European Communities (Amendment) Bill

HL Deb 07 June 1993 vol 546 cc544-702

2.56 p.m.

The Lord Privy Seal (Lord Wakeham)

My Lords, I beg to move that the Bill be now read a second time.

Seldom can an eight-clause Bill have stimulated quite so much controversy, quite so many column inches or quite such intense parliamentary scrutiny. The Bill has had an exhaustive examination by another place: indeed, even more exhaustive than the 1972 Bill. During the course of this examination it has grown from three to eight clauses. It has been sent to your Lordships' House with the endorsement of a large majority. And now, a year after the Bill was introduced, it comes finally to your Lordships' House. The number of speakers in today's debate—and tomorrow's—is sufficient testimony of the interest which these issues raise also among your Lordships. Never before, I think, have so many of your Lordships indicated your wish to speak in a Second Reading debate.

In rising to invite your Lordships to give a Second Reading to the Bill, I cannot hope now in my speech to deal with all the questions which have arisen during this lengthy examination—some germane to the Bill, some less so. There will be ample opportunity to address these in the subsequent stages of your Lordships' scrutiny of the Bill, to which I look forward in the confident expectation that they will be marked more by light than heat, and that they will accord fully with the conventions appropriate to our Chamber. What, however, I would like to do today, at the start of our debates, is to try to set those issues in a broad framework, to explain the context of the treaty agreed at Maastricht, and the Bill, and to try to clarify what both mean to this House, to this country, and to the Community as a whole.

Much has happened since December 1991 when the negotiations on the Maastricht Treaty were brought to a successful conclusion—and since the House by a majority of over two to one endorsed that conclusion. The process of ratification of the treaty has proceeded in other member states, and has stimulated in many of them a vigorous debate on the nature of the Community. The EFTA countries have taken steps towards a closer relationship with the Community, and negotiations have started for four of them to become full members. At the same time Western Europe has entered a considerable recession; there has been a difficult period of turbulence on the currency markets and we, along with others, have suspended our membership of the ERM. Finally, the Community has been faced with an international crisis close to home in the former Yugoslavia.

Those developments have inevitably coloured the debate on the treaty itself and on the Bill. They bear out the firm and successful work by the Government, in negotiating the treaty, to remove the federalising and centralising intent of the earlier drafts. Instead, the treaty marked the start of a move towards a new framework for common action and co-operation between the member states—promoting action at a Community level only where it is justified, building new mechanisms for intergovernmental co-operation in other fields, and making more effective the implementation of Community policies.

Your Lordships will be aware that, broadly speaking, the treaty establishes three separate "pillars", or areas of action: first, action on a Community basis—involving, in broadly similar roles as they now have, the institutions of the Community in the decision-making processes which have been established under the Treaty of Rome, the ECSC and Euratom Treaties and the Single European Act. Secondly, action at an intergovernmental level on a common foreign and security policy. This means that the member states will co-operate directly together. The Commission will be present, but without its sole right of initiative and the primary executive role which are a feature of Community action. It is sensible for it to be there since, for example, common foreign and security policy measures may involve sanctions on third countries which bear on economic action for the Community. Other institutions of the Community—such as the Court of Justice—will have no role at all in the common foreign and security policy. Thirdly, action on a similar intergovernmental basis on justice and home affairs.

It is a significant step forward that the treaty reflects the need for this different approach in different policy areas, and specifically recognises that intergovernmental co-operation can, in appropriate circumstances, be just as effective, and just as "European", as Community action under the Treaty of Rome. The treaty establishes the principle that Community action is not a good thing for its own sake. There are areas such as the single market where it is appropriate—and Britain will participate wholeheartedly in these. But there are other areas where we do not need common rules, and common European legislation.

The treaty contains important new safeguards. Article 3b incorporates in Community law the principle of subsidiarity: that the Community is to act only where member states cannot achieve the desired result alone. During the UK presidency significant progress was made in elaborating that principle. At the Edinburgh Council formal procedures and guidelines were agreed for the application of subsidiarity across the whole range of Community action. The Commission has made a start on the examination of legislation which, as it were, fails the subsidiarity test. It has already identified some examples of legislation which should be dropped, and it will present a comprehensive report to the Council this December. There has, in addition, been a dramatic reduction in the volume of new Community legislation in recent months. In 1992 the Commission proposed some 77 pieces of legislation, compared with 145 proposals in 1991. Subsidiarity is already having its effect.

The treaty also strengthens the legal framework of Community action. On the one hand it clarifies the limits of action under the Treaty of Rome. For example, the new articles on culture, health and education expressly exclude the Community from taking "harmonising measures". On the other hand, it strengthens the application of the rule of law and the accountability of Community institutions. The treaty gives the Court new powers to fine member states which fail to comply with its judgments. Similarly, the role of the Court of Auditors, the watchdog of how the Community spends taxpayers' money, is to be enhanced, and the Commission itself will be subjected to greater democratic scrutiny by the European Parliament.

An important element in the Maastricht negotiations was the desire among some member states for a single European currency. But the Government were clear that it would be wrong to commit Britain to joining such a currency. Under the Maastricht Treaty we have the right to decide not just when but whether we wish to join any single currency. We have a full say in how the steps towards such a currency are taken, but we retain our freedom of action.

The treaty makes clear, in terms, that British monetary policy remains a national matter until and unless we decide otherwise. The treaty does not oblige us to rejoin the ERM unless we wish to. My right honourable friends the Prime Minister and the Chancellor of the Exchequer have made clear that the conditions for doing so do not at present exist.

The UK also opted out of the social chapter. Our partners wanted far reaching extensions of what is called the "social dimension" of the Community. We disagreed. The social chapter is thus an agreement of the 11. We believe that, far from helping workers' rights, the social chapter would endanger their jobs. We want a high productivity, high wage economy with good working conditions. But that cannot be legislated into being. It has to be earned—company by company, factory by factory. The social chapter loads costs on to employers and will cost jobs for employees.

Last week our partners were able to pass legislation by qualified majority voting—the working time directive—which would change member states' working practices, and Britain's particularly so. I would underline that this was done under the Single European Act, which this House agreed in 1986. We were able last week to remove the worst features of the working time directive, and so preserved the simple individual liberty for those who wished to work overtime to provide a better standard of living for their families. But such working practices are a matter for each individual member state, not the Community. Nor does the article on which this directive was based give adequate powers for its adoption; the article is about health and safety, and the directive goes far beyond that. We will therefore fight the case in principle in the Court. We were certainly not prepared to see a massive extension of such proposals. Indeed, under Maastricht, as we have signed it, with subsidiarity and the agreement of the 11 it will be easier—not easy but easier—to argue that such measures should not in future be a Community matter.

It may be helpful if at this stage I elaborate a little on what the Bill actually does. The Bill is required because, in order to ratify the treaty, we need to change our domestic legislation so as to give effect in our law to certain parts of the treaty. It is important to keep clear the distinction between the treaty and the Bill—which may seem obvious—but there have been claims, for example, that an amendment to the Bill meant that the treaty was amended, which is not the case.

At the heart of the Bill lies Clause 1(1). This amends the European Communities Act 1972 to add to the treaties listed there the parts of the Maastricht Treaty which relate to the first pillar, with the exception of the protocol on social policy which was omitted following the agreement of another place to an amendment introduced at Report stage.

Clause 1(1) does not make provision for the second and third pillars of the treaty, because those pillars —and this is a rather technical but important distinction—do not give rise to Community rights and obligations. Clause 1(2) of the Bill satisfies the requirement in the 1978 European Parliamentary Elections Act that treaties increasing the powers of the European Parliament should be approved by an Act of Parliament before UK ratification. Clause 1(2) gives a global approval to all three pillars of the treaty, and to all the protocols.

Clause 2 meets the Government's commitment not to seek a move to a single currency and single monetary policy—stage III of economic and monetary union—without the agreement of Parliament. It requires such a move to be approved in advance by an Act of Parliament and also that the Government should report to Parliament on various aspects of economic co-ordination and convergence.

Clauses 3, 4, 5, 6 and 7 were all introduced during the Bill's passage in another place. Clauses 3 and 5 place various requirements on the Government and the Governor of the Bank of England to report to Parliament—including this House—about aspects of economic policy and economic and monetary union. Clause 4 specifies the economic information that the UK should submit to the Commission. Clause 6 means that the UK's representatives on the committee of the regions will have to be elected members of a local authority at the time of their nomination. Finally, Clause 7 requires each House of Parliament to come to a resolution on a notion on the social protocol before the Act comes into force.

We in this country are rightly proud of our parliamentary democracy and loath to see it diminished. Some have suggested that the effect of this Bill is to bring about a substantial transfer of sovereignty to the Community. But in most respects this Bill is less far-reaching than that enabling us to ratify the Single European Act, and certainly less far-reaching than the 1972 Act itself. As I have sought to show, the treaty is about improving the structures for decision-making and about making the Community work more effectively.

Against this background I should like to pick out briefly one issue which stimulated considerable debate in another place and to which I anticipate your Lordships may wish to return. That is the question of a referendum. I am a firm opponent of referenda. I do not believe that they—and the single issue political debates which they involve—have a place in our system of parliamentary democracy. Nor do I think that the practical questions involved in mounting a referendum have satisfactorily been addressed: it is often difficult to isolate the question on which the views of the electorate are sought from other pressing political issues.

Where I think the House will wish to be careful in examining the question—as we doubtless shall in our debates on the Bill—is in distinguishing between principle and opportunity. The treaty is important; but there are a number of other issues on which strong views are held, and on which a case could and would be made for a referendum—the death penalty; the position of the Church of England; even the role of your Lordships' House. Though I certainly respect the views of those who are consistent advocates of referenda, I cannot say that I am any more persuaded of the case for one on this treaty than on any other question. Those who find the arguments attractive in this case might, I suggest, inadvertently contribute to undermining the very system of parliamentary democracy which it is their professed aim to protect.

We should not, in our discussions about the detail of the treaty and the Bill, lose sight of the wider picture. The Community has helped to ensure over 40 years of peace in Western Europe following two horrific wars in the previous 40 years. It has helped to consolidate the transition of Spain, Portugal and Greece from totalitarianism to democracy. It has provided an example to the countries of Eastern Europe of how liberal, market-based democratic nations can voluntarily work together, highlighting the bankruptcy of communism and hastening its collapse.

The Community has brought Britain undoubted economic and commercial benefits. The share of British exports going to the EC has increased from just over a third when we joined to well over half now. Our exports to Germany equal those to Japan and the United States combined, while EC countries now account for eight of our 10 largest export markets. EC membership has also brought us foreign investment. At the end of 1991 we received 41 per cent. of all Japanese investment in the EC and 36 per cent. of American investment. Foreign firms come here because we provide an attractive base for the single market. They add to British jobs and to the nation's prosperity.

The Bill before us allows the Government to ratify the Maastricht Treaty. With the treaty in place we shall be able to make further progress towards the kind of decentralised, open Community that we want. Europe is changing. Popular attitudes have changed, not least in France and Germany. Today's European agenda is not about federalism. It is about making Europe competitive; securing a GATT agreement; stimulating growth and jobs; and building up a single market. It is about bringing new members into the Community and building up trade and other links with Eastern Europe. Those are the practical points which flow from Maastricht. They are good for Europe. They are good for Britain. They reflect our vision of Europe, one that is worth arguing for from a position of strength, shaping the debate and our common future. I commend the Bill to the House. I beg to move.

Moved, That the Bill be now read a second time. —(Lord Wakeham.)

3.12 p.m.

Lord Richard

My Lords, we are all grateful to the noble Lord the Leader of the House for providing the House with an explanation of the Bill and for outlining the Government's latest thinking on the Maastricht Treaty and the process that has led up to it. However, I must say that as a rallying cry for his troops to support the Bill, it was strangely piano. The trumpet seemed somewhat muted, and the tune was just a little uncertain.

It is worth remembering, as the noble Lord reminded us, that the other place spent no less than 204 hours of debate on the Bill. Over 600 amendments were tabled and the Committee stage took no less than 23 days. One must pay tribute to Members of the other place, at least for their stamina and endurance if not exactly for the speed of their decision making. This House has a reputation for compassion and for sensitivity towards the suffering of others. I am sure that many noble Lords, particularly on the Benches opposite, will feel those emotions when they consider the Government's performance throughout the Bill so far.

Let us be clear as to why that is so. It is now 18 months since the Prime Minister came back from Maastricht with the text of this treaty in his pocket. Game, set and match, we were told, and Parliament approved his performance. Let us not forget that at that time the Government's majority in another place was somewhere around 100, but no date for a general election had been set. At that moment, therefore, there was little to prevent a fairly speedy ratification of the treaty. Even allowing for the depth of the division within the Conservative Party at that time—and it has since deepened—there can hardly be much doubt that the parliamentary procedure towards ratification could then have been achieved with relatively little difficulty compared with what has actually happened.

Yet the decision was taken not to proceed quickly. One must ask why that was. Could it have been the result of a mistaken belief that by delaying the process the Government could mollify the sceptics within their own party? Frankly, it is difficult to think of any reasons other than ones connected with the internal divisions within the party opposite.

First, the Government announced that our parliamentary process would not take place until after the Danish referendum. Again, one has to ask why. Perhaps it was believed that a massive "Yes" vote in Denmark would help to discipline their Euro-sceptics here. It was unmistakably a sign of the intense uncertainty over Europe at the heart of this Government that that decision was announced. Having done that once, it clearly had to be repeated when, contrary to their expectations, Denmark voted "No". Government policy therefore produced the extraordinary, and indeed humiliating, result that a British decision on what is on any view of the matter a major national issue was to be made dependent on the votes of a foreign electorate in one of our smaller Community partners.

