loss of sovereignty and certainly no possibility of the formation of a federal state or anything like it. Again, in 1985 we were assured when the Single European Act was going through both Houses of Parliament that union did not mean union. My noble friend Lord Bruce of Donington and I opposed the Bill from the Opposition Front Bench. My noble friend will know as well as I do that time and again we were told that the preamble to the Single European Act did not really mean what it said and that union did not actually mean union. But now we find that it really did mean union.

My noble friend Lord Bruce and I warned of the dangers of the Single European Act. Those warnings were reinforced by the powerful and expert voice of the noble and learned Lord, Lord Denning, by the noble Lords, Lord Moran and Lord Monson, and indeed by other noble Lords. We tried, because we wanted to be helpful, to warn the then Prime Minister, Mrs. Thatcher, of the decision-making she was surrendering to the EC. However, in spite of that and in the face of the fine fight put up by a handful of Conservative and Labour MPs who had the guts, commitment and intelligence to acquaint themselves with the full implications of the provisions of the Act, it was forced through the House of Commons, despite the opposition of the official Opposition, on a guillotine, just as was its predecessor, the European Communities Act 1972. Thus, the people had no say and these wide-ranging and important Acts were forced through without proper discussion by Parliament or anyone else.

It seems that we are in the apology-making season. However, if Mrs. Thatcher has any apology to make, it ought not to be to some snivelling TV tycoon because he did not get his franchise, but to this Parliament and the people for her failure to understand the real implications of the Single European Act and for turning a deaf ear to all the warnings issued to her that she was leading the country further down the federalist path. However, it is interesting that in paragraph 93 of its report the Select Committee, with hindsight, now agrees that Article 100A is being used too widely. In fact it is being misused. It is a great pity that many people did not understand that right at the beginning. I must not be too hard on Mrs. Thatcher.

Lord Monkswell

Why not, my Lords?

Lord Stoddart of Swindon

My Lords, I shall tell the House why not. A year ago the poor lady was stabbed in the back by the Tory Party and only last week she was stabbed in the back by a TV tycoon to whom she had written a letter of solace. I do not think that we should be too hard on her. She has had a bad time just lately. In any event she has repented. She now understands what the whole thing is all about. I hope that she will now assist in the battles ahead to prevent any further erosion of British sovereignty.

Lord Bruce of Donington

My Lords, I am grateful to my noble friend for allowing me to intervene. Does he also recall that during the proceedings in this House on the Single European Act we were repeatedly assured from the Government Front Bench that the right of veto by the United Kingdom would remain untouched?

Lord Stoddart of Swindon

Yes, indeed, we were, but we know that the Ministers did not understand the implications of the Act. I feel quite sure that they were not seeking to mislead the House and therefore we must assume that they did not understand that the British veto was being removed. That was most unfortunate.

We must not overlook the fact that Ministers and their civil servants often give away powers by their own edict. They make agreements in secret but, unfortunately, those agreements sometimes come back to haunt them. One such haunting occurred last week, on an issue referred to by the noble Lord, Lord Boyd-Carpenter. The Environment Commissioner told Her Majesty's Government to halt work on seven important projects which have absolutely nothing to do with the EC. How on earth can this commissioner pretend that the redevelopment of King's Cross station or the extension of the M.3 have a real EC interest?

I find it most offensive that some Italian bureaucrat should seek to issue instructions to a properly and democratically elected British Government that they should stop work on projects which are vital for Britain's well-being and which have been through all the democratic procedures laid down by our planning laws. If Signor Carlo Ripa Di Meana is so concerned with matters environmental, perhaps he can turn his attention to Italy, where his fellow countrymen slaughter millions of birds every year and, indeed, seem to have a policy of shooting anything that moves to satisly their bloodthirsty hunting appetites.

I have already said that the Select Committee concedes too much to the federalists and that it has too easily accepted that further amendments to the treaty are necessary. There has certainly been no call from the people or Parliament for any such revisions. All the pressure is coming from our so-called partners who, I am afraid, so often sound more like our enemies than our friends and seem to enjoy embarrassing the British whenever the opportunity arises. The evidence of the frenetic desire of other member states to gallop towards federal union was contained in the Dutch proposals which were published after the committee reported. Apparently they have now toned down their demands but the very fact that those extreme proposals saw the light of day shows that some countries of the EC want to go in for the formation of a West European state, come what may.

The proposals that are to be discussed at Maastricht will be very far reaching indeed. They will probably be a precursor to even more erosion of our sovereignty. The people of this country will not have been consulted in any way. We are told that referenda are alien to our constitutional process and that the best place for these matters to be discussed and decided is in Parliament itself. But, unfortunately, experience thus far has shown that the decisions are taken not on the basis of freedom but of whipped votes on a guillotine Motion. Therefore, it is essential that at this point Members of Parliament of all political parties, and indeed of none, should combine to ensure that before further erosions of our sovereignty are embarked upon the people of this country are consulted in a wide, properly conducted, fair and properly financed referendum. That is the only legitimacy that can be given to any further loss of our self-governing powers. I sincerely hope that the Government will consider the matter and reconsider their opposition to such a referendum.

7.11 p.m.

Lord Harmar-Nicholls

My Lords, I was surprised to learn from the noble and learned Lord, Lord Oliver, that it was unusual to have this sort of debate on a report while negotiations were still taking place. That was something I did not know. Therefore, if by accident we are doing so now, I hope that, by accident, we have started what will become the usual case in the future. If Members of either House can make any contribution in terms of letting the Government know what is the general feeling through their contact with constituencies, that ought to be put into use before the negotiations have been completed. That is what is happening today. As I said, I was surprised to learn that it was not usual, but I hope that we are treading on a path which will become normal procedure in the future.

The noble Lord, Lord Stoddart of Swindon, finished his speech by making a great appeal for a referendum. To me it was always nonsense that when we had a referendum on the Common Market it took place after we had signed up and joined and when there was nothing anyone could do about it. It seemed to me to be a complete waste of effort, other than to give a sort of smokescreen of legitimacy to what the Government had done when they perhaps had doubts as to whether or not they were representing the real views of the people.

The noble Lord, Lord Jay, and I battled hard for many years, long before any signatures were given. We pointed out the weaknesses as we saw them in the Treaty of Rome. They were pretty obvious, but many of them, especially those concerning the common agricultural policy, have come home to roost. What a pity that that warning was not taken fully into account before the signing and the referendum on that occasion. It was very important. Some of us felt strongly as to whether we should proceed with the Treaty of Rome long before it reached the signing stage.

I was normally ambitious and had taken some trouble to become a parliamentary candidate. This happened in 1938. I fought several elections to be elected in 1950. To my joy and, I suppose, to my satisfaction I had only been in the other place for four years when I was made a junior Minister. Despite all that effort I resigned from that office because I thought that the issues which would flow from the Treaty of Rome were dangerous enough and big enough for me to do so—whatever my personal ambitions might have been. I believe that a debate such as this, trying to make a contribution before the document is signed, sealed and delivered, is a sensible way of dealing with important matters.

The report of the noble and learned Lord, Lord Oliver, is the best to have come from Sub-Committee E in terms of facing up to the facts as the majority of people see them. I hope that the Government will pay a great deal of attention to it and will base any negotiations on the knowledge which the report provides.

However, having said that, the noble and learned Lord said, in terms of the negotiations and the future, that provided we are bargaining from equal bargaining positions he could see some hope that we could perhaps, even now, arrive at a point which would be beneficial to Europe and to this country. I am only concerned about it being for the benefit of this country. There are many issues on the table regarding problems surrounding the EC where I can see that, if one looked at it as a theory, what is being suggested would be good for Europe. However, when I look at it again and discover that being good for Europe will mean that it will be pretty detrimental, in my view, to Britain, I do not think that that is something about which we should start cheering.

If we can get to a point where we have a settled line which is fair and in the interests of Britain as well as Europe, then we can go ahead. We have not yet reached that position. I do not think that it is possible to achieve equal bargaining positions with the European Twelve as it now is.

Having opposed the Treaty of Rome and having been very critical of many parts of it after it had been signed, I thought that if one wished to be so critical one had better find out what it was all about, or at least as much as one could. Therefore, although I had had my fill of having to fight elections, I put myself forward and was elected to the European Parliament.

The message I bring back from that parliament is one of which I hope the Government will take heed and which I believe to be very well based. The reason we must not go further along the road now being set out (and the reason I support the noble Lord, Lord Monson, in what he said about us having gone too far too fast) is that the one ingredient essential for the theory of the EC to work and which is absolutely vital is not there: the affinity between the 12 nations does not exist. There is a definite, deeply felt difference which has nothing to do with logic or with many of the theories which were put forward and argued in the report. But it is vital if the EC as we see it is to be capable of replacing to any great extent the job that our present home Parliament carries out.

I believe that we were misled—partly deliberately —in those years by people who were what the noble Lord, Lord Bruce of Donington, called "European fanatics". In order to get the legislation through they said things and promised things that gave assurance to people who had not dug as deeply as some of us had tried to do.

The question just put during the intervention of the noble Lord, Lord Bruce of Donington, is relevant: why have we allowed the power of the veto to be removed? When we were offering sound criticisms about the dangers which would flow from the theory put in front of us, we were told, "We've got the veto. It is there. It can't happen. We don't want it to". But we have moved away from that. All down the line we have seen that the safeguards which we were told were there and which, therefore, made nonsense of some of our criticisms have been allowed to be removed. They are there no longer.

The Government will be going into important, detailed negotiations in Maastricht. We know that they have reached a certain point. The only thing we can do today is to hope that they will take into account the overriding feeling that has been expressed during this short debate. I have heard no enthusiasm at all for moving further along the road which removes the power from the Westminster Parliament to somewhere else. There has been no sign of it. That fact ought to be taken into account.

We must also be careful that we are not being outmanoeuvred. This game of national, and certainly international, politics is surrounded by manoeuvres.

We must bring home the message that there is no question of federation being included in any of the decisions that are taken. We must be certain that although the word may not be included neither is its meaning. One of Europe's top legal experts has been charged with a nearly impossible task: the elimination of the dreaded word "federation" from the new Common Market treaty. He has allowed himself to be quoted. He refuses to have his name mentioned but he has not denied the quotation: If at the end of the negotiations on political union, it is quite clear that the word federal is not acceptable to some delegations, we have to think of ways of improving the text MPs have this feeling of belonging to a sovereign body which is threatened by the powers of the Community … Britain genuinely was sovereign until so recently … If 'federal' is to be excised, something equally ambitious must be found in its place". It is not good enough to remove the word but to retain the intention which it contained.

I give my noble friend another warning to pass on. It may sound cynical and melodramatic, but I wonder how genuine is the Dutch proposal and its withdrawal. I wonder whether it was ever believed that the Dutch proposal, with its federalist approach, would be accepted. In the event it was turned down by 10 votes to two. Your Lordships may call me cynical but one is aware that similar things happened in regard to matters of equal importance. They resulted in war. I wonder whether the Dutch proposal was included to make the Luxemburg proposal, upon which they had to fall back, appear more respectable. It is rather like the chap who put his foot out of the warm bed so as to have the joy of feeling the warmth when he brought it back in again.

Those who believe in federation—there are some who do and they are entitled to—are likely to gain if that happens. We talk about sovereignty, but many people have never had a parliament with the sovereignty that our Parliament has enjoyed which has been built up over the centuries. That is why we are sometimes looked upon as the odd man out.

Let us consider what was said about the single currency. I was looking at this matter the other day and I found it interesting. Belgium said, "Oh yes, we believe in it". Denmark said, "Yes, but you have to be tough about the convergence criteria". Germany said, "Yes, put be tough on the convergence criteria". Greece said, "Yes, but little hope of joining this century". Spain said, "Yes, but we want more cohesion money". They want the cash. Ireland says the same, "Yes, but we want cohesion money". That is not a level playing field.

Ireland provides a good example. I am fond of Ireland. I have friends with businesses there. Ireland is being financed by European money to an unbelievable level. When the principle of a single currency is brought up Ireland says, "Yes, we will have that, provided we receive the cohesion money that makes it worth while". I am not making those points out of cynicism but out of a true belief. It is because I believe that we have moved away from the principles to which we said we would stick when we first joined the Community that we must give the Government, and in particular the Prime Minister, who will be the main negotiator, the message that we expect him to stand by what he has said. He has spoken clearly. He must not be beguiled by the reaction to what he said about style. People were always unfair when they spoke about Mrs. Thatcher's megaphone diplomacy. She was supposed to have spoken truculently. It was not how she said it but what she said that mattered.