Then we had the paving debate—again an unnecessary and divisive affair. The Government scraped through with a majority of three; but only after the Prime Minister was forced to make further humiliating, and indeed public, concessions on the timing of the parliamentary process of the Bill by agreeing that the Third Reading in another place should not occur until after the second referendum in Denmark. Why have the paving debate at all? What on earth was the point of it? The only point was that it was connected, as I said earlier, with the divisions within the party opposite. It was clearly a serious misjudgment on the part of the Government.

Finally, there is the extraordinary way in which the Bill proceeded in another place. On one crucial amendment considered advice as to its legal effect was given on one day, to be reversed by the Attorney-General in his considered advice when his attention was apparently later drawn to it. All the while the clock is ticking on, so that Britain is now the only country whose parliamentary processes towards ratification are still incomplete.

The result of this litany of misjudgment is that Britain's position inside the Community has been further eroded—and heaven knows, it was not that sound when the process started. Throughout consideration of the Bill by the other place the Government wriggled and turned in a vain attempt to stave off defeat on key amendments and to retain some semblance of party unity.

The Labour Party won crucial amendments in another place. We secured votes on the social chapter after Royal Assent but before ratification. We ensured that the European committee of the regions is served by elected representatives. We also forced the Government to accept key amendments, strengthening the Bank of England's accountability to Parliament, requiring the Government to inform Parliament on their contribution to ECOFIN and the co-ordination of economic policy, and obliging the Government to report to the Commission on the performance of the United Kingdom economy. In fact, the Labour Party ended up by drafting about 70 per cent. of the Bill. I know not whether that is some kind of record, but it is certainly an unusual parliamentary episode.

As the Leader of the House told us, the Bill is designed to enable Britain to comply with its obligations under the treaty—a treaty signed by all the Community heads of government. The signing of that treaty represented a major step in Europe's development. The Labour Party gave its broad support to the Maastricht Treaty. Perhaps I may remind the House that last year's Labour Party conference stated: The Maastricht Treaty, while not perfect, is the best agreement that can currently be achieved". I quote that because it is not exactly usual for me to be able to stand up in public and claim the support of a Labour Party resolution at its annual conference behind me. I am delighted that on this issue the Labour Party has made its voice clear and unmistakable, and I totally agree with it.

We believe that the treaty can help to provide a framework for the future economic, political and social development of the Community. We therefore welcome its provisions on regional policy, the cohesion fund, majority voting on environment policy issues, public health and training for young people. We also welcome the principle of subsidiarity and the new powers given to the European Parliament. It is our deep hope that the treaty can serve as an effective basis for closer relations and co-operation between member states.

President Mitterrand provided what I thought was a perceptive insight into the significance of the result of the second Danish referendum for the Community and our continent as a whole when he described it as helping, to clear the way to a Europe called upon to play a major role in the stability, peace and prosperity of our continent". As we see the cycle of violence in Bosnia and as we consider the very real threat of war igniting the Balkans and spreading to the former Soviet Union, it is evident that the Community should assume that major role if Europe is to be saved from a level of political instability and violence unknown since well before the Second World War. I am sure that noble Lords on all sides of the House sense the gravity of that situation. It highlights—does it not?—the importance of developing the closer political and economic ties established by the Maastricht Treaty and of promoting the enlargement of the Community to include the EFTA countries and the former communist states of central and eastern Europe. For them, the European Community means stability, not fragmentation, and for many of them political stability and economic opportunity are precisely what those countries require after so many years of communist government.

So those are some of the factors which determined our support in general terms for the Maastricht Treaty. Unfortunately, we were not able to extend the same backing to the Second Reading of this Bill in another place, principally because of the Government's myopic refusal to sign the social chapter. Noble Lords will recall that the Government's opposition to the social chapter and their insistence on an opt-out forced our Community partners to attach the chapter to the treaty as an annexed protocol. The Government's negotiation of opt-outs on both the social chapter and the third stage of economic and monetary union in our view has damaged British interests and at times left the United Kingdom dangerously isolated within the Community.

The first of those opt-outs, on the social chapter, is plainly damaging. The second of those opt-outs, on the final stage of economic and monetary union, is frankly incredible, if it means anything at all—which it probably does not anyway. Does anyone believe that if European monetary union takes place this country can, should or will remain outside it? Of course not. The Government's overall strategy, which was evident right from the start of the Maastricht process, has been begrudging and defensive, with the result that we have won few friends and lost a great deal of influence—and, incidentally, reading the press this morning, it looks as if the site of the bank is now clearly not going to be in London but will be in Germany.

The President of the Board of Trade, no less, recognised that in an article entitled, rather touchingly I thought, Time to get off the sidelines, which appeared in The Times on 29th November 1989. Mr. Heseltine, warning of the dangers of being marginalised in Europe, wrote: Our absence can only permit the self-interest of other nations. We paid a heavy price when others designed the CAP. It would be unforgivable to repeat that mistake in industrial and financial policies. The same argument applies to the social chapter". His Cabinet colleagues, notably the former Chancellor of the Exchequer, recently dismissed such warnings on the basis that a lot has changed since 1989. In one important sense they are right. Frankly, the Government's policies towards Europe have made Britain more isolated and more out of step within the Community than ever before.

In our view the social chapter is an integral ingredient of a successful single market. Our stubborn refusal to recognise that could prove costly. Not only has our hostility harmed our standing within the Community but it threatens to deprive British workers and British business of the valuable rights and benefits which their counterparts in the other 11 member states will enjoy.

In effect, the British people may expect a lower status and fewer rights than their neighbours. It seems that the Government are content, despite what the Leader of the House said this afternoon, to allow this country to have a low wage, low rights economy. Indeed, recent advertisements placed in Germany by the Department of Trade and Industry appear to indicate that the Government are making that a selling point abroad. I hope that I am not alone in finding that outrageous and totally unacceptable. In fact, I find it bizarre to think that the party opposite, which exploits every known opportunity to swathe itself in the Union Jack, should view their mismanagement of the economy as something to boast about to foreign investors. We on these Benches share the view endorsed by political parties, including the leaders of Conservative parties and employers across the Community, that Britain has much to lose and very little to gain by its protracted opposition to the social chapter.

The position of the Labour Party is therefore perfectly clear. We support the aims of the treaty. We recognise that it is by no means a perfect instrument but we believe that its advantages outweigh its costs. We deeply regret the failure of the Government to adhere to the social chapter and we are grateful that the Opposition in another place has made it possible for a vote on this issue to take place following the passage of this Bill but before ratification itself.

Perhaps I may now turn to the issue of a referendum. When the Prime Minister came back from Maastricht there were, I suppose, two routes towards ratification that he could have pursued. He could, as did some other countries in the Community, have held a national referendum on the issue and declared himself content to abide by the result. Alternatively, he could—and he did—pursue the normal route, the parliamentary route, whereby the issue would be considered by Parliament and ratification would thereafter take place.

I can see the arguments in other countries for their use of a referendum. Here, it would be an unusual, though I concede not unprecedented, procedure. But having opted 18 months ago for the parliamentary route it would be extraordinary if one were now to change tack. After all, Parliament has been considering the issue for a very long time. It has passed the other place and received its Third Reading there with a considerable majority. For your Lordships' House, unelected as it is, to defy the considered view of the elected Chamber and insist on a referendum when that was rejected with an overwhelming majority in the other place would, in my view, produce—to put it at its lowest —constitutional friction of considerable significance. I believe that we would be very unwise to embark upon that course.

Frankly, it is now far too late to pursue the case for a referendum. Had the Government not mishandled the situation in the way that they have done, the parliamentary process could well have been completed much earlier and I have no doubt that by now ratification would have taken place. For those reasons, we on this side of the House would not support a call for a referendum on this issue. And I am fortified yet again by the fact that last year the Labour Party conference voted overwhelmingly against a referendum on the issue of the Maastricht Treaty.

Finally, I return to the opposition to the Bill. It falls into two categories. There are those who have opposed these matters on principle over many years. I think particularly —I hope he will forgive my mentioning him—of my noble friend Lord Bruce of Donington. I respect his views on the Community though I profoundly disagree with them; they have been consistent, they are principled and they are well informed. Others, if I may say so, seem to have come to their opposition somewhat late, having supported the contrary view for many years past. Perhaps in their case a "suppressed reluctance" has now broken out into the open. But whatever it is, there is neither principle nor logic in complaining now, in 1993, about the effects of the Single European Act which was passed in 1986. That is true particularly of those who were responsible for the passage of that Act. It opened the door to more majority voting; it talked in the preamble about the need for a closer union; and indeed it did many of the things that some people opposed to the treaty now complain of about Maastricht itself. Those who were mute in 1986, or indeed were active in promoting the passage of that Bill, must be presumed to have intended the consequences of their actions. To complain now about those consequences is perhaps just a little tardy.

On balance, I am in favour of the passage of the Bill for one simple reason, and it is precisely the same reason which has motivated my attitude towards Europe for some 35 years. The nightmare that confronts this country is one in which continental Europe becomes more and more united and Britain becomes more and more isolated. We really must not repeat the mistakes of past generations who assumed that the Europeans could never get their act together and that, if they did, it would not amount to a great deal. They did and it has!

The drive towards greater unity in Europe is patently there. We have to decide as a country whether or not we are to be part of that movement. While one can argue about the fine print of the treaty—and all of us have reservations on some parts of it—in the end the issues are fundamentally simple. Is Britain to continue to play its part as a member of a movement towards a closer unity in Europe, or are we to withdraw? I have no doubt where the interests of our country lie and what the answer to that question should be.

3.30 p.m.

Lord Jenkins of Hillhead

My Lords, my noble friends and I believe strongly that the endless and convoluted debate in another place has deadened rather than informed public consciousness in regard to the real issues involved in the future of Europe and Britain's place in it. We hope that that dreary charade will not be repeated in your Lordships' House.

We support the ratification of Maastricht and want it done quickly. It would have been a great deal better if the Government had got on with the matter after the overwhelming Second Reading vote and had not humiliatingly hung around waiting for Denmark. I agree with the points made on that issue by the noble Lord, Lord Richard, as I agreed with much of the tone and detailed arguments of his speech. However, at one point he left me wondering, as he described the glory of the Labour Party amendments which had underwritten 70 per cent. of the Bill, why the party abstained on Third Reading.

Having said that, I am bound to say that although I thought the Leader of the House raised the level of his speech a little in the last two or three minutes, the major part of it was a classic example of the negative and apologetic attitude to Europe which is largely responsible for the fact that the Government have been unsuccessful in rallying support for their European and other policies.

That does not mean that we on these Benches are starry-eyed about the treaty. In many ways it provides a less concrete avenue of advance for Europe than did the Single European Act of 1986. In my view it is also less of a technical invasion of sovereignty than was that measure. I say "technical" because I believe that the real limitations on national sovereignty arise much more from the facts of the highly integrated modern world than from any treaties or Acts.

What is also the case is that the Single European Act heralded a remarkable five years of European integrationist dynamism—the strongest since the first days of the Community after the Treaty of Rome when we were mistakenly on the sidelines. By contrast, the 18 months since Maastricht have been some of the most difficult in the history of the Community. It follows that if there was ever any danger of European integration acquiring what for some people would be an unacceptable and uncomfortable momentum, it was in 1986 and 1987 and certainly not today.

That makes the more mystifying the attitude of the noble Baroness, Lady Thatcher, who is to speak in our debate and the deadly nature of whose speech has been trailed with unusual assurance. Not only was the noble Baroness responsible for Britain's adherence to the Single European Act, but also she pushed it through the House of Commons with the strongest of Whips and allowed no fumbling delay such as that displayed by the present Government. There was no filibustering because the noble Baroness simply guillotined the Bill.

There has never been a more classic case of swallowing the camel and straining at the gnat. Her loyal lieutenant, then Chairman of the Conservative Party and a leading Member of the Cabinet, was the noble Lord, Lord Tebbit. Therefore they both have a history of dealing with European legislation which makes anything done in the 1970s by the noble Lord, Lord Wilson of Rievaulx, a model of consistency.

We now have their chosen instrument of the referendum. It is a subject which is engraved on my heart. Twenty-one years ago I resigned from the deputy leadership of the Labour Party on this issue —a position in those days, when Labour was still a party of government, not without its prospects. I resigned because I thought that the discreditable tactical switch to advocating a referendum was unacceptable. The noble Lords, Lord Thomson of Monifieth, Lord Lever of Manchester, Lord Rodgers of Quarry Bank and Lord Owen, and several others not in your Lordships' House, resigned with me.

The noble Baroness, Lady Thatcher, agreed with me—at least she voted against the amendment which was the cause of all the trouble. But in 1975, when the issue of a referendum again came before Parliament, she did much more than that. In speaking against the Referendum Bill, the noble Baroness quoted with approval a 1945 Statement of Lord Attlee which said that the referendum was a device alien to all our traditions which had only too often been the instrument of Nazism and fascism.

That was a rather extreme view with which I am bound to say I would not entirely agree. However, it is the case that at that time the noble Baroness most firmly opposed it. It did not carry the day. In the summer of 1975 we had our one experience of a general referendum in this country. I confess that, strongly though I was opposed to it taking place, I much enjoyed the campaign, in which, with the gracious agreement of the noble Baroness, Lady Thatcher, I acted as president of the "Yes" organisation. I particularly enjoyed the result which, it should be remembered—contrary to all the earlier expectations of those hostile to Europe and contrary to the earlier polls—was a two-to-one majority in favour.

Therefore as an anti-European device, the referendum proved to be a totally broken reed. Nevertheless, I would not be in favour of repeating the experiment today. First, with the present lack of respect for government—exceptionally but not uniquely strong in this country—many electors would be disposed to seize any opportunity of cocking a snook at the ministers of whom they are so contemptuous. And I would not wish to tie the fate of Britain's long-term orientation to the present vote-winning capacity of this Government, or to the chance of whether or not the green shoots of recovery might at last begin to burgeon before the votes were cast. I am perfectly sure that the very narrow results of the French referendum last autumn, in spite of the support of most of the leaders of the opposition in France, had a great deal to do with the unpopularity of both the president and his then government. The paradox was that a lot of the votes which appeared to be cast against Brussels were in reality cast against the French national government.

Secondly, the confused and tedious debate which in the past months has dominated Parliament while rating low in the public's order of priorities has made the waters surrounding the European issue both stagnant and muddied. So much so that I doubt very much whether clarity could quickly be imported into the issue or whether a poll approaching the 66 per cent. of 1975 could be achieved.

There is a third issue on this referendum point which I mention with some circumspection because it involves the internal affairs of a party not my own. If anyone thinks that a referendum would relieve the current internal strains of the Conservative Party I believe that they are profoundly mistaken. A referendum involves something very near to fighting a general election campaign. If that is done with different factions within the same party and different Ministers within the same Cabinet fighting on different sides, as was the case in 1975, the trauma is deep and lasting. Speaking with close experience of both events, I believe, as a matter of objective judgment, that, though unforeseen at the time, the 1975 referendum campaign had a great deal to do with the 1981 split in the Labour Party and the creation of the SDP.

I think that the central case for ratifying Maastricht is that it will retain some sinews of order in Western Europe. The disruption in the world since the putative glorious revolution of 1989, arising hopes as high as those in the breast of Wordsworth 200 years before, has been appalling. Eastern Europe and the former Soviet Union vary between bloody tribalism in Yugoslavia and depressed separatism in the old Czechoslovakia. Western Europe has so far remained free of anything like that. But it has suffered from a severe decline in the authority of government in every major country, and in many of the smaller ones too. For a few brief months at the beginning of this year it seemed that across the Atlantic the United States might be a major exception. There was a brief window of hope. Now, temporarily at least, that seems to have darkened. The only possible exception to this pattern of disregard may be the Balladur government in France, but that exception should be treated with caution both because it is so new and because it has an executive president sitting on top of it or at least alongside it. For the rest, the end of the cold war has produced almost as much disarray among the winners as among the losers. It is like the end of a tug-of-war in which both teams fall over in the mud as soon as the tension is removed.

The ratification of Maastricht will not in itself pull everyone out of the mud and put them on their feet again. It will not in itself solve the problems of disarray in Western Europe. But it is a necessary condition for beginning to do so. And British ratification is an even more necessary condition for Britain playing any effective role in the Community. I do not myself believe that we will see the recovery of real European momentum before the deadening hand of recession begins to recede and until the Community can show its relevance to producing such a recovery. I have long been a dedicated European, but I also like to think that I have been as much or more of a Euro-realist as anyone who so proclaims himself in hostility. I have never believed in proclaiming idle or irrelevant goals. I think that some practical measures to reduce unemployment would do more good to the European idea than any rhetoric we could possibly invent at the present time.

Yet by the same realistic test I note that those who are hostile to full British commitment to Europe have never come within miles of producing a coherent alternative strategy for Britain. Any kind of exclusive Atlantic link now seems to me as much of a will-o'-the-wisp as was a Commonwealth orientation 20 years ago. And to take one concrete issue, the Government of the noble Baroness were, as I understood it, as dedicated to the enlargement of the Community—certainly to the EFTA applicants and later to the Western Crescent of the three old Iron Curtain countries—as are the present government. How anyone could possibly believe that a Community thrown into confusion by the collapse of Maastricht will proceed to early enlargement I cannot imagine. There will on the contrary be a battening down of the hatches, a mood of sullen caution, an instinctive determination not to agree to anything which a British Government, having first contracted out of half the treaty and then wrecked the rest of it, want to happen.

Maastricht, in spite of Mr. Major's excessive claims for his triumph there, is not God's gift to man, but its ratification is now essential if Europe is to conduct reappraisal of its future in an atmosphere of common purpose rather than of mutual suspicion, and if Britain is not to be reviled within it. Let us get on with it, and get on quickly, for we have been dithering too long.

3.48 p.m.

Viscount Tonypandy

My Lords, your Lordships will be aware that during the decade that I have been privileged to serve in your Lordships' House I have very carefully avoided speaking on what I considered to be clearly party political issues. Following the precedent of others who have been Speaker of the House of Commons, I have endeavoured to speak on those issues which are not clearly belonging to one side or the other. I believe that the destiny of the British people is bigger than any party and that this House has an equal responsibility with the other House to give careful consideration to what is at stake.

First, I am of the opinion that those who support Maastricht and those who oppose it will agree that the course for Britain will never be the same again if this treaty is ratified. It is no good noble Lords speaking with such enthusiasm. The noble Lords, Lord Richard and Lord Jenkins of Hillhead have much more experience of Europe than I have because they were both part of the bureaucracy of Europe and of the institution there. I almost felt that I should not stand between the noble Baroness and the noble Lord, Lord Jenkins who himself is hardly in a position to talk about inconsistency. I hope that he understands what I mean. There is a message in where he is sitting in the same way as there is a message in where I am sitting.

Because I believe that the sovereignty of our country is at stake I feel obliged to address your Lordships' House and say this: Power under Maastricht is to be transferred from the elected representatives of our people to Europe where we will be a permanent minority. It will be 15 per cent. Tell our unemployed to go to Germany and look for a job; to go to Italy to look for a job and to go to France to look for a job. They will look to the High Court of Parliament here to take the economic measures that we believe are in our national interest. I say with respect to the noble Lord on the Government Front Bench, that his speech was the least enthusiastic of the three to which I have listened.

Since we joined the Community we have had a net trading deficit of no less than £81 billion to which might be added a net deficit in our Community contributions of over £13 billion, making all told a deficit for this country with the Community since we joined of the best part of £95 billion. It is interesting to note that 70 per cent. of the world's trade is still conducted between English-speaking countries. The noble Lord, Lord Jenkins of Hillhead, scolded the noble Baroness who is to follow me in this debate for quoting Clem Attlee. Perhaps I may quote what Winston Churchill said in 1953. Many a time that great leader of our nation was prophetic both before the war and during the war. I served on the opposite Benches to him for 15 years in another place. He said: We are with Europe but not of it. We are linked but not comprised. We are associated but not absorbed. And should European statesmen address us and say, 'Shall we speak for thee?', we should reply, 'Nay Sir, for we dwell among our own people'". The long proud history of the House of Commons and of your Lordships' House is very precious. The dignity of our nation is wrapped up in the history of our people. Therefore, who should decide? Scorn has been poured on a referendum, yet the noble Lord, Lord Callaghan will know that we had a referendum over the piffling issue of that non-legislative assembly in Wales. It was thought essential. Parliament could not decide. The Government decided that the people must decide because the constitution was affected. We all know that the constitution is very much affected today.

In the first referendum that took us into Europe we had an assurance from all the leaders that our sovereignty would never be in question. We have been led inch by inch and now they tell us that we have gone too far and that we cannot pull back. I believe in this country and I believe that the British people are equal with the French and the Danes in their ability to measure where their interests lie. This is a matter where the High Court of Parliament should say to the people, "This is our advice and because we are deciding for those yet unborn, let the people as a whole decide". Britain wants a referendum and she deserves it.

3.57 p.m.

Baroness Thatcher

My Lords, when I came to this House it was somehow under the impression that things were less lively here, much more courteous and much less robust. I find that it is not so and I am delighted. First, perhaps I may make one or two remarks about what my noble friend the Lord Privy Seal said. He referred very much to the importance of trade and said that Europe is an excellent export market for us. We are of course an even better import market for the rest of Europe. We have had a great deficit on trade ever since we entered.

The answer is not in the Maastricht Treaty, but for Europe to negotiate firmly and quickly under the GATT arrangements, which negotiations Europe is at present holding up. It is stopping the very thing that we need. Perhaps I may also say this to the noble Lord, Lord Jenkins of Hillhead: will he do me the honour of reading through the speech to the end? He will see that I said that perhaps Lord Attlee was right, that there was a place for a referendum when that is the only way of putting an important single constitutional issue to the people. Otherwise, having two main parties, we vote on a general manifesto, and there is no way of putting an important constitutional issue to the people, except by a referendum. That is why we have had referenda on Northern Ireland, Scotland and Wales. They were constitutional issues.

I very much agree with the noble Viscount, Lord Tonypandy. Let me make it quite clear that we are now debating whether we go further with the Maastricht Treaty. I agree with his fundamental underlying assumption; namely, that it is that treaty which takes us over the top to a new political entity, a European union, which we have never had before. Before that, we had never gone that way but had kept quite a bit of sovereignty, and it is the last lot that we are in danger of losing.

Therefore, it follows that even if we were not to endorse Maastricht—and I am very much aware of the rules of this House—we are still members of the Treaty of Rome; we cannot break it. We are still members of the Single European Act; we could not break that. We do not break our treaties—and if ever we did, no one would ever sign one with us again. So even if we did not endorse Maastricht, we would still be part of Europe. And if we did not, it would be the others who would have to reconsider matters and go ahead. I firmly believe that there are more important matters going wrong with Europe which we should consider at the moment—some things at the Court are very much to our distaste, as are some aspects of majority voting. We should be considering some of those matters rather than having this treaty, which is a fundamental change forward.

Perhaps I may revert to the speech that I had intended to make. I shall try to cut it down a little. I believe very much, with the noble Viscount, Lord Tonypandy, that it does not matter where we sit in this House; it does not matter where we work in the country or what our party politics are; it is our country's future that is at stake. It is our parliamentary institutions. It is our court of law. We called ourselves "free people" long before we had a universal vote in this country because we had the most excellent rule of law—and that matters to us very much.

If one looks back and tries to view things in a broad sweep, one finds that there have always been two views of Europe: one is of nation states freely co-operating together with an effective veto either by unanimity or by the Luxembourg Compromise—and, of course, majority voting did not start with the Single European Act; it is right in the Treaty of Rome. That is why de Gaulle had the Luxembourg Compromise —because he quarrelled with something which would otherwise have been done by majority voting. The Luxembourg Compromise acted as a veto. That view was always compatible with what is called "the new world order" —the United Nations, the GATT and the IMF. It was compatible with that view because those institutions were perfectly all right for all small nations. By joining them, no small nation lost its identity. Each retained its identity in those institutions. So, that first view of Europe was compatible with that order.

The second view has always been towards an integrated European union. That is why the phrase an "ever closer union" was put in the Treaty of Rome —not clothed with meaning. We always had the assurance to which my noble friend referred. There was always an assurance that we would keep our identity and our veto but gradually, little by little, it went and everything came in stages. Whatever you said in the Community, it had to be the first stage of something which led to one destination, a European union. You did not have any other alternatives. You were either on a slow train or a fast train, but you were on the train to that destination—and if you do not want to go to that destination, it does not matter at what speed you go. You do not want to be on it at all. I suggest that we do not want to go any further on that train.

Everything is a stage. I remember when we put forward the hard ecu in the Council of Ministers as a possible common currency. Yes, they would consider the hard ecu, but would I not tack on to it as a stage towards a single currency? No, I would not. It was simple staging but the same destination. That is what Maastricht is all about—that destination—and it very nearly gets there.

Perhaps your Lordships will look back to 1972 when we went in and at the assurances and the referendum assurances. They are all there for everyone to see. As I expected, the Single European Act has been much mentioned already. Right in the heart of the Treaty of Rome is the need to have a common market. That was how we were going to get our prosperity up; that was how we were going to have more jobs; that was how we were going to compete the world over because we had a large enough market to compete with the American market and a large enough market ultimately to compete with the Far East.

So, yes, we wanted a common or single market but it was a long time before the Community got down to it. Eventually in 1985 we started to prepare for this single or common market and to get rid of the massive number of both tariff and non-tariff barriers that were needed. I was at the forefront of that campaign because I believed that we wanted it. At first, I thought that we could get it without any changes in legislation. I thought that if there was reasonable goodwill, we could have it. But there was not reasonable goodwill and we had to have an inter-governmental conference. And the point is this: we would never have got the single market without an extension—not the beginning, but an extension—of majority voting. We could never have got our insurance into Germany—where they promptly kept it out—unless we had majority voting. We could never have got a fair deal for our ships in picking up goods from other ports as others could pick up from ours. We could never have got a fair deal for our lorry and transport business because our lorries had to go over there full and come back empty as they were not allowed to pick up on the way back. Yes, we wanted a single market and we had, in fact, to have some majority voting.

But as noble Lords will see if they look back at the debate on that Single European Act, we were very careful indeed to say that some things are so important that they must be subject to unanimous voting. Those were—and I quote— fiscal provisions, free movement of persons and the rights and interests of employed persons". All of those required unanimous voting. For other things for which we did not have unanimous voting but majority voting, we kept intact the Luxembourg Compromise. My noble and learned friend Lord Howe gave those assurances and my noble friend Lady Chalker gave even firmer assurances, if she looks back, than the ones that I have given, but we had those assurances. And, let it be said, we believed that the Commission would honour those assurances. We believed that they would honour the unanimity that is in the Act; they did not. We believed that they would not pile on excessive regulations because of the extra cost to industry (and if we were to compete in the world, that would be a very silly thing to do); they did pile on extra regulations. Our good faith in them was not justified—and it is written on my heart.

The Commission deliberately chose to evade the unanimity rule and to bring in, for example, the 48-hour working week regulation under a qualified majority heading, such as health and safety. As soon as the other place passed this Bill, the Commission put the 48-hour working week through on a qualified majority—against Britain. Now, fortunately, our Government have referred it to the European Court. I shall say a few things about that in a moment. The courts have previously upheld qualified majority on the part of the Commission against unanimity. When they have had a choice, there have been occasions when the courts have upheld their decisions to go by qualified majority.