We have a new Prime Minister who recognised that megaphone diplomacy had become unpopular, effective though the arguments behind it were. He should not be led astray by having his back slapped for having adopted a more persuasive attitude. He is thought to be a kind chap, a good fellow, who is interested in cricket and therefore works only in accordance with the highest principles. We want him to be tough, whether he talks loudly or softly, when he is looking after this country's interests.

I ask that the message given by my noble friend Lord Whitelaw last Wednesday during the defence debate is taken into account when this matter is considered. I use his words: There is therefore time for reflection by the Government. I hope, therefore, that there will not blow up … an obstinate determination to cling to the present plans whatever the changes i n circumstances."—[Official Report, 16/10/91; col. 1130.] He finished by saying that he hoped that the opportunity would be taken to change the plans if there was good reason to do so. Previous plans have not passed the test. We were promised an economic partnership, and all sorts of extreme political manoeuvres which would rob Britain of its independence have been foisted upon us. I hope that that fact is recognised and that my noble friend's words will be taken into account and acted upon by the Government at Maastricht.

7.28 p.m.

Lord Monkswell

My Lords, I am sorry that I was not present at the start of the debate. I had intended to take part but, having arrived late, I thought that I would not bother as there seemed to be enough people speaking. However, having listened to a few speakers I felt compelled to contribute. First, I thank the committee for producing an interesting and useful report. I was asked a couple of years ago whether I was for or against Europe. I replied that that was an irrelevant question; that it was not a question of whether I was for or against Europe but rather whether we should work with the people of Europe to develop democracy and to achieve positive results. That is one of the main reasons why I am contributing to the debate.

Let me give two practical examples of how we can work together. First, there is water, which was mentioned by the noble Lord, Lord Monson. I was curious as to why he was against European standards of clean water. It seems to me that we all hope that the water which we are given to drink and the water which we bathe in when we go to the seaside is clean. Whoever draws up the standards and however they are extended across nations and continents, we hope that the standards will be high.

Lord Monson

My Lords, the noble Lord asked me a question so perhaps I may reply. At any time during the past 50 years the British people, if they had so chosen, could have voted in a government who had promised to spend more taxpayers' or water rate payers' money on cleaner water. The fact that they did not choose to vote in such a government indicates that they are quite happy with the situation.

Lord Monkswell

My Lords, I take the noble Lord's point, although I am not sure I agree with it.

The noble Lord asked why the people of Greece should be interested in the standard of British water. One reason I can think of is that there is far more travel across Europe now than in the past. People who live in Greece or Denmark can quite easily visit this country and vice versa. When we travel in Europe we hope that the tap water we drink is of a high quality. We have a vested interest right across Europe in high standards. I hope that there will be common standards of, dare I say it, environmental quality for water, air and other things.

Having agreed that that is a desirable aim because of the movement of people, one is faced with the ultimate decision on how to arrive at common standards and how they should be implemented. It seems to me logical, partly because we are used to it and accept it as good, to devise democratic mechanisms whereby we can agree among ourselves on the standards we wish to see and implement enforcement regimes which are common under a democratic procedure. I put it to your Lordships that that is what we are trying to do with the evolving political structures of Europe.

Another useful example is ice-cream; interestingly, it has been in the news recently. I gather that during the war the production of ice-cream was banned so for a number of years people had no experience of it. When production resumed it was not real ice-cream but a mass produced product which did not include much cream because there was not much around just after the war. The product was sold as ice-cream and people became used to it.

Then a young research chemist devised the injection of air into ice-cream and we had plastic ice-cream filled with air. It is unfortunate that children have grown up over the past few years without the opportunity of consuming real ice-cream. They have been given an adulterated product that has been messed about. It is interesting that it was Margaret Thatcher who was involved in blowing air into ice-cream. She was responsible not only for reducing the amount of ice-cream that children enjoy but reducing the amount of milk they were given in schools. That seems to run right through her history. If the EC can bring in standards so that British children are given proper, decent, wholesome ice-cream, three cheers for the European Community.

As concerns democracy, I agree that we do not need a federal state to achieve that. But all we have at the moment, as I see it, is the European Community and we have to consider how to develop it in a democratic way. One or two people have a curious attitude to democracy. The noble Lord, Lord Beloff, was not sure whether he wanted us to talk about "citizens" or "subjects".

Lord Beloff

My Lords, if the noble Lord comes in late and takes up time when we are waiting to hear the official responses of the political parties he might at least refer correctly to what was said. I never mentioned "citizens" or "subjects" in my speech, as he will see if he reads Hansard tomorrow. He ought not to behave in this way but let us get on with the serious debate in which we were engaged.

Lord Monkswell

My Lords, I apologise to the noble Lord but I was here for his speech and thought I heard him hesitate in mentioning "citizens" and "subjects". But I shall take his word for it and read Hansard tomorrow. The point I was trying to make is this. My concept of democracy is the ability of people to work together—not one group of people telling another what to do.

Another issue raised is where the European Parliament should meet. That is an interesting point. We need to bear in mind that over the past few years the European Community has grown. With the changes that have taken place in central and Eastern Europe, there is every likelihood of the European Community growing even more. I wonder whether we should think of alternative sites for meetings of the European Parliament. Strasbourg or Brussels could be too far to the west if we consider central and Eastern Europe being included within a wider European Community. We may have to think in terms of Warsaw or Budapest as the natural seat of the European Parliament. I hesitate to mention Berlin; there has been one attempt this century to use that city and no one found it satisfactory so the idea was abandoned.

Finally, I am concerned about concentration on the nation state as the sole expression of democracy. We do ourselves a disservice and we do the strength of our own local democracy, local government, a disservice by that. We must be more relaxed when we think in terms of democracy. We need local and national institutions of democracy; we need continental systems of democracy. Eventually I hope that we could aspire to a world system of democracy which would make the world a better place. That is why I hope that we shall make progress in building on the admittedly imperfect democratic mechanisms within the European Community. We should aim to make them better and not argue that we should do away with them altogether.

7.40 p.m.

Baroness Robson of Kiddington

My Lords, I had the privilege of being a Member of the sub-committee that produced this report. As most noble Lords have done, I too wish to thank the noble and learned Lord, Lord Oliver of Aylmerton, for chairing the sub-committee. I join the noble Baroness, Lady Elles, in thanking our legal adviser for his role in producing the report with such enormous speed and so efficiently.