Yes, we got our fingers burned under the Single European Act. We still needed it, but that qualified majority was for one purpose only, and it is specified in the Act. It was with the aim of progressively establishing the internal market over a period expiring on 31 December 1992". That was all that the extra majority voting was for, and yet the Maastricht Treaty is much, much wider. The Maastricht Treaty extends the powers of the Commission from 11 to 20 areas of government and provides for 111 new occasions when decisions can be by qualified majority. This is a massive extension. In our case, it will be only about 100 occasions unless we were to go into the single currency, which I hope we never do. Some of those majority occasions include decisions in economic and monetary policy. This is an overwhelming centralisation of decisions by bureaucracy at the expense of democracy and at the expense of accountability to the electorate. In view of what happened under the Single European Act when we got our fingers burned, it surely is time to heed Kipling's warning: And the burned Fool's bandaged finger goes wabbling back to the Fire". Do not let ours be that bandaged finger.

Perhaps I may say a word about subsidiarity, a topic to which my noble friend referred. The treaty talks about subsidiarity, and then it immediately confirms the present corpus of law (the acquis communautaire). So subsidiarity does not go to any regulations or directives which are already in commission. The Commission's view on subsidiarity is put very interestingly in a long document presented to the Council and Parliament. The Commission points out in that document: The enshrinement of subsidiarity in the Treaty (of Maastricht) … provided an opportunity to stress that subsidiarity cannot be used to bring the Commission to heel by challenging its right of initiative and in this way altering the ballance established by the Treaties". The Edinburgh Summit communique said something similar. It said: The principle of subsidiarity does not relate to and cannot call into question the powers conferred on the European Community by the Treaty as interpreted by the Court … The application of the principle shall respect the general provisions of the Maastricht Treaty including maintaining in full the acquis communautaire and it shall not affect the primacy of Community law nor shall it call into question the principle set out in Article F(3) of the Treaty … according to which the Union shall provide itself with the means to attain its objectives and carry through its policies". I suggest respectfully that that is another assurance that will turn out not to be an assurance at all, but a great move, as the noble Lord said, towards much greater centralisation.

I shall say a word about the European Court because it has had a great effect upon the powers that we have relinquished. It has by its decisions greatly extended the powers of the centralised institutions against the nation state. Its methods of interpreting the law are totally different from those of our courts and nothing like so exact or so good. The court draws upon the objective of European integration to inform all its rulings by which over a period of time it has therefore furthered decisions towards a unitary European state.

The court has also overruled specific legislation passed in good faith through Parliament recently (the Merchant Shipping Act 1988) which was framed to stop Spanish fishing vessels from quota-hopping; that is, taking part of our fishing quota under the common fisheries policy. That Act went overboard because by same strange device the court said that Community law overrode it. Even though it was recent, we did not prevail. The court has also reinterpreted the derivative rights directive. It is busy reinterpreting so many things to give itself and the Community more powers at our expense.

That court does not have constitutional checks and balances to temper its power. What was tolerable in a few cases is not bearable on the scale it is happening now, and it will accelerate under the massive opportunities provided by Maastricht to which I have referred, thus undermining the basis upon which we require people to obey the law; namely, that either it is consecrated by time and custom or it has been made with the assent of the people's elected representatives. That is the whole basis upon which we do not ask people to obey the law; we require them to obey the law. That basis is diminishing gradually. With increased majority voting, many more laws will be made, possibly against the will of elected representatives, and Parliament could not do a thing about it. It may be all right for a few, but not for the massive extra number.

Moreover, only three out of the 13 judges of the European Court have judicial experience in their own countries. Perhaps that explains a lot! They all have legal qualifications: some have been Ministers; some have been senior civil servants. But we are used to having proper judges. Further, one judgment only is issued. We do not even know whether any judges dissented—we are not allowed to know—let alone upon what grounds. We, with our ancient court traditions and ancient rule of justice have far more to lose in this matter than any other country, many of which we doubt will respect some of the Community laws in any respect.

Perhaps I may make some additional comments on the Maastricht Treaty before coming to the referendum. It starts in clear terms: By this Treaty, the High Contracting Parties establish among themselves a European Union … This Treaty marks a new stage in the process of creating an ever closer union". There it is—straight out: a new stage. It is a very important big step, because it seeks a new political entity, something we have never had before. It creates a European Union. Later, Article 8 creates a citizenship of the Union, something totally new. It establishes it. It applies to every person holding the nationality of a member state.

The article refers to rights and duties and spells out the new rights which can be extended. Moreover, if there is a citizenship, you would all owe a duty of allegiance to the new Union. What else is citizenship about? There will be a duty to uphold its laws. What will happen if the allegiance to the Union comes into conflict with allegiance to our own country? How would the European Court find then? The Maastricht Treaty gives this new European Union all the attributes of a sovereign state.

I shall go through those attributes quickly. What are the attributes of a sovereign state? First, there is citizenship. It gives the right to conduct foreign policy and assert its identity on the international scene (the whole of this treaty has that); and the right to frame a common defence policy which in time could lead to common defence (the treaty has that). It has its own Supreme Court of Justice, the guardian of its constitution. It has its own external boundaries. It manages its own economic and monetary policy. It will have its own central bank, ultimately including a single currency, hopefully not including us, although we have signed up to the idea of a single currency. It has a single market. It conducts its international trade negotiations as a unit. We have no authority to conduct trade negotiations. We lost that in 1972. We have signed up to the objective of a high level of social protection. I wonder whether the social chapter will be brought in by the European Court to apply to Britain, because we have signed up to that high level of social protection. There is an embryo government in the Council of Ministers (the European Council); there is an executive in the Commission; and there is an elected European Parliament. All of that is "the single institutional framework" to which the treaty refers.

The voluntary alliance of 12 nations that we joined is being turned gradually into a new political entity —a European super state. I doubt very much whether the people realise what is happening. Unification is supposed to be the natural direction of development.

There is a review promised in 1996 by the treaty. There is always a relaunch. One reaches one stage and then there is always a relaunch. Now there is a relaunch and a review. The review of 1996 is in the treaty. It is not an open review. As Article N points out, that review must be in accordance with the objectives of an ever-closer union which is set out in Title (1).

I could never have signed this treaty. I hope that that is clear to all who have heard me. The Bill will pass considerable further powers irrevocably from Westminster to Brussels, and, by extending majority voting, will undermine our age-old parliamentary and legal institutions, both far older than those in the Community. We have so much more to lose by this Maastricht Treaty than any other state in the European Community. It will diminish democracy and increase bureaucracy.

M. Delors knew well the importance of his words when he spoke to the European Parliament in 1988. He said: Ten years hence, 80% of our economic legislation, and perhaps even our fiscal and social legislation as well, will be of Community origin". He went on, and this is not so generally known: In 10 countries, though"— we were excluded— there has been no realization of this, and in these same 10 countries there is no co-operation between European parliamentarians and national parliaments". Then he went on: What I am afraid of is that some of these national parliaments are going to wake up with a shock one day, and that their outraged reaction will place yet more obstacles in the way of progress towards European Union". The national parliaments are entitled to have an outraged reaction. They will soon be little more than an agency for the Commission and for the European Council.

Finally, the referendum. No elector in this country has been able to vote against Maastricht—none. It has been impossible to do so. I think that when one looks at the extent of the powers which are being handed over, it would be disgraceful if we denied them that opportunity. Yes, we waited with bated breath for both Danish referenda. They thought that people were bullied out of their first decision. So much for the unanimity rule.

Further, in the other place less than half the honourable Members voted for the treaty. The electorate has not been able to vote and half the honourable Members in the other place—less than half; 292 out of some 650—voted for the treaty. We are in the Rome Treaty and in the Single European Act and we stay there. I believe that to hand over the people's parliamentary rights on the scale of the Maastricht Treaty without the consent of the people in a referendum would be to betray the trust—as guardians of the parliamentary institutions, of the courts and of the constitution—that they have placed in us.

4.22 p.m.

Lord Boston of Faversham

My Lords, in a modest way I wish at the outset to alter the course of this debate. As yet, the noble Lord the Leader of the House has not come in for much thanks but I wish to thank him for explaining so clearly the provisions of the Bill. It is a short Bill but a complex one and he has explained it plainly. It is also clear from today's debate that the Bill is important. That is plain both from the number of speakers who are taking part and from their experience.

It is a privilege to speak following the noble Baroness, Lady Thatcher. I hope that she will forgive me if I do not follow her in the substance of what she said, but add simply this. Undeniably hers was a contribution on an occasion of such significance as this which your Lordships would not have wished to have been without. For that I certainly offer my thanks, even if I do not follow her in substance.

I must in fairness warn your Lordships that my contribution will not be as exciting as those which we have already heard nor, I am sure, many of those which we look forward to enjoying. It will be largely factual and probably uncontroversial. However, it would be rash of me, if not presumptuous in this perhaps somewhat highly charged situation, to predict that it might be universally acceptable. I wish to say something about the impact of the treaty on parliamentary scrutiny of Community affairs carried out in your Lordships' House by the European Communities Committee, which I chair. Perhaps that will strike a chord with the noble Baroness, Lady Thatcher, because during the course of her remarks she mentioned the importance of our Parliament and our parliamentary institution.

This duty to scrutinise and the power which goes with it amount to one of the most powerful devices possessed by this House. It stems from the undertaking given by the Government that they will not, save in exceptional circumstances, agree in the Council to a Community proposal until the scrutiny reserve on it has been lifted by your Lordships' Select Committee. And a similar power is held in another place through its Select Committee on European Legislation.

The European Communities Committee has not made a report to this House on the provisions of the treaty agreed at Maastricht. As a scrutiny committee, its principal role remains to make reports to the House on important Community proposals before and not after they are adopted. But many of the provisions in the treaty have been the subject of committee reports in recent years, and there is a substantial body of opinion in its reports relevant to many aspects of the treaty. I should like to mention one or two examples. A report in 1990 supported the proposal that Union citizens should have voting rights in local and European Parliament elections in their country of residence —a provision which can be found in Article 8a of the treaty. There are several articles, too, that seek to strengthen measures against fraud in the Community, including new powers for the Court of Auditors under Article 188. These provisions will certainly strike a welcome chord in your Lordships' House and there have been two major reports on this vital matter in recent years. Other reports have expressed support for specific Community competence for education and culture, for human health protection and for consumer protection. Provisions to these ends can all be found in the treaty, and some of them were referred to by the noble Lord the Leader of the House.

There are two specific reports which I single out. They were both made before the Maastricht agreement in December 1991 but they remain wholly germane to our debate today. The first was the remarkable report of the inquiry into economic and monetary union and political union, chaired by the noble Lord, Lord Aldington. The second was the report of an inquiry on political union: law-making powers and procedures, chaired by the noble and learned Lord, Lord Oliver of Aylmerton. Many of the conclusions in those reports supported the broad direction in which the treaty emerged; notably the two intergovernmental pillars of the common foreign and security policy and co-operation in home affairs and justice. However, there were exceptions. Both reports expressed doubts, for instance, about the proposed co-decision procedure between Council and Parliament and they came down in favour of only a limited, not a blanket, increase in qualified majority voting. In any event, I commend those excellent reports to your Lordships: I am able to pay this tribute as I was not a member of the committee at that time.

I should like to turn now to the question of parliamentary scrutiny and, in particular, to draw attention to two little known but, in my view, most important declarations attached to the treaty for which I know that Her Majesty's Government were at least in part responsible.

The first concerns future meetings of conferences of parliaments—the so-called "Assises"—held only once, in Rome, in 1990 prior to the intergovernmental conferences. The declaration invites such conferences to meet "as necessary". These are large-scale meetings. That in Rome was attended by no fewer than 258 representatives; two-thirds from national parliaments and one-third from the European Parliament. Opinions are divided on their potential usefulness and some see that there is perhaps the danger that they will become—dare I say it?—little more than talking shops.

But I do not hesitate to welcome wholeheartedly the second declaration which encourages greater involvement of national parliaments in the activities of the Union and the stepping up of contacts between national parliaments and the European Parliament. This seems to me a vital ingredient in the Maastricht package and, if I may say so, a most welcome conversion; certainly on the part of Community institutions. In the European Communities Committee we welcome especially the statement that governments will ensure that parliaments receive Commission proposals in good time for possible examination. I am bound to say that, on the whole, we at Westminster are well served by government departments in that respect; but, if necessary, we shall not hesitate to quote the declaration loudly and often if documents are slow in coming or do not come at all.

With one exception, the treaty will not, we believe, affect our well established scrutiny procedures. The exception is the need for some sort of parliamentary scrutiny, and so democratic control, of the two intergovernmental pillars; and that is something to which the committee, and indeed committees in another place, are giving careful consideration. In fact, your Lordships' Select Committee on the European Communities is now carrying out an inquiry into this whole matter. We shall shortly hear evidence from the Home Secretary and from the Foreign and Commonwealth Secretary. I must not pre-empt our inquiry, but I think that we are already clear that Parliament must receive appropriate documents arising from the pillars and be given the chance to scrutinise them carefully. It follows that there will be some increase in the committee's work load. I feel it right to alert your Lordships to that.

One Community body which is most certainly not a talking shop is the Conference of European Affairs Committees, consisting of representatives of all the parliamentary scrutiny committees through the Community; from national parliaments and from the European Parliament. It meets every six months in the country of the presidency. At the meeting last month, in Copenhagen, one of the main debates was on plans to scrutinise the two new pillars. On behalf of the United Kingdom delegation I had proposed this subject for the agenda and initiated the debate. It provided a timely means of focusing attention on the need for this extra scrutiny. I add my thanks for the valuable contributions made by the other two Members of your Lordships' House who attended—the noble Baroness, Lady Elles, and the noble and learned Lord, Lord Slynn of Hadley.

The scrutiny development that I have mentioned will be a vital part of the Maastricht package. We must ensure that it works and that it works effectively.

4.33 p.m.

Lord Carrington

My Lords, it will not have escaped your Lordships' attention that there is a phenomenal number of speakers in the debate. I calculate that it is three times the average daily attendance of this House when I first became a Member. It is not for me to say which is better.