Many noble Lords have said that it is unusual to study proposals which have not yet been formalised or decided upon. It has become apparent during this afternoon that there is tremendous concern about these proposals among Members of your Lordships' House. That concern has been shown by the number of speakers who have taken part in this debate on a Monday afternoon the day before Prorogation.

Before I highlight a number of areas in the report, I must refer to the fact that the noble Lord, Lord Boyd-Carpenter, said that the concept of Europe only became possible as a result of Britain's action in the war. I agree 100 per cent. with that statement. I was not born in this country and I learnt more about Britain in the period during the war than I have ever learnt since. I remember vividly travelling from Tring to work in the Ministry of Information in 1940, the day after France fell. I entered the train compartment to find the usual five or six people I travelled with. Not being a British person I was deeply depressed at the state of affairs that then persisted and I wondered what would happen. The other people in the compartment said, "Thank God we are on our own. We now know what we can do". I felt enormous admiration for the British resilience and for their belief in themselves.

I feel it is a pity that, having led Europe back to freedom during the war, we opted out once the war ended. We did not attend the Messina Conference and we did not think it was worth while taking part in discussions aimed at achieving an ever closer union in Europe. That thinking applied to both political parties after the war. It is a pity that we did not maintain that wartime spirit.

The noble Lord, Lord Stoddart of Swindon, has said that he values his UK citizenship, as we all do. The noble Lord said he did not want to be a citizen of Europe and that he was born a UK citizen and wished to remain that way. I agree with that sentiment. I was not born a UK citizen but I have been one since 1940. I want to remain a UK citizen. However, people who are born in Scotland, Wales or Ireland will declare that they are Scottish, Welsh or Irish respectively as well as being UK citizens. I claim that we can be UK citizens and also citizens of the European Community. The Name analogy applies in both cases.

Lord Stoddart of Swindon

My Lords, I simply do not agree with that sentiment because Scotland and Wales have been nations in their own right for a long period of time. The point I was making is that nationhood makes a person feel that he belongs somewhere, whereas a continent does not convey that feeling of belonging. That is the point I was making. I am happy to be a citizen of Europe in the wider sense and I want more co-operation with Europe. However, I hoc e the noble Baroness now understands how I feel about being a United Kingdom citizen.

Baroness Robson of Kiddington

My Lords, I feel the same way about being a United Kingdom citizen, but that does not prevent me from also wanting to belong to a greater Europe. The report considers the most important aspect of the matters raised by the Luxemburg document concerning co-decision between the European Parliament and the Council. The proposal is based on the assumption that the European Parliament is more democratic than the Council. I do not believe that that is the case. Apart from the lack of transparency of the Council's deliberations—that situation could be improved upon and does not have to remain the way it is—both the Council and the European Parliament are democratically legitimate bodies. The co-operation procedure introduced in the Single European Act has enabled bodies monitoring and seeking to influence Community legislation to make their views known not only to Ministers but to others exercising legislative powers.

The proposal for co-decision between the Council and the Parliament, with neither party having the final say, would undoubtedly lead to prolonged wrangles and often to a state of affairs where no decision is taken. It is possible that the most desirable legislation would not be implemented because of lack of agreement. How many organisations where co-decision is involved have no final arbiter? We cannot accept, therefore, the co-decision proposal.

It is a pity that this proposal appeared so quickly after, mother change to the system—the introduction of the co-operation procedure. That procedure has only been functioning for four years and it needs to run for a longer period before it can be fully assessed. Another problem to be confronted is that of the working conditions in the European Parliament. That matter was mentioned by the noble Baroness, Lady Elles, and deserves the most urgent attention of member states. The European Parliament must be empowered to make its own decisions on that matter before we even consider giving it new powers or procedures.

The sub-committee received evidence from Mr. Alan Tyrell, who said, Parliament is in no position to carry the responsibility for legislation whilst it is segregated from its staff, its files and the other Institutions, and only has the use of its rented building one week in four". He pleads for the European Parliament to be able, to decide where it should meet and where its secretariat should be located". That problem is not new and has been raised year in and year out. The working conditions of the parliament is one of the most important matters that must be decided at Maastricht.

A further matter of great importance to all the countries in the European Community concerns the principle of subsidiarity. The noble and learned Lord, Lord Oliver of Aylmerton, has recounted how the sub-committee came to the conclusion that subsidiarity as a principle should be added to the objectives in the preamble to the EC treaty. It should be the guiding principle in all legislation and the principle should be based on an understanding that Community action should be taken only when it is necessary to achieve a specific objective. It is essential that subsidiarity remains a political principle which should influence all the legislative processes in the Community. The responsibility for the definition of subsidiarity should lie with legislators and not with judges.

The next item is the extension of qualified majority voting. It is agreed that that is necessary when a large number of decisions have to be implemented within a limited time. It is being used to complete the internal market. In the case of financial decisions such as the budget, the CAP and commercial policy, qualified majority voting has been used and agreed upon. However, we must guard against further extension of qualified majority voting in case it comes to be used purely to speed up decisions. It can often prevent true criticism being voiced and the resolution of differences between nations.

Qualified majority voting should not be used solely as a process for speeding up decisions where there are major differences within the Community. If used in that way it can disregard the democratic process. Although qualified majority voting has its place, it is essential that it is not extended in such a way as to remove the possibility of questioning and in some cases slowing down decision-making where that might be necessary to enable people and nations to think carefully about the next step towards closer unity.

I have listened to all the speeches that have been made—except for one when I disappeared for a few moments. As a dedicated European, but not so dedicated that I cannot see the pitfalls, I have been saddened by the number of speeches which were not in favour of the Community. There appeared to be a feeling in the House that we have got into this situation, we have agreed to certain things but we do not want to go any further. As a European I feel that if we went into Europe purely for economic advantage and for no other reason we should not have done so. I hope that the impression that I gained is not representative of this House.

7.54 p.m.

Lord Cledwyn of Penrhos

My Lords, the Select Committee on the European Communities has, under the chairmanship of my noble friend Lady Serota and her predecessors, produced many important reports since it was first established some years ago. Those reports are appreciated both in this country and abroad.

The report we are debating today is of truly critical significance because it deals with the development of the democratic process in the Community, with the powers of the European Parliament, the Council and the Commission and their relationship with national parliaments, including our own. It goes to the heart of the problem which many people in this country are discussing; namely, the extent to which the powers of our own Parliament will be affected if the proposals currently under discussion are passed and implemented.

This excellent report, for which we are much indebted to the noble and learned Lord, Lord Oliver, and the noble Lords who sat with him on the committee, recognises and analyses that in paragraph 12. It also helps us to clarify our minds about the structure and powers of the European Community at a crucial moment in its development. For that reason it is immensely valuable to all of us and especially to the Government.

In the impressive speeches we have heard in this debate—and I tend to agree with the noble Baroness that there was some lack of balance—noble Lords have dealt with the main issues in the report. My comments will therefore be brief, bearing in mind also the debate which is to follow.

The House will recall that we had a debate nearly 12 months ago, on 22nd November 1990, upon the report of the committee under the chairmanship of the noble Lord, Lord Aldington. At that time, as my noble friend Lord Stoddart has reminded us, Mrs. Thatcher had just resigned as Prime Minister and Mr. John Major had assumed the office. Noble Lords will recall that Mrs. Thatcher held and still holds very firm views on the amount of power which Britain should concede. I remember that she argued very strongly that monetary union in the form of a single currency would detract substantially from the sovereignty of this country. That caused a division in the Government at that time and a great deal of debate. It would be helpful if the noble Earl, Lord Caithness, would explain the Government's present attitude when he winds up the debate.

The report deals very sensibly with the issue of co-decision and concludes that the concept as between the Council of Ministers and the European Parliament is "inherently unsound". In referring to that issue the noble and learned Lord summarised the report cogently and clearly in his excellent speech. We are grateful to him for that.

The report argues that the concept contains a fundamental flaw because if the Council and the Parliament disagree on a text neither has the last word. There could thus be endless argument between them and that is clearly undesirable. We know what happens when this House and the other place are in disagreement. In the past that has had profound constitutional consequences. That must be avoided at all costs in the development of the European Parliament and the Council.

We—the Labour Party as a whole—think that there is a strong case for giving the European Parliament powers to initiate legislation and for it to have some form of co-decision with the Council. That would obviously need further thought but it is worthy of consideration and I should value the noble Earl's reaction.

Further, on the important question of subsidiarity, which has been mentioned in most speeches, we note that in paragraphs 90 to 92 the report favours including the principle in the preamble to the treaty only. Here again is a strong argument for at least stating the principle formally in the treaty with clear references to the areas in which it should apply. There is, of course, the question of finding a clear definition of subsidiarity, and I should appreciate the noble Earl's views. The report gives a good definition of subsidiarity and I shall be grateful if the noble Earl will tell us whether the Government accept that interpretation on that important point. Otherwise we could well find ourselves in very deep water, as the noble and learned Lord has indicated.

The area of which the House will wish to take special note is the possible extension of EC competence. That is dealt with on page 21 and in Articles 2 and 3 of the treaty on the union. That also deserves our very careful attention, as the noble and learned Lord suggested in his speech. We must understand that conferring important new tasks upon the Community would remove legislative power from this Parliament and others. The new tasks are listed in paragraph 58 of the report. Noble Lords will have noted that they are extensive and of central importance, including energy, the environment, consumer protection, economic and monetary union, and so on.

Noble Lords have referred to an area which needs to be handled very carefully, as the European environment commissioner's letter to the Secretary of State for Transport, Mr. Malcolm Rifkind, last week illustrates. Noble Lords have referred to that point. The commissioner alleged that Britain had violated an EC law requiring detailed environmental assessment of construction projects. A number of roads, including the Twyford Down scheme, are objected to as well as projects such as a soft drink manufacturing plant in Northampton.

Those matters must be clarified carefully not only in the interests of Parliament but in the interests of the people of this country. I am worried about those matters. We have noted the criticism in some quarters and I hope that the Minister will let us know the Government's views and what action they propose to take. I should also be grateful if he would tell us precisely how the procedures work. Do inspectors from Brussels investigate every project in detail, and are there discussions between them, the construction companies, local authorities and Government representatives which give an early indication that objections will follow?

As the House knows, we on this side are not averse to amending existing co-operation procedures to include, for example, social matters, but we recognise the real difficulties that will inevitably arise when clashes occur between the actions of the British Government and the Commission. However, it must be said that Britain has a good record when it comes to observing European Community directives and laws including environmental directives. This cannot, regrettably, be said of other countries. The Commissioner, Signor di Meana, could have handled the matter rather more carefully against that background.

Perhaps I may now turn to the future framework of the treaty, bearing in mind that the implication of the draft political union treaty is that the member states remain independent and sovereign. This again is a sensitive area and is dealt with on pages 33 and 34 of the report. Any further moves towards the diminution of independence or sovereignty and towards federation would, as I understand it, require another treaty.

Much confusion, irritation and argument has arisen over the past few years because of a failure to agree upon the meaning of certain crucial words; for example, sovereignty and subsidiarity are two that I mentioned earlier. Federalism is another, as the noble Lord, Lord Boyd-Carpenter, said. The noble and learned Lord, Lord Oliver of Aylmerton, and his colleagues have been helpful in seeking to define those words, as in the case of federalism on page 9 of their report. As they say—this point is of interest—some countries in the Community would regard Britain as a federation if there was devolution to Scotland and Wales, whereas constitutionalists in this country would not go so far. Incidentally, we should ponder carefully the interesting and thoughtful remarks of the noble Lord, Lord Beloff, on federalism and the weaknesses of certain aspects of Community administration as he sees it at present.

Common foreign and defence policy is another area where clarity of definition is essential, as otherwise we may find ourselves at odds with France and Germany. All of us in this House agree that a policy of "Europe goes it alone regardless of NATO" is not acceptable. France can contemplate that without difficulty because France is not a member of NATO, but this country's long and close association with the United States makes it unthinkable that we could sever or wantonly damage that relationship. Let me put it plainly, as did the noble Lord, Lord Boyd-Carpenter: if it w, Tire not for the United States as our ally, there might well have been no democracy and no individual freedom in Europe or Asia during the past 45 years. I say that with the utmost respect to all our partners in the Community.

Of course, there have been profound changes in Europe and NATO must adapt to that, and Europe, for its part, must assume more responsibility for its own defences. However, uncertainties in the world make it essential that there should be a close relationship between the two, based properly on the Western European Union, and that there should be open and public debate on this matter. That has been lacking over the last two years or so.