I should have hesitated to speak to your Lordships when there are so many others who wish to do so but over the years I have been involved, in various capacities, in Britain's commitment to the European Community. Therefore, I thought it right to put on record where I stand as regards the Bill.

Over a very long period—some 40 years—I have believed that Britain's membership of the European Community is an essential requirement for our economic and political survival. That is partly because, as a result of the war and the decolonisation of the British Empire, we were left in a changed and weakened political and economic position; partly because the war must or should have taught us that an association with Europe was not just an economic but a political and defence necessity; and partly because the Commonwealth no longer could be a substitute partner for us. Even 35 years ago, when I lived in Australia, it was more than obvious that the Commonwealth countries were making their own economic alliances.

Therefore, I am for Europe. But I do not feel at all uncritical of some of the things that have happened or indeed of some aspects of the Maastricht Treaty. It seems to me that one of the difficulties of an association of twelve independent countries—soon to be more—is their diversity: their different traditions, background and temperaments which make up the whole. For example, there is a radical difference of attitude between what one might call the conceptualists and the pragmatists. In greater or smaller measure, all the twelve countries fall into one of those two camps. The conceptualists favour blueprints and timetables while the pragmatists essentially query concepts, often asking the conceptualists the rather irritating question, "Yes, but what does it really mean?" Of course, both have a point.

The European Community would not exist were it not for the concept of Mr. Monnet, but the pragmatists must surely be right to seek practical solutions to vague concepts. But I am inclined to think that that difference of attitude and perception lies at the heart of some of the problems in the Community at present.

If we go too fast and too far, there is a real danger that public opinion will not have caught up and that attitudes and traditions which are very deep rooted in most people, whether they know it or not, leave them unprepared for a change which, as time goes on, will be inevitable.

At the same time, if there is no progress forward, if there is no aim, if there is no attempt at keeping the momentum of Europe going, frustration and inertia become as great a danger.

It therefore follows that a very delicate balance is necessary, and that dilemma lies at the heart of a great deal of the opposition to the Maastricht Treaty. Of course, there are those opposed to the treaty who are essentially opposed to the idea of the European Community in any shape or form and are taking advantage of Maastricht to promote their view. But there are also those who feel that the balance in the treaty has gone too far in favour of the conceptualists.

Equally, a lot of criticism of the treaty has nothing to do with the contents of the treaty at all. It concerns the Commission in Brussels. I speak as a farmer and I am a little uncertain as to whether all the rules and regulations which have submerged us in paper over these last months come from the Commission or an over-zealous Ministry of Agriculture. Whichever is the case, it has been intolerable. However, the remedy is in the hands of the Foreign Ministers, the deputies or the Ministers in the various committees. They have the power to block, if they wish to, any of those regulations. If, as my noble friend Lady Thatcher said, subsidiarity in its current form is not strong enough, it is up to Ministers to see that it is. We must do away with those absurdities which have little to do with the proper purposes of the Community.

With regard to the treaty, I make it plain that I am not a federalist in the sense in which we in Britain talk about federalism. That view is shared by Her Majesty's Government and has been made plain by the Prime Minister. But I do want closer integration. I want to be on the train to which my noble friend referred. I do not wish to be left stranded in perpetuity at Crewe. However, I want to know what is the destination and I do not want us to reach the destination until all the passengers have decided exactly where they wish to go. Nor am I in any way opposed to a common foreign policy, a common defence policy or a common currency provided that those are practical propositions with some prospect of success and support.

There is no way in the current circumstances that those three desirable aims can be achieved in the timetable that is envisaged. Anybody who spent, as I did, one year chairing the EC Peace Conference on Yugoslavia can bear witness to the lack of foreign common policy and the catastrophic consequences of trying to pretend that there was one. However, in most circumstances we are in broad agreement.

There can be no common defence policy at the present time since there is a wide difference of opinion about the role of the Americans and the relationship of a European defence policy to the North Atlantic Treaty Organisation. Nor is it very probable in the near future that circumstances can exist in which a common currency can be introduced. However, that does not mean that the aims are not desirable and that we should not support them.

What has changed since the signing of Maastricht last year has been public opinion in France and, to a lesser extent, in Germany. In my judgment much of what is contained in the Treaty will not happen.

What would be very relevant would be a vote against the Treaty. The consequences of such a vote would be extremely grave for this country. There is no doubt that our partners are becoming increasingly frustrated with what they see as the long period of time which we have taken in making up our minds. I am sure that they would go ahead without us and that we would be marginalised. We would have very little input into the future of Europe except for sitting on the sidelines, to be overtaken by events, unable to shape the Community's future and possibly not all that much of our own. No responsible person should risk that situation.

Her Majesty's Government have been pursuing sensible policies which are a pragmatic and gradualist approach, based on what is practical. Those policies should be given time and the support of this House and the moderate, wise voice of Britain should be heard in the Councils of the twelve.

4.45 p.m.

Lord Ezra

My Lords, I am very pleased to be succeeding the noble Lord, Lord Carrington, in the debate. He has spoken to us very powerfully and convincingly, based on his wealth of practical experience in European affairs. I am sure that his remarks will profoundly influence the remainder of the debate.

I propose to restrict my own remarks to the economic and monetary aspects of the treaty. We should remind ourselves that the process of the creation of Europe, as Jean Monnet called it, has been going on for nearly half a century. It was launched by the Schuman Plan in the late 1940s, which led to the creation of the European Coal and Steel Community. It then led to the Treaty of Rome of 1957, to the Single European Act in 1986, and to the present treaty, which will certainly not be the last step in the process. Therefore, the matter must be seen in that evolving context.

During that period of nearly half a century the role of Britain, with its continued uncertainty as to whether it should be in or out, with or of, has been most regrettable. I was involved in the early stages with the setting up of the European Coal and Steel Community. The Government of the day, the Attlee Government, made a mistake in not joining. Mr. Hugh Dalton is reported to have stated: We have just nationalised the coal and steel industries. Let us not have them internationalised". In my opinion that statement revealed a misconception of what was happening in Europe at the time.

We were invited by Paul Henri Speak to participate in the Messina Conference which led to the Treaty of Rome, in 1955. Monsieur Spaak stated, unlike what was said at the time of the Schuman Plan, "There are no pre-conditions". At the time of the Schuman Plan we were asked to accept supra nationality. Monsieur Spaak said, "Come in and negotiate with the rest of us". We refused to do so. We paid a heavy price for that mistake because when we eventually joined the Community in 1973 much had been decided that would not have been decided in that form had we been a member from the beginning.

It is worth recalling those facts so that the same mistake is not repeated. We all agree that we are in the Community and that there is no question of going back on our adhesion to the Treaty of Rome or to the Single European Act. However, if we were to decide not to participate in the Treaty of Maastricht and in the ongoing practical process of creating Europe, we would be in a very serious difficulty. We would be committed to many principles, concepts and rules but their evolution would be in other hands and no longer in ours. That would be a very dangerous position to be in.

The noble Baroness, Lady Thatcher, emphasised that one of the most important recent developments within the Community has been the creation of the single market. Britain has played a very large part in that process. The noble Lord, Lord Cockfield, translated a broad concept into a practical reality. He identified 282 measures that were necessary to create the single market and to remove the non-tariff barriers. They were specified in 1985. There are now only 18 of those measures that have not been carried through and, of the agreed measures, 72 per cent. have entered into national law in the various countries of the Community. That is a great achievement.

From the point of view of Britain the creation of the single market is a vital development. More than 50 per cent. of our trade is now with the European Community and that trade will grow. Reference has been made to the fact that our trade balance has suffered since we joined the Community. It has not suffered due to the elimination of barriers but because we have lacked sufficient competitive industrial capacity in our own country. That is something that many noble Lords have been pressing for over the years. There are only two solutions to the problem of our trade deficit with our trading partners in Europe. We must either become more competitive with a larger industrial base or we must re-erect trade barriers. There is no other solution. I am sure that nobody in this House would wish to see the re-erection of trade barriers.

Not only is this an important trading area for Britain, but it has led to a massive degree of inward investment in Britain as a way in which third countries can enter the European trading area. It is the fact that of the total industrial investment in the United Kingdom in the past five years, 19 per cent. of it has come from inward investment. It forms a very substantial part of our total industrial investment and is due to the fact that we are a leading member of the European industrial community. It is also due to the linguistic advantages for the countries which invest here and to the fact that they can have faith in the conditions in which they can operate in this country.

If we were to weaken our connection with the Community, it is obvious that that massive inflow of investment that leads to so much employment in Britain, would be threatened.

When looking at the single market we must face the fact that we are living in a competitive world and that competitive pressures are building up outside. Within the whole American continent a single market is being created. We know what is happening in the Pacific area. Therefore, it is incumbent upon us, as a country which has been a prime mover in launching the single market, to see that it goes from strength to strength. I believe there are ways in which this can be achieved. I do not think we can stop simply at the removal of tariff barriers, as were originally removed by the Treaty of Rome, and then of the non-tariff barriers which have now been removed as a result of the Single European Act.

We must also think carefully about convergence; that is, the convergence of the economies of the member countries. I remind your Lordships that the concept of convergence is a British one. I was involved in discussions in the CBI 10 or 15 years ago about what was then known as EMU; economic and monetary union. Even at that date we were discussing that concept. We were then arguing whether EMU should be imposed to start with in the hope that as a result of that imposition countries' economies would come closer together, or whether economies should first converge before we moved to EMU. The British view, which has prevailed in the recent Maastricht negotiations, is that we should have convergence first. That is written into the treaty. Therefore I fail to see why, if there are any criticisms of that concept, they should emanate from this House and indeed from this country. What I believe could be done now in the light of the prolonged recession through which Europe has been passing is to revise the criteria for convergence. However, I have no doubt whatsoever about the necessity for working towards convergence to strengthen the single market.

There is another aspect that I believe needs careful consideration, and that is the relationship between the various currencies of the Community. Reference has been made over the years to the important Select Committee on overseas trade over which the noble Lord, Lord Aldington, presided in the mid-1980s. I was a member of that committee and I remember that all the industrial representatives who came before us emphasised one key issue and that was currency stability. They felt that one of the big impediments to the development of our trade was a variable currency. I am not talking about the level of the currency but its stability. If we are to endeavour to build on the strength of the single market we should also find ways in which that stability can be achieved. There are proposals to this end in the Maastricht Treaty but these should also be subject to review.

We need to look at our great achievements as Community members and in particular the achievement of the creation of a single market. We should look forward to building on that in a way which would take account of the deliberations leading up to Maastricht but perhaps would review a number of them. I feel that the role of Britain from now on must be to ensure that we have an integrated outward-looking market subject to democratic decision-making processes. That is the formula we should go for and we can best achieve that by remaining within the Treaty of Maastricht rather than outside it.

4.53 p.m.

Lord Wilberforce

My Lords, I fear my speech will be in the nature of a sorbet interposed between what I can only fairly call the pieces de resistance which have preceded me and the—one hopes—delicious soufflés which are to follow. My speech will be of a modest character. I shall not talk about EMU or the Social Charter or the great issues of foreign policy. Those matters have been admirably covered already by the two speakers who have just preceded me. My own observations will be directed to those, both in this House and outside, who consider that this Treaty of Union is a step of vital constitutional importance for the United Kingdom because, so it is feared, it will alter our laws, our legal system, our conventions and our sovereignty in a radical manner and in a manner that is so radical and so over the top—I hope I may borrow that phrase—as to call for rejection, or at least exceptional treatment.

There are undoubtedly many such thinkers, both in this House and outside. Although most of your Lordships will be familiar with the arguments against the measure, I venture to repeat some of them as other noble Lords may have received, as I have, an extraordinary number of letters from members of the public expressing in dire terms their feeling that this Maastricht Treaty will undermine in a fundamental way the institutions to which they are attached.

I shall confine my remarks to the broad issue of legislation by Brussels; the impact of that legislation upon our sovereignty; and the impact of that legislation upon our institutions. The argument is a fairly simple one, and I speak to a sophisticated audience. Therefore I need not elaborate too much as much of what I wish to say has already appeared in other speeches. I simply wish to underline my main points.

It was Article 2 of the European Communities Act 1972 which made European legislation part of UK law. The vital article which people do not always have in mind is Article 189 of the Treaty of Rome which states that a regulation shall be binding in its entirety and directly applicable in all member states. It has been said by an eminent professor at Cambridge that the word "in" could have changed the course of European history, having terminated the sovereignty of the British Parliament and the supremacy under the constitution of the other national parliaments. The professor expressed those thoughts soon after the article appeared.

This situation was soon perceived by the European Court of Justice in Luxembourg. It was not long before that court made a number of decisions which stated that European law was now a separate legal order taking precedence over the laws in individual member states. The situation was perceived by lawyers in this country and in this House. In 1972—only 20 years ago—a group of us were consulted on this point and we had no difficulty in saying that UK law was henceforth to be subordinated to European law and that the precedents lay in Luxembourg. The position was, of course, emphasised in a much more picturesque way by my noble and learned friend Lord Denning. He illustrated the position and gave it life through the use of a number of picturesque metaphors.

The position was appreciated by our courts. Soon after 1960 a number of decisions were made—I shall not bore your Lordships by recounting them—which accepted the supremacy of European law even over our statutes. Other countries in the Community appreciated the situation, even those with written constitutions who have much greater difficulty than we have in accepting the supremacy of Community law. Some of those countries, for example Germany and Italy, still have difficulties with the concept and have not yet overcome those difficulties.

At any rate all this was well established when we entered the Community in 1973. It must be taken to have been understood by informed people in 1975 when the referendum was held, even if the media did not take pains to point it out.

I turn from the European Communities Act 1972 to the Single European Act which was debated here on 31st July 1986 just before the Summer Recess. The noble Baroness, Lady Young, who introduced the Bill stated that it was not giving "new areas of competence". The Act made some references to action as regards the environment and research, but it did not extend the competence of the legislation in Brussels. As the noble Baroness said, it made majority voting possible in a number of areas.