Finally, the report could not appear at a more convenient moment as the 12 European Community leaders prepare for the Maastricht summit. They have a huge task before them. The reaction to the Dutch draft treaty on political union showed that. I wish the Prime Minister well in his task and I hope that he will take this report, well-thumbed, with him to Maastricht. There is a change in Government attitudes. That is indeed necessary because it would be fatal if Britain became marginalised in relation to decision-making in Europe. On the other hand, the implications and complexity of the work that lies ahead calls for a measured approach and a willingness to listen to Parliament and to the people of this country. This valuable report assists us in that direction.

8.5 p.m.

The Minister of State, Foreign and Commonwealth Office (The Earl of Caithness)

My Lords, this has been, as one would have expected of such a subject at such a time, a most stimulating debate. That is partly due to the range of views expressed and the cogency, clarity and commitment with which noble Lords on all sides of the House have made their case. But it is also due, despite the difficulties mentioned by my noble friend Lady Elles, to the quality of the report before us from the Select Committee on the European Communities. I too should like to thank the noble and learned Lord, Lord Oliver of Aylmerton, and the members of the Committee for the excellent work that they have done. I can assure the House that my right honourable friends the Prime Minister and the Secretary of State will read today's debate with care and interest.

This report on law-making procedures is only the latest in a series of valuable and informative documents produced by the Committee spanning the Community's development through the Single European Act and beyond. Their report on political union and economic and monetary union published in October last year was a particularly valuable and timely introduction to the negotiations then about to commence, even though the Government did not agree with all the report's conclusions.

This latest report comes at an equally critical moment and belies its limiting subtitle in the depth and scope of its analysis of the political union debate. It is a most valuable contribution to the debate, clearly argued and thankfully lacking in the emotive responses which have in the past tended to make discussion more rather than less difficult. I particularly welcome the clear exposition of the notions of sovereignty and federalism which preface the body of the report. I agree with my noble friend Lord Boyd-Carpenter that the word "federalism" is inappropriate in an international treaty. That point was echoed by a number of your Lordships. I only hope that such clear-minded, objective thinking will also inform debate elsewhere.

The range and depth of our debate today, and even more so of the negotiations between member states in the IGC, show that there is still a great deal to resolve and time to reflect before a treaty acceptable to all can be agreed at the Maastricht European Council in December. We want an agreement, and believe it is in Britain's and Europe's interests to achieve one; but not on any terms. No doubt some members states wish to move towards federation, as my noble friend Lord Harmar-Nicholls suggests, but I must tell my noble friend that the Community will march in step or not at all. The Prime Minister will simply not sign a treaty which he does not feel he can commend to Parliament. Our partners should have no illusions about that. Of course, we are negotiating constructively, but the detail matters.

There is a daunting agenda of substantial problems which we have yet to resolve. They include: powers of the European Parliament, both legislative and non-legislative; extensions of Community competence, whether extension of existing practice, or bringing substantial new policy areas within the treaty; whether or not to extend the use of qualified majority voting and, if so, in which areas; a major debate about the extent to which the Community should legislate on social policy; how to give effect to the principle of subsidiarity, which all agree should in principle apply to Community activity; how to make the Community institutions more effective and efficient, and to strengthen the rule of law; and, how to involve national parliaments more closely in the work of the Community—a substantial agenda in a short period of time.

The Committee's report, while focusing on the concept of co-decision and the law-making procedures of the Community, also offers views on all these difficult and contentious issues. Your Lordships have likewise raised these central points during the course of our debate, and I should like to respond to some of the questions asked.

The noble Lord, Lord Jay, referred to the existence of a democratic deficit in the Community. The committee's report rehearses succinctly the argument that legislation enacted as a result of a decision taken in the Council by qualified majority voting lacks democratic legitimacy, which should be restored by incorporating a greater role for the European Parliament into such decision-making. The noble Lord will be pleased to hear that we remain unconvinced by that argument.

The use of qualified majority voting in the council cannot blithely be equated with the loss of democratic legitimacy. National parliaments exert considerable influence on the debate leading to qualified majority voting decisions, and whatever the voting arrangements, decisions taken by representatives of 12 member states will inevitably involve compromises, great and small.

While on the point of qualified majority voting, I am reminded that the noble Lord, Lord Monson, spoke on what he considered the detrimental influence of other countries' views on the United Kingdom as a result of qualified majority voting. Yet he did not balance that with the influence of the United Kingdom on other countries. Perhaps the single market, which is of such benefit to us, is the best example of something which would not have been agreed without qualified majority voting.

My noble friend Lady Elles raised the special case of a supposed democratic deficit in trade matters under the treaty, Article 113. I cannot accept her view. As she will know, the Article 113 committee appointed by the Council of Ministers maintains a very close watch on progress in negotiating the international trade agreements to which she referred. As the noble Lord, Lord Jay, and the noble Baroness, Lady Robson, remarked, the democratic legitimacy of the Community rests on both the Council and the European Parliament, on the responsibility of members of the Council to national parliaments and on the directly elected representative character of the European Parliament. In our view, both those expressions should be reinforced and the links between them strengthened.

There is a tendency in discussing the role of the European Parliament to dwell exclusively on its powers to legislate. But, as we know, that is not the only role of the European Parliament or indeed of any other parliament. In the IGC we have suggested ways in which the European Parliament can play a greater role in scrutinising the activity of the Commission in two important areas. The noble Lord, Lord Bruce of Donington, will be pleased to know that ensuring financial probity is one of the areas in which we seek to strengthen the powers of Parliament to scrutinise the Commission. The other area which will commend itself to the noble and learned Lord, Lord Wilberforce, will be monitoring the way in which the Community's commitments are honoured throughout the member states—something that is lacking at the moment. Those are important tasks which the European Parliament could perform more effectively, although I listened with care to the case made by the noble and learned Lord for a separate compliance agency.

There are a number of other less headline-grabbing proposals for enhancing the European Parliament's role in the non-legislative sphere, which we can support. Taken together, those measures add up to a significant enhancement of the powers and responsibilities of the European Parliament. They are not powers for taking decisions or for making laws and may therefore disappoint European parliamentarians; but they are the meat and drink of parliamentary government, the checks and balances on policy makers and policy implementers which are at the heart of any democratic system. They are the foundation on which Westminster has been built.

Let me now turn to the legislative powers of the European Parliament, which are the focus of the committee's wide-ranging report and our debate today. In the heat of a complex negotiation which I hope is now nearing its conclusion, it is easy to lose the necessary sense of perspective. Let us be clear that, despite the strongly argued case of my noble friend Lord Beloff for the parliament being no more than a figment of our imagination, the European Parliament has developed gradually over the years to play an ever more important role in Community affairs.

The Single European Act of 1987 substantially increased its role, notably in the legislative sphere, with the introduction of the co-operation procedure. We tend to agree with the feelings of the committee that the co-operation procedure itself is only now bedding down into the structure of the Community and we wonder whether we or the parliament are ready for a further step change in its legislative role so soon after the last one. In practice the parliament already has considerable influence over Community legislation in many fields.

The noble Lord, Lord Cledwyn of Penrhos, stated that his party's policy was to give the right to the European Parliament to introduce legislation. We do not go that far but we do not rule out some change in the arrangements for the European Parliament's involvement in legislation. However, we wish to avoid too great a shift in the institutional balance at a time when the Community needs to be strong, stable and ready to face the challenges elsewhere in Europe. We believe that that is a view shared by the committee. Indeed the committee concluded, as the noble and learned Lord, Lord Oliver of Aylmerton, reminded us earlier, that the concept of co-decision between the Council and the European Parliament is inherently unsound.

My noble friend Lady Elles endorsed the point made by the committee that instead of co-decision it favours extending the involvement of the European Parliament in Community law-making through further extension of the co-operation procedure. We recognise the force of that argument. The cooperaijon procedure was introduced under the Single European Act in association with qualified majority voting for measures designed to implement the single market. To extend the use of the co-operation procedure to other areas where qualified majority voting applies, on the face of things would be less of an upheaval in present procedures than the introduction of substantial new powers.

However, that is not a positive argument in its favour. There are large areas of decision-making by qualified majority voting where it would be impractical to employ the co-operation procedure. I think n particular of the many measures taken under the common agricultural policy where the involvement of the European Parliament would inevitably cause delay. Therefore we are not convinced that any significant areas exist in which it would be beneficial now to extend the co-operation procedure.

A number of noble Lords raised the matter of national parliamentary scrutiny. In the United Kingdom all Commission proposals are subjected to parliamentary scrutiny. That is true of a number of other member states, notably Denmark, but by no means all. While we do not suggest that all member states should adopt procedures identical to our own, we consider it desirable that national parliaments should be involved in the scrutiny of Commission proposals in all member states. Those who complain of a democratic deficit in the Community might usefully examine their own procedures and fill the gaps that in some cases exist closer to home.

In recent months we have heard much about the structure of any union. The noble and learned Lord, Lord Oliver of Aylmerton, spent some time on this matter earlier in our debate. This is not a theological discussion. It is a very real question about the extent of Community competence. The debate is between those who want all common activities of the 12 to come within a unitary structure, that is, under the Treaty of Rome, and those who wish to maintain distinct areas of co-operation outside the treaty. Some have likened the latter approach to the architecture of the temple with its separate pillars of co-operation holding up an overarching pediment: the European Council. Others see all co-operation falling under the Treaty of Rome: branches of the co-operation growing from the same trunk, if one likes. That would effectively make all co-operation between member states justifiable with a greater role for the European Court of Justice and the European Parliament.

That is unacceptable and I know that the noble Lord, Lord Stoddart of Swindon, will support us on that. It was the approach adopted in the recent Netherlands presidency draft text tabled in the IGC in September and subsequently withdrawn. We and others argued instead for an approach with some areas under the Treaty of Rome but maintaining common foreign and security policy and interior and justice co-operation outside the treaty and outside Community competence on an inter-governmental basis. That follows the Single European Act structure and maintains the diversity of forms of European co-operation. We do not agree that co-operation on an inter-governmental basis rather than under the Treaty of Rome is any the less European for that.

The Presidency's draft text of 18th June, on which basis negotiations are now proceeding, follows the pillared approach, which is good. But it also contains references in the sections on CFSP and interior/justice co-operation which link them to the Treaty of Rome. These blur the distinction we wish to maintain and, in our view, carry the danger of extending Community competence, Community rules and ECJ jurisdiction into these areas, in spite of our desire to exclude them. That desire is reflected in the conclusions of the Luxembourg European Council which agreed that there should be, procedures appropriate to the requirements of the various spheres of action". We wish to see those procedures kept distinct.

The key underlying issue—and I stress that—is one of Community competence. It is that which we have to get right, among other issues, if the Government are going to be able to commend a final treaty to the House.

I mentioned two areas which we wish to maintain on an inter-governmental basis. One is the nexus of interior and justice matters with cross-border implications which need to be tackled at the European Council: immigration, asylum, police co-operation and combating international crime and the drugs trade. These are areas where clearly a greater degree of co-operation across Europe would be helpful. We want that as much as others do. But to attempt to squeeze that co-operation too into the Community competence would not in our view be acceptable at this stage of the Community's development.

I would advance similar arguments with regard to the policies of our European partners in the foreign policy and security fields. Like the committee and like a number of noble Lords, we find difficulty with the concept of a CFSP within Community competence. We want a stronger CFSP and have made proposals to bring that about. However—and the noble Lord, Lord Bruce of Donington, can be reassured—we will not accept a CFSP which falls within Community competence. Foreign policy must remain a subject for inter-governmental co-operation. We see no argument for extending the role of the Commission or the European Parliament in this field. Nor should the European Court of Justice have jurisdiction in the CFSP.

It is clearly right that we should make Europe a greater force in world affairs for the promotion of the values that we share together with our partners. It would be wrong if the effect of the procedures and obligations we devise is to slow down our decision making and create disunity among us. That is why in the debate on the CFSP we have consistently made the case for retaining consensus as the basis for decision making. Most recently it has proved its worth in our common approach to events in the Soviet Union and Yugoslavia. Introducing mechanisms such as majority voting would weaken, rather than strengthen, Europe's voice. Where a common will exists, so will a common policy. There is no substitute for that.

The noble Lord, Lord Cledwyn of Penrhos asked specifically about the question of subsidiarity. If—and indeed it is a big "if"—a satisfactory definition can be obtained, it should be in the treaty text itself. We like the definition in the report. We have to get others to agree to that too.