It is worth bearing in mind that the word "union" was used conspicuously in the Single European Act. One or two speakers have mentioned that fact, in a rather throwaway manner, but let us see how prominent it was. The Act used the words: to transform relations as a whole among their states into a European Union", and also: resolved to implement this European Union and to invest this Union with the necessary means of action". Therefore, I am a little surprised that it is thought that the reference here to a union is creating a monstrous new creature not seen or heard of before.

Let us not be misled by the word "union" any more than one should be misled by the word "federalism". There are all kinds of unions all over the world. There are close ones like that with Scotland, loose ones like the Western European Union and any number of contractual unions. There is the Union of European Women and the International Union for Research into Emigrant Insects. The world is full of unions, some of which are strong, interesting and important and some of which are more recreational.

The word "union" appeared throughout the Single European Act. All those concerned took very careful note of that and of the extensions contained in the Single European Act. Your Lordships may remember the speech of my noble and learned friend Lord Denning, which he made from just in front of me on these Benches, in which he threatened us with all kinds of dire results if that Act were carried. He said that our sovereignty would be seriously eroded and that Acts of Parliament would be and had been held invalid. Noble Lords may remember his reference to the dolls which are used in certain social work circles for checking on child abuse. My noble and learned friend said that the Single European Act would be a further step towards federal union. Very soon afterwards the Select Committee, to which the noble Lord, Lord Boston of Faversham, rightly referred, stated that the powers of the United Kingdom Parliament would be weakened by the extension of qualified majority voting and drew attention to the cases in which that would be so. However, we passed the Act. It was guillotined in the other place and it was passed here in a single day's debate, and that was that.

I believe that the situation was never better put than by the noble Lord, Lord Rippon, when speaking in another place. He said that European union is not about some Utopian plan for a European federation but about how best we can, step by step, realistically bring about the aims of the Community. Those were wise words and they are applicable today.

The Single European Act was a logical step from the Treaty of Rome. I suggest to your Lordships that the Maastricht Treaty is a logical step from the Single European Act. It is certainly an extension and a forward move. Of course it is a forward move: we do not want to stop still or to go back. However, I suggest that it is not a revision in a constitutional sense.

Those who are opposed to the treaty have an argument concerning the Single European Act, which we have heard deployed eloquently today, to the effect that the Single European Act is acceptable and we agreed to it in the interests of having a single market, but afterwards it was misused for further centralisation in the direction of "Brusselosis", "Delorism" and it finally burst out in the Maastricht Treaty. It is argued that it is true that the Government managed to have the word "federalism" removed, but the substance remained and we are now faced with a greatly extended centralised organisation.

One has to agree that there is something in that argument. There were some excesses after the Single European Act. There were abuses by Brussels. In the two years after the passing of the Single European Act our Select Committee expressed the fear that the Single European Act was being interpreted too widely. Indeed, the noble Baroness, Lady Serota, wrote to M. Delors in 1989 recording our concern in that respect and in particular that the new Article 100A was being used for environmental and consumer protection and to extend the realm of Brussels. However, whatever the situation after 1986, I believe that far from carrying that process further the Maastricht Treaty has checked or at least stabilised those tendencies. I was very glad to hear the noble Lord the Leader of the House make that point in his opening speech.

I believe it to be generally fair to say that the new express powers given to the European Community by the Maastricht Treaty are definitions and codifications of powers which the Council has been exercising under the general articles (Articles 235 and 100A) already in the legislation in relation, for example, to environment, energy research and consumer protection. In that respect it must be beneficial as diminishing the discretion of Brussels and setting down the position in black and white. As the Select Committee stated: new express powers are to be preferred to the old implied powers which were left as a matter of judgment as to what was 'necessary' to achieve a Community objective". One can argue about the balance between those matters which should be entrusted to majority voting and those which should be kept for unanimous voting. That issue has been argued at great length by our representatives at Luxembourg, Maastricht and Edinburgh. The best that they could achieve is embodied in the Maastricht Treaty. One may disagree with some of the points and wish that other solutions had been reached, but that was a matter for negotiation and of judgment. We must accept the situation, assisted by the efforts of our Select Committee.

There is one small constitutional impact of Maastricht. It may well be the case that having those points in black and white in the Maastricht Treaty will result in a different attitude on the part of the European Court. As the noble Baroness, Lady Thatcher, said, previously the court was inclined to give an extended purposive interpretation of the Treaty of Rome because the treaty was drawn up in very general terms and extended the frontiers. However, following Maastricht everything is in black and white. One does not even have to look at the small print. It is all small print-133 pages of it. It may well be that in future the European Court may find itself much more engaged in scrutinising what is in the book rather than trying to find principles and purposes on which to extend its jurisdiction. However, perhaps we shall hear more about that later in the debate.

This is no doubt all very dry and legalistic stuff. After all, a desiccated lawyer is speaking. I shall merely make two brief points on that issue. First, the European Community is a legal structure, based on texts which have been worked out and worked over. Every word has been worked out by lawyers in successive drafts, under successive presidencies, and has been tested by lawyers. If we in the United Kingdom are to be at the heart or at the front—or whatever position one chooses—and if we are to be in the game at all we must be prepared to fight with legal weapons. Let us be sure that we have good lawyers at our disposal. We have—in the Commission, in the court and in the Foreign Office. Let us be sure that we take their advice when we receive it. We can certainly more than hold our own.

Secondly, if we are clear as to the legal arguments, and I hope that we may be before the end of the debate, and if we take the view that there is no great constitutional quantum leap in this treaty, then we can debate the other issues in the treaty on their merits. Those are the great issues of the EMU, the Social Chapter, foreign policy and the home affairs pillar. We are having that debate.

I say no more about that, but I am convinced, and every speech so far today has carried my conviction further and no doubt other speeches will take it even further, that these are matters for parliamentary decision in accordance with our system of parliamentary democracy. If the occasion arises I shall vote accordingly.

5.10 p.m.

Lord Thorneycroft

My Lords, I rise for a very few moments to support the Government and the Prime Minister and to express my hope that the Bill will find its way on to the statute book in the foreseeable future.

I do not pretend that the Bill is ideal. I do not believe that anyone who has had the privilege of listening to my noble friend Lady Thatcher could have doubted that there were some drawbacks in the Bill. That is not altogether the point. The noble Lord, Lord Carrington, made an absolutely admirable speech and struck the right note. We are entering into a Europe that is developing and changing all the time. The question is: can we play a part in shaping that growth in development? I was encouraged by the speech of the noble and learned Lord, Lord Wilberforce. He gave an admirable, practical, commonsense view to some of the legal provisions. We are not yet defeated on all those points. It is not the time to quit; it is the time to go on. It is the time to see whether we can find friends in Europe, skills in this country, and ways in which we can make it a Europe far closer to the organisation that we want.

I recognise that we are divided. We have been divided all my life. I have lived through parliaments in which great divisions have taken place on foreign and trade policy. I have known all the time that this country wanted to protect its own personal, individual interest, and its pride in its parliament, its rights and authority, as the noble Viscount, Lord Tonypandy, once said. At the same time, as a small island, its people have wanted to look beyond these shores and to achieve some method for finding markets, trade and investment. If we cease to look beyond these shores, half the public in this country would have to leave. They would have no jobs. Winston Churchill once remarked, "There would be an awful lot of altercation as to which half". We have therefore to look outside this island; we have to look somewhere.

The noble Lord, Lord Carrington, referred to this matter in his speech. In my youth the Conservative Party in particular was attached to the concept of imperial preference. It wanted to find the answer there. Leo Amery used to fight a great battle. I remember that, having just returned from a General Agreement on Tariffs and Trade meeting—I was its first chairman—I attended a Cabinet meeting. I was told that Leo was moving such a resolution. I was asked what I intended to do. I said that I thought that we should oppose it. The Cabinet believed unanimously that I would be defeated, all except Winston, who said, "Let him try". He was a very great man and a very brave one. We did try. My noble friend Lord Aldington and I fought it out in the Blackpool Conference, and we won. Imperial preference was effectively buried. We moved over to a system of wider trade and payments, and the General Agreement on Tariffs and Trade—with all the enormous benefits that that has brought. I was very proud to have played a part.

Then in Europe we had the Schuman Plan. I was present, although I do not believe that I played a very distinguished part. However, I was brilliantly served by Sir Frank Lee, the Permanent Secretary. He was one of the greatest permanent secretaries a man could ever wish to have. I wanted to take him with me to the Treasury. I believe that history would have been a little different if I had managed that. However, I was not allowed to do so. There was a young man whose name ought to be mentioned because it is never known now. He was very young and junior, and was treated with not too great respect. I refer to Russell Brotherton. He was a brilliant civil servant. In so far as the light of European union was carried at all during that period, it was due to him.

I do not say that I was the only man at that time who stood for Europe. I dare say that one could find members of the Foreign Office now who favoured union with Europe. There was, after all, a massive case for such union on foreign policy. In my generation there had been two wars. As several speakers have mentioned in the debate, at least the thought of war in Europe in that way has disappeared. There was also a great case for trade.

We had those opportunities, but I failed completely. The forces against me were too strong. Under Anthony Eden, the Foreign Office was absolutely determined that we should not go into Europe. The noble Baroness is a Euro-enthusiast compared with Anthony Eden. We have the Single European Act and many other matters which Anthony Eden would not have touched. We could hardly get a hearing in the Cabinet at that time. I therefore make no apology: I failed miserably. I was a young, rather over-promoted (some people thought) President of the Board of Trade and Anthony Eden was at the peak of his powers. He was assumed to be, and was, the heir apparent to Winston Churchill. Therefore I could not achieve such a union.

Harold Macmillan played a magnificent part. He argued the case for Europe. In the early days he was Minister of Housing, and one cannot do much about Europe as Minister of Housing. However he was promoted to Chancellor of the Exchequer and eventually became Prime Minister. In so far as we had a European policy, it was due to Harold Macmillan; but he arrived too late. Europe was already being formed on terms which were rather more provincial and more bureaucratic than we would have wished. However, he did the best he could and we managed to achieve a Europe of some kind with us on the fringes. But the Europe that we wanted was not provincial and bureaucratic. The Europe that we want today, as we wanted then, is outward looking and pledged to the General Agreement on Tariffs and Trade—and we must fight as we always have. We have not lost the battle yet. The only way in which we could lose the battle is to lose this Bill. We must make an effort with it we must pull ourselves together and steel the forces hat we have. We are not without friends in Europe or new allies coming in. I believe that we stand a chance. If we fail, we shall do our best without it, but we may yet succeed.

I only wish to say one thing in conclusion. We are not dealing with a lot of Committee points. Underneath and behind all this there is an enormous issue of principle. People talk sometimes on public platforms about unemployment and the recession; they are the terrible, great problems which confront us at present with young men who cannot get jobs and young men who are losing jobs. I sometimes listen and wonder what people will do about them.

There are only two things that can do anything about it, one of which is the General Agreement on Tariffs and Trade, to maximise the trade between us and other countries. The other is the huge area of Europe which may not have been as successful as it might have been in the past—and the noble Baroness is perfectly right—but it is still an enormous potential market force. We cannot throw it away, we cannot abandon it at this moment. Therefore, I move that we accept the Bill.

5.21 p.m.

Lord Jay

My Lords, not every speaker this afternoon has said a great deal about what is in the treaty and the Bill. I shall start, therefore, by saying that, if the Bill were rejected, the United Kingdom would still be a full member of the EC. We should still enjoy tariff-free entry for UK goods throughout the whole EC and EFTA areas and we should still be members of the European Economic Area, the wider free trade group of countries which now exists and includes EFTA. Therefore, all the talk about the rejection of the Bill and the treaty landing us in an economically isolated off-shore area, losing inward investment and so on, is pure fiction. It is much to the credit of the Japanese car companies that they have had the common sense to say that it makes no difference to them whether or not Maastricht is ratified.

Indeed, even if the Bill took us out of the EC and we rejoined EFTA, we should still be members of the European Economic Area. We would enjoy virtually all the benefits of tariff-freedom throughout the area and the single market without, incidentally, the heavy burden of the common agricultural policy on our food prices and labour costs, which have followed our EC membership and been the main cause of the emergence since 1972—and it is only since then—of a trade deficit in manufactured goods.

However, that is not what the treaty and the Bill mean. What they mean is adding a whole series of new and major steps—of course, they are adding them to something—towards a new unitary super state. Those who deny that do not understand what is in the Bill or what is being proposed at present by the continental governments. For example, the treaty's protocol on the third stage of economic and monetary union states that the high contracting parties declare the irreversible character of the Community's movement to the third stage of … Monetary Union". Dr. Kohl himself has added, to put the matter beyond doubt: An economic union will survive only if it is based on a political union". In fact, the treaty massively and indisputably expands the powers—of course, it is extending something that is there already—of the EC institutions and transfers them away from the British Parliament without the agreement of the electorate, on a large number of issues from social policy, for example, right across the field to culture, which is now included.

First, the treaty establishes a European Union, as we know, which: marks a new stage in the process of creating an ever closer union among the peoples of Europe". That is to say, it is only a stage to further changes later on. The word "union" is plainly used—of course, there are many unions—in this case in the sense of the union of the United States of America or of the Soviet Union. Interestingly enough, the drafter of the treaty in his first few sentences almost verbally copies the first sentences of the constitution of the United States in 1787. I would quote both of them if there were time in this debate.

Secondly, the treaty establishes a citizenship of the new super state. Although Article B of the common provisions section of the treaty only speaks of the "rights and interests" of the citizens, when we read the small print later—and it is worth reading—we find in Part Two, Article 8, that citizens of this union: shall be subject to the duties imposed by the treaty. The duties, incidentally, which we are imposing on all British subjects, are nowhere expressly defined in the treaty. So, apart from anything else, if we ratify the treaty as it is, we are imposing on all British subjects duties about which they know nothing because they have been neither consulted nor informed. One may say that it is innocuous to do that with rights, but surely it is rather different when one is imposing duties.