The noble Lord, Lord Bruce of Donington, specifically asked about the question of economic and monetary union. I can reaffirm to him, as I have done before when wearing a different hat, that the IGC is not negotiating on whether the Community should adopt a single currency now. Any decision will be a long way down that road. Our participation in the negotiations has been and will continue to be constructive. We have put forward our own ideas and views throughout in order to help ensure that whatever emerges is workable. But we have made it clear that the United Kingdom cannot accept a treaty which binds us to move to a single currency without a separate decision by the United Kingdom Parliament and the Government.

My noble friend Lord Boyd-Carpenter first raised the question of Commissioner Ripa de Meana's Article 169 letter, as did other noble Lords. I know the commissioner well from my time as a Minister with responsibility for the environment. I emphasised to him then as I emphasise to him today that the UK is second to none in the thoroughness with which we consider the effects of major projects. We wholly reject the Commission's implication that the United Kingdom is failing to consider environmental matters. Indeed my right honourable friend the Prime Minister today said that it was an astonishing intervention.

The noble Lord, Lord Stoddart of Swindon, raised the question of a referendum before Parliament made up its mind on the matters of the IGC. We do not think that a referendum is either necessary or appropriate. As the noble Lord will recall, the 1975 referendum on Europe was a political expedient by the then Labour Government. It is not a precedent that we find attractive. Any treaty on European union which may be agreed at Maastricht will indeed cover a host of issues rather than a single issue. That is a major factor to be borne in mind. In that case it is surely the job of Parliament to weigh those matters and to decide.

Those are the views which inform our settled policy. The Community is not, and cannot be, a static organisation. Its very nature as a uniquely close alliance between 12 member states means that the Community must be a flexible and adaptable association if it is to flourish in a changing world. The prospect of further enlargement will place additional strain on the Community's ability to adapt. In reply to the noble Lord, Lord Jay, we wholeheartedly support such enlargement of the Community to include other states which wish to join, which meet the economic and political criteria, and which can take on all the responsibility of EC membership. Adapt and develop the Community must, and the outcome of the IGC in December will mark an important new stage in that development. However, I agree with the noble and learned Lord, Lord Oliver of Aylmerton, and the committee that we must beware that the Community's reach does not exceed its grasp. Nobody will thank us for devising and erecting a shining new Community machine only to discover afterwards that the machinery simply does not work. Our vision, as I have described, must be tempered with pragmatism.

Some will argue that our views make us appear reluctant to change. Some would even say that it makes us reluctant Europeans. They are wrong, my Lords. That is not the case. We are deeply committed to British membership of the Community and will work, as we have done in the past, to ensure that the Community brings benefits to all. We do not think that those benefits will derive from realising a federal vision, from filling an imaginary democratic deficit, or from pandering to selective interest groups in individual member states.

What will help is that the Community emerges from this latest round of internal examination more efficient and more effective in what it does, and with the Twelve wholeheartedly committed both to widening and deepening their range of co-operation in practical ways that will benefit all Europeans.

8.28 p.m.

Lord Oliver of Aylmerton

My Lords, in replying to this interesting and instructive debate I first thank noble Lords not only for taking part in it but for their kindness in the compliments that they paid to Sub-Committee E, which are deserved, and to me personally, which are not. I am sure that the noble Lord, Lord Bruce of Donington, will have demonstrated to the House that the committee is not composed 100 per cent. of those devoted slavishly to the institutions of the Community.

I am grateful, as will be the committee, to those noble Lords who have spoken not only for their interesting and in some cases controversial views but for demonstrating in the most practical and convincing manner that the report has succeeded in contributing to the debate by stimulating discussion. That it has done so successfully is due not primarily to the efforts of the committee or its chairman but, as the noble Baronesses, Lady Elles and Lady Robson, so rightly said, to the untiring efforts and constant guidance and hard work of our legal adviser and staff. They produced the first draft at very short notice and guided our wandering footsteps—sometimes wandering in different directions—throughout.

I do not wish to take up time by traversing ground that has already been gone over. Nor would it be appropriate for me to expand upon the reasons for the conclusions in the report. The report stands on its own base, warts and all. In this debate it has provided an opportunity for second, and sometimes perhaps better, thoughts, as in the case of my noble and learned friend Lord Wilberforce in relation to the status of the principle of subsidiarity in the treaty.

I hope that I shall not be considered to be discourteous if I do not reply to all the issues raised. However, out of courtesy I must refer to three specific points made by the noble Lord, Lord Boyd-Carpenter, for whose remarks I am grateful. He referred to the word "federal" in paragraph 130. I agree with his comments. The danger of using such language might be that it is thought to create a commitment. The United Kingdom should not be criticised as being a dinosaur if it regarded that with suspicion. I also agree with the noble Lord's comments on paragraph 134. The Select Committee was conscious of the danger of a creeping transfer of power from the states to the Community. There are two ways in which that can be combatted—the first by definition and the second by uncertainty. The committee considered that that definition was the better way.

The noble Lord asked for an assurance that the committee would look into the action of the European Commissioner in writing to challenge on environmental grounds the proposals relating to rail and road systems. My days as chairman of Sub-Committee E are strictly numbered and I can give no assurance. However, I can assure the noble Lord that at present Sub-Committee F is inquiring into the implementation of environmental measures. It began last week with evidence from the head of the directorate.

I note the points raised by the noble Lord, Lord Stoddart of Swindon, but mention only two. First, united union citizenship is no more than a label. It does not detract from national citizenship but it confers certain privileges as set out on page 42 of the report. Secondly, the noble Lord mentioned the suggested power of the European Court to impose financial penalties. I follow what he said but I do not believe that the committee envisaged the departure of the members of the offending government to some European gaol. The plain fact is that the unevenness of the implementation of measures by different member states within the Community creates problems. That can and does lead to unfairness in trading conditions between member states. I am the first to accept the fact that there may be more than one way to counteract such problems, including the suggestion made by the noble and learned Lord, Lord Wilberforce, of the establishment of an enforcement agency. It is clear that something must be done to counter deliberate and continued breaches of the obligations of the treaty.

In answer to the noble Lord, Lord HarmarNicholls, I say that the unusual aspect is not that the general nature of international proposals should be made the subject matter of debate but that there should be submitted to parliamentary and public scrutiny the actual text of the treaty under discussion.

I have taken up enough of your Lordships' time. I conclude by expressing my satisfaction and that of the Select Committee that the report has prompted the expression of so many stimulating views. If it had done no more it would have succeeded in its purpose. I ask the House not necessarily to accept it, not necessarily to agree with it but, as the Motion asks, to take note of it.

On Question, Motion agreed to.