Next, the treaty takes us a giant stride from what was always supposed to be—and we have heard a great deal of that today—a purely economic arrangement into foreign policy and security. The Foreign Office popular guide to the treaty tells us that the EC discussions and decisions on foreign policy will be: on an intergovernmental basis without the Commission or the Court of Justice having the roles they enjoy under the Treaty of Rome". Again, however, if we read the treaty we find that in Article J.9: The Commission shall be fully associated with the work carried out in the … foreign and security field". The Commission alone, of course, even under this treaty, can initiate legislation. The noble Lord the Leader of the House was plain wrong today on the issue. He did not appear to know that those words were in the treaty.

Then we are told that the dangers of all that will be lessened by the principle of subsidiarity. Again, if we look at the treaty, the effect of that is drastically limited by the opening words: In areas which do not fall within [the Commission's] exclusive competence", then all the rest follows. That means that there is no subsidiarity where the EC claims exclusive competence. That leaves matters very much as they were before we had the principle of subsidiarity, especially as no one now knows how the Court of Justice, which is itself bound by the amended treaty, will interpret the further words: only if and in so far as the objectives of the proposed action cannot be … achieved by the member states". However, when we come to the massive transfer of economic sovereignty to the new union, the language of the treaty is much clearer and more emphatic: A European System of Central Banks … and a European Central Bank … shall be established", and the objective will be the establishment of economic and monetary union ultimately including a single currency. Although the UK has rightly opted out of the third stage beginning in 1999 with the single currency, we shall be bound by those words as well as by Stage 1 and Stage 2, which begins in January 1994, and so be subject to intense pressure to converge, and first and foremost to rejoin the disastrous ERM. It will then be argued that by this treaty we have accepted in principle economic and monetary union, the single currency and the central bank.

The European Central Bank will start operating in 1996, when it takes over from the European Monetary Institute, which precedes it in 1994. The European Central Bank takes over the gold and foreign exchange reserves of the member states. It has the exclusive right to issue notes and to control interest rates and monetary policy. It is bound not to take instructions from anybody but itself. Its 15 members will be exclusively: persons of recognised standing and experience in monetary or banking matters". So in this modern Utopia we are all to be governed not by philosopher kings but, it seems, by unaccountable banker kings. The golden rule expressly laid down for those banker kings will be to maintain price stability and sound finance, with no reference whatever to employment or output, but only to the notorious and unworkable strait-jacket of fixed exchange rates, a budget deficit of only 3 per cent. of GDP, a public debt of 60 per cent. of GDP and a rate of inflation (so-called) of only 1 per cent. above that of the three best performers.

Those criteria would mean in practice that they were rarely carried out and thus enforced by bankers, extreme deflationary policies, and, in the light of all 20th-century experience, very high unemployment throughout every country submitting to them. The ERM has been merely a foretaste of it. In the UK's two years in the ERM our unemployment rose by over 1 million to its present 3 million. Under the present banker-led deflationary policies of the ERM there are now 3 million unemployed in the UK, in France, in Italy and in Spain, and 17 million in the whole EC; and the rate is still rising steadily in the first year of the single market.

On top of all that the treaty tells us—some noble Lords may have missed the joys of this if they have not read so far—that many of the economic edicts are irreversible and irrevocable. For example, it speaks of irrevocably fixed exchange rates. That to me is the language of Marxism, where one was always told that everything is irreversible and irrevocable.

Surely one precious virtue of the British Constitution—and I hope that the noble Lord, Lord Blake, will agree with me on this point—has always been that what Parliament does it can undo. Imagine if, instead, M. Delors had descended from the mountain with his tablets of stone and told us that the poll tax legislation was irreversible. Indeed, the Government are even reversing legislation (in the field of criminal justice) in the very Session in which it came into effect.

Irrevocable or not, to hand over control of economic and social policy to a group of unaccountable bankers is as if one were to give the chiefs of staff the power to declare war; or indeed the Board of the Inland Revenue the power to decide rates of taxation, which I do not believe noble Lords opposite would wish to do. When one transfers those powers to bodies outside the country, of course it amounts to a sweeping transfer of sovereignty from the electorate, from the people. Taken together with all the other transfers of power—and I agree with the noble and learned Lord, Lord Wilberforce, that there were plenty in the two previous treaties—this treaty, if carried out, would leave this country no longer a fully independent self-governing nation.

Even so, all this, as the treaty says, is only a stage —the treaty says "a new stage"—and a step towards the creation of a new superpower with a strong centralised government. It is widely recognised as such on the Continent, where the next step in centralisation is being eagerly prepared now. We deceive ourselves if we deny that.

What after all (the question is seldom asked) is the purpose of the whole of this vast bureaucratic centralising operation? That question always takes me back to listening to M. Jean Monnet in the long conversation expounding his plans in 1953 and again in 1962. For Monnet and his disciples only one thing mattered; namely, the avoidance of another Franco-German war. That was to be achieved by "tying down" (that was the expression then) Germany in a new centralised state which M. Monnet and his supporters thought could best be done by disguising it all at first as a technical and economic experiment. Fear of a resurgent Germany was the basic driving force of the whole operation; and it still is today. The motive was a worthy, perhaps even noble, one. But the practical assumptions on which the remedy was based were, I have always suspected, highly questionable, if not wholly mistaken. First, the rise of a new militaristic dictatorship in Germany has been one of the least likely turn of events in the post-1945 world. Secondly, if such an aggressive German dictatorship were to emerge, do we really think that it would be deterred by a paper treaty (a scrap of paper) or any sort of bureaucratic strait-jacket? Arguably therefore the whole of M. Monnet's experiment, well meant as it was, was either unnecessary or futile.

The further irony of it all is that, just as Hitler (which is what was feared) was brought to power by a rise in German unemployment from 1.5 million in 1939 to 6 million in 1933, a new extremist Germany, if ever it came about, would be likely to be produced by exactly the heavy unemployment which the policies now enshrined in EMU and the extreme deflationary policies of the Bundesbank would be most likely to generate. The creation of a new superpower, on the evidence of history, is no guarantee of peace.

Yet all of us know (I believe that there will be agreement on this point) that what the majority of the British public want—and every poll shows it—is not a new superpower, but close political and economic relations with all the countries of Western and Eastern Europe, combined with the retention of last-resort independence as a nation in our own hands. The British people want to govern themselves. For that reason, in my judgment, Parliament has no moral or other right to deprive the British people of their existence as a fully independent self-governing nation without even genuinely consulting them. The issue now before us is that of a far greater constitutional change, taking the three treaties together, than the reforms of 1832 or of 1910–11, which required two general elections conducted on the specific issue of those reforms. It is not the sovereignty of Parliament that is now at stake, as so many people have said. It is the sovereignty of the people. Parliament only has legitimacy and authority because it is representative of the people. John Locke put the point in rather illuminating words: The legislature cannot transfer the power of making laws to any other hands. For, it"— the legislature— being but a delegated power from the people, they who have it cannot pass it to others". We all know that this issue was hardly discussed at all at the last general election. In my view therefore the case is overwhelming here, as in so many other countries, for a full, popular referendum in which the British people are told plainly and honestly what is the real choice before them.

This House—rightly, I believe—claims, among other things, to be the guardian of the constitution. In hard fact nothing could raise its reputation higher with the British public than if this House insisted that the people must be directly consulted before this treaty is ratified.

5.41 p.m.

Lord Parkinson

My Lords, in the spring of 1972 I was invited to go to Germany and speak in six cities about the British attitude to the Community. I was invited as a new Member of Parliament and I chose the subject, which had a certain novelty at the time, of losing an empire and finding a role. I promised myself that during the summer I would write my speech. But the morning came when I was due to fly to Germany. I got on the aeroplane, produced my notepaper, and started to write, at which point an American sitting next to me noticed the House of Commons paper, and said, "Are you a Member of Parliament?" I got off the aeroplane an hour later having lost the empire but not having found a role and facing the prospect of making six speeches throughout Germany.

The role that I envisaged for Britain was as a Member of the Community and as a staunch and vital part of the NATO alliance. My speeches were on that theme. Throughout the whole of my parliamentary career, as a new Member, supporting the original Act, campaigning for a "Yes" in the referendum campaign, supporting the Single European Act, and as a Minister in a number of departments going to Brussels to try to make the free movement of goods, people and services a reality, I retained my enthusiasm for the Community. I still do so. There were many reasons why I was enthusiastic but three in particular were important to me. They were touched on by my noble friend Lord Thorneycroft in his excellent speech. At the heart of them all was the ambition to create a truly common market within the European Community.

I believe passionately that the open trading system is the great guarantor of prosperity. It ensures that opportunity will become available to many peoples. The Community seemed to me to offer a chance for 12 large countries to work together within a framework and create a genuine common market based on real free trade principles. Then, using that as a working example of the open trading system in action, I hoped that the Community would become a great force for good in the wider world, showing that the principles of free trade worked and that the Community as a working model was one which should be emulated and supported. Finally, I hoped that the Community of the Twelve would become a much larger Community; that it would not become exclusive; and that it would spread throughout Europe. It always seemed to me very pretentious for 12 countries to claim the title of "The European Community" in a continent which included many more than 12 countries.

I have not changed my attitude to the Community at all. But I still have very substantial reservations about the treaty which we are in the process of ratifying. I should like to explain why to noble Lords.

It seems to me that we need not speculate about whether economic and monetary union, a single currency and a single central bank will be good or bad for us. We do not need to speculate. We do not need to stare into the crystal ball. We have already had experience. The ERM is the first step towards monetary union and it has failed us twice already.

We joined it informally in the late 1980s. We tied our economic policy to Germany's. The Germans at that time were in or beginning to be in a recession; they needed lower interest rates. We were in danger of overheating our economy; we needed high interest rates to cool it off. We took our interest rates down; and the recession, the overheating, the deficit and the problems with which we have been coping for a number of years now stem from that decision to follow the policies which were right for Germany at the time when they were wrong for us.

In 1990 we joined the ERM. Germany shortly afterwards re-unified and for its own good reasons —I do not criticise the Germans for it—needed high interest rates. We were in a recession. We took our interest rates up, sustained them at a higher level than was needed and prolonged and deepened the recession. Once again, what was right for Germany was wrong for us.

We need not speculate either about a single currency and a single central bank, and the dangers of adopting both too soon. We can look at East Germany. There is a working model of 18 million people who are part of a country that is the strongest country in Western Europe and who have adopted a hard currency and imposed it on a weak economy. We can see how the policies that were good for western Germany have caused chaos in eastern Germany. We can see the dangers of adopting a single currency before one is ready for it.

Eighteen million East Germans have caused enormous damage to the West German economy. But even more important from our point of view is that they have also wrecked the ERM and shown the dangers of the sort of policy that this treaty envisages becoming the norm for all the countries of Europe. If 18 million East Germans can wreck the first step towards economic and monetary union, how are we to cope with Greece, Portugal, Spain and southern Italy, in all of which the standard of prosperity has to be raised to the level of the highest before there can be monetary union? Who will provide the resources which will be needed for transfer to the poorer countries? Certainly the poorer countries are enthusiastic about receiving them. But I have not heard anybody in the more prosperous countries explaining to their peoples that they will be the ones who have to fund that transfer. Therefore economic and monetary union, which are at the heart of the treaty, offer the potential for being divisive and disruptive and creating disillusion rather than harmony within the Community.

The Community is becoming, by the detailed structure which it has set up for itself, ever more exclusive. It is almost impossible to envisage any countries other than Austria, Sweden, Norway and Switzerland (which turned down the opportunity) qualifying for membership. I have taken part in discussions in the Community in which it was agreed that there could be no question of taking into the Community in the foreseeable future any country which will be a dependant and not a contributor. By its nature, the more tightly the Community draws itself together, the more exclusive it makes itself and the less it has the potential for becoming a truly European Community.

Again, as the Community develops in the way in which the other 11 members want—with identical wages, hours of work and social provision—the whole concept of comparative advantage, which is at the heart of the open trading system, is being abandoned. The argument is that we cannot trade with each other unless we have the same wages and social conditions. But where does that leave the rest of the world? I see the treaty as a major preparation for trade wars and protectionism. I do not see it as a step towards an open trading system and internationalism.

Finally, I judge the Community by its actions and attitudes. It has not been the great proponent of the open trading system which my noble friend Lord Thorneycroft outlined in his extremely moving speech. It has been a major break from the movement towards free trade. At the moment the agricultural policy—that ultra protectionist device which is the jewel in the Community's crown—is being used as a way of preventing the completion of the most important trade round into which the world has entered; that is, a round in which we are going to extend to trade in services and agricultural products the rules which have been so welcome and helpful in the field of manufactured goods.

Even the most enthusiastic supporters of the treaty say—my noble friend Lord Carrington in a splendid speech made the point—that much of it will not come about in the foreseeable future. It is a bad basis for signing a treaty when one's basic motivation is that one does not believe that it will be implemented. There has never been a case of a European Act being put on the statute book which has not been interpreted far more broadly than those who signed it originally expected. The Single European Act was a case in point. Yet we are signing an infinitely more fundamental and radical Act in the vain hope that it will not be implemented. That is a very unsatisfactory way in which to proceed.

5.54 p.m.

Lord Howe of Aberavon

My Lords, it is my privilege and duty, on behalf of the Whole House, to offer congratulations to my noble friend Lord Parkinson on the speech which he has just made. It was a speech as eloquent as we have come to expect and, if I may also say so, as unsurprising as I have come to hear. He was not the first former chairman of the Conservative Party to speak in the debate. He was preceded by my noble friends Lord Carrington and Lord Thorneycroft, each of whom made splendid contributions to our proceedings.

I am sure that my noble friend Lord Carrington will forgive me if I pay an especially warm tribute to the contribution made by my noble friend Lord Thorneycroft. I was brought up, from the days when I first thought of going to the Treasury, to have overwhelming admiration for my predecessor as Chancellor, my noble friend Lord Thorneycroft. By his resignation in 1958 he proclaimed himself immensely sound on money. I know that my noble friend Lady Thatcher joins with me in expressing that admiration for him. However, my noble friend Lady Thatcher and I part company when I go on to say that I also regarded my noble friend Lord Thorneycroft as being immensely sound on Europe as well.

There is a great difference between the world in which my noble friend Lord Thorneycroft fought so valiantly for our early accession to the Community and the world in which we live today. The world in which we live today makes common assumptions about the shape of the world economy and the nature of its key players. One of the most important key players is that which we know as the European Community—the Community for which my noble friend Lord Thorneycroft worked so hard.

There are assumptions made in regard to the membership of the Community—a Community playing a part not just in trade, but also in the search for partnership and foreign policy. It is a Community playing a part in creating a world in which a single European currency can find a place. It is assumed that within that Community Britain's position is to be taken for granted. True, we were not founder members. But at least since 1962 we have been committed, under the leadership of six Prime Ministers starting with Harold Macmillan, to effective membership of the Community. If those countries around the world were to be told that there was a serious risk that our country intended to diminish its commitment to the Community, they would rub their eyes in disbelief at such a resurgence of national eccentricity, hardly capable of believing that we were once again going to make the mistake of failing to see and understand where our true interests lie.

What are they to make of this debate? Is the Maastricht Treaty really to be seen as wreaking a disastrous change in Britain's relationship with the Community? Why? How? It was negotiated on the basis of a mandate overwhelmingly endorsed by Parliament before and after negotiation; it was overwhelmingly endorsed by Parliament before and after a general election in which, for better or for worse, ratification was common ground for all parties.

My noble friend Lord Thatcher—

Noble Lords

Oh!

Lord Howe of Aberavon

My Lords, my noble friend Lady Thatcher—I hesitate to quote Lord Dicey on that—commented on the fact that the treaty was endorsed by less than half the House in the other place. That is not necessarily of huge constitutional significance. My noble friend will remember that the Bill to enact the war crimes legislation, which was forced through this House against its will, was similarly endorsed in the other place by less than half the House.

The point is that the treaty has now been endorsed not just by some member states, but by every one of them. One is driven to ask why the treaty is so wrong. What can possibly justify the ferocity of the opposition? Most important of all, what is the alternative? If we reject it, what will be the basis of Britain's relationship with the Community? How will that relationship be achieved?

To the first question two answers are suggested. First, that Maastricht and the European Community thereafter poses new, special threats to sovereignty which justify the impassioned speech of the noble Viscount, Lord Tonypandy, in which he was saying thus far and no further. But I was struck by an observation made by Judge David Edward of the European Court in Edinburgh last autumn when he said: If sovereignty is about statehood, then the statehood of the member states is not in issue. If sovereignty is about powers, then powers are already shared. If sovereignty is about practical independence, then no state in Western or Eastern Europe can claim to have it". So I do not believe that that argument is decisive.

Then it is said, looking at it in retrospect, that some years ago we took a disastrously wrong turning in the Single European Act. Even my noble friend Lady Thatcher has deployed that case. But four years ago, four years after the Single European Act, she and I worked together to produce the Conservative Party manifesto with which we fought the 1989 European elections. Four years after the Single European Act, 14 years after we together got on the train under the leadership of Edward Heath, and 36 years after the quote from Winston Churchill which appealed to my noble friend Lord Tonypandy, times have changed. In that manifesto of course we endorsed the Single European Act specifically and wholeheartedly and we went on to do so in the context of this statement: An active and wholehearted approach to the Community has breathed new life into our partnership with our neighbours. Our present and our future lie with them". How come the change between then and now? The truth is that the opponents of Maastricht are now declining to accept the common institutions, the common European Community law, the common European Court of Justice, which were part of the common ground which they endorsed even four years ago. The European Court of Justice is the same today as it was when my noble friend and I endorsed the Single European Act and took it through Parliament under a guillotine. But now today it is wrong apparently to strive for almost anything at a European level if that involves a conscious limitation on national self-government. The tragedy is that the Euro-sceptics have moved from practical politics to ideological purism and into a position which, alas, is now one approaching deep hostility to the essence of the Community itself.

The dividing line has returned to the same issue that divided this country two and three decades ago. I had a massive feeling of déjà vu as I listened to the speech of the noble Lord, Lord Jay, which appeared to me to be unchanged from those to which my noble friend Lord Rippon and I listened night after night after night after night during the passage of the European Communities Bill. The sadness is that the speech made by my noble friend Lady Thatcher was almost more fundamentalist than any of those to which we had to listen during that debate in 1972; almost more fundamentalist than any of those to which we had to listen during the passage of the Single European Act which I was glad to take through the House under her leadership.

The real question is this: does sovereignty depend upon our capacity to make rules in this national Parliament or upon our ability to maximise our influence as a nation in the world? It is easy for Robinson Crusoe to be "monarch of all he surveys"; it is much more difficult for him to persuade anyone else to take him seriously. How, if we now alone reject the Maastricht Treaty, are we to breathe new life into our partnership with our neighbours? And if we are not to do that, how else are we to manage this crucial relationship? How in particular are we to do that if this nation now commits the gross breach of faith that would be involved in repudiation of a treaty to which the Prime Minister and Foreign Secretary have put their names on behalf of this nation with the full authority of this Parliament?

What is to be our new position? And how are we to achieve it? Are we now to set about renegotiating a wholly new status? I see the noble Lord, Lord Callaghan, nodding his head at that question. He knows a thing or two about renegotiation within the Community. Are we to be in or out; or are we to be half-way between, still trying, as so often and so sadly, to go on having our cake and eating it?

Membership of the Community is not like membership of UNESCO, a kind of optional extra, in which our absence is, incidentally and crucially, fortified by the partnership of the United States. Membership of the Community is the status now being sought for its positive value by all our former EFTA partners and by all the central European countries. Are we now to pass them as they come on the way in, while we make our own way tragically to the exit? How can we expect to negotiate a better deal on the basis of repudiation of the treaty than ever we secured on the basis of participation? Just how far can we sensibly go on trying the patience of our "partners" and at the same time destroying all the influence we might hope to have as a partner in playing the game?

The case for Maastricht is the case for realism and modernity as opposed to the case for sentimental illusion. As Henry Kissinger put it 11 years ago: Only"— and I repeat "only"— as one of the leaders of Europe [can] Britain continue to play a major role on the world scene". To reject Maastricht would be to choose exactly the opposite: to become a less powerful country against the backdrop of a Europe which certainly would not be broken if we say "No". Euro-sceptics, alas, believe that we still have the power to halt the Community, to disintegrate it, by refusing Maastricht. That is the greatest delusion of all. Our Community partners, and the rest of Europe joining them, will go ahead without us in some form, at some time. To say "No" to Maastricht would be to ensure the destruction of our chance, in Henry Kissinger's words, of continuing, to play a major role on the world scene". When my noble friend Lady Thatcher and I wrote in that election manifesto four years ago that we were seeking an active and wholehearted approach to the Community, that such an approach had breathed new life into our partnership with our neighbours and that our present and our future lay with them, we spoke true words indeed. If they were true then, they are a great deal truer today, and I commend them to the House.

6.7 p.m.

Lord Sherfield

My Lords, having followed the discussions in another place and the debate today it is my intention to support the Government in the stages of this Bill through the House. And in the fewest possible words, but inevitably with a broad brush, I want to say why.

Between 1947 and 1952 I was closely involved, as an official, in the development of British policy towards Europe, from the Treaty of Paris, through the Marshall Plan, the Coal and Steel Community, Western European Union, and NATO, and again, between 1956 and 1960, with the failure of our negotiations for an industrial free trade area, the first French veto, the negotiation of EFTA and Euratom.

The Attlee Government, and incidentally their advisers, were criticised at the time by the Conservative Opposition, and even more strongly since by some contemporary historians, for failing to join the European Coal and Steel Community. But when the Churchill Government came to power, they proved even less enthusiastic about European integration than their predecessor. The reason is a simple one. Joining these communities involved a commitment to work for a federal Europe and there was then only a tiny minority of members of any political party for accepting such a commitment. That was natural. Commonwealth ties and Commonwealth trade were still strong. The sterling area was in operation. The first priority was to ensure that the United States remained committed to the defence of Western Europe and to the support of the European economy. I was certainly an Atlanticist at that time and I still am. But our close relations with the United States and Canada have not been affected by our membership of the European Community. I feel sure that they will continue to be close, though they may adapt to the changing situation on both sides of the Atlantic.

In practice we participated very closely in the working of the European Coal and Steel Community. Indeed, it would not have worked without us. Then in 1954 the six entered into negotiations for closer economic union at Messina at which we had a representative. But he was withdrawn and we left the six to draft the Treaty of Rome. I was in Washington at the time and I have never come across a valid explanation of the reasons for withdrawal. With hindsight, it was a blunder. I am not saying that an agreement which we could have accepted would have been reached. The agricultural issue would almost certainly have seen to that as it had already done in our efforts to negotiate an industrial free trade area in Europe. But we might have averted the worst excesses of the common agricultural policy. In the meantime we had negotiated EFTA—admittedly a second best —but a useful one, which has survived to come to terms with the EC.

As time went on the alternatives to our joining Europe faded. Commonwealth ties loosened. An Atlantic free trade area, once mooted, was an illusion. And we joined the Community. However, our economic and industrial performance deteriorated and we sank towards the bottom of the European league and lagged far behind Japan and the United States. So the prospects of our doing well on our own dimmed. Finally, we signed the Single European Act and then we came to Maastricht.

It is my impression that Maastricht was a high tide in the movement towards closer union in Europe. Since its signature—here I echo the noble Lord, Lord Carrington, with whose speech I very much agree—there has been an ebb in Germany, in France and of course in the United Kingdom. Now it seems most likely that it will in fact be modified in practice by interpretation and that the application of many of its provisions will be governed by the development of the concept of subsidiarity now enshrined in the treaty. Subsidiarity is a horrible word, but it has a respectable pedigree. Its basic meaning is clear. But of course there has already been a great deal of discussion, and there is already voluminous literature about its application and effect. I am sure that there will be more. But that is a matter for negotiation. It is a mistake to underrate the potential of subsidiarity.

I conclude that we must be in that negotiation, and to do so we must ratify the treaty as it stands. Historical analogues are dangerous, but I suggest that we are in the same sort of position now as we were at the time of the Messina conversations, only in a much more critical sense. Now we have certainly nowhere else to go. Like the noble Lord, Lord Jenkins of Hillhead, and the noble and learned Lord, Lord Howe, I have yet to hear a convincing case for an alternative. The world is coalescing into economic blocks and even if the Uruguay Round can be completed, as it really must be, the world will continue to coalesce.

There is a free-trade area about to be concluded in North America. There is likely to be one before long in South America. The countries of the Far East and Australasia are increasingly trading with each other and present a formidable threat to European trade. Our economic prospects do not augur well for survival on the fringes of an integrating Europe. Successive British governments have been accused of missing the bus in Europe. In my view, in the early stages there was not a bus at the door. Now we are on the bus, although possibly still a strap hanger, and we must not try to get off.

I am not in favour of a referendum. In addition to the case which has been made against it in principle, there is the consideration so well described by the noble Lord, Lord Jenkins of Hillhead, that votes in a referendum are likely to be swayed more by the opinion of the government of the day than by the merits of the question.

6.17 p.m.

Lord Pym

My Lords, now that technology has shrunk the world and made the whole of mankind interdependent, there are very substantial constraints on every nation's sovereignty. I believe that tendency will continue. A balance has to be struck between the conflicting demands of national sovereignty and international responsibility; the first of those being something people understand very well while the second is a new dimension at least in scale and scope.

The most dramatic current expression of this conflict or paradox is in the rise of nationalism which is so widespread and visible today. Nationalism is a human, natural emotion, but it is not by itself a basis for international policy in this now interdependent world.

It was never going to be easy to build supranational co-ordination in Europe because of the differences of culture and tradition among the nations concerned. In our own lifetime the very different experiences on either side of the Channel, particularly in war, have made mutual understanding between Britain and the rest especially difficult. The contrast between our parliamentary histories and practices is especially sharp. Nevertheless, we all share the awful horrors of two wars. They were quite enough to inspire all countries to find new ways of working together and agreeing never again to resort to war to settle their differences. That process was made easier by the Cold War, which provided a common enemy and made people realise that security is indivisible. The Cold War is over now, thanks in large measure to NATO which has been a triumph of international co-operation, providing a lesson that we must never forget.

Today we need to fashion with our allies a new foreign and security policy to meet the totally different threats and dangers that face us and we need to fashion with our partners a political and economic strategy that is commensurate with the challenges of new competition from the other side of the world. That can only be done on a continental scale and, at any rate for the next few years, Maastricht is the basis for it. Yes, of course, it is a compromise—what else could it be? The treaty is not exactly what we would have liked and other co-signatories feel the same, but John Major and Douglas Hurd negotiated a treaty that had all the features and attributes mentioned at the outset by my noble friend the Lord Privy Seal and which, obviously, I shall not repeat now.

In the months of debate on this Bill far more attention has been given to the critics than to the creators. "What are the critics' alternatives?" has been asked already. They have not got any. No other treaty is negotiable with our partners—it just is not available —and some kind of semi-isolation is clearly not an option. Indeed, a failure to ratify would do our business and commerce immense damage, with serious consequences for employment prospects, and the City of London would surely lose its role as financial leader.

We missed the boat in Europe before by standing aloof when we ought to have been involved from the beginning. That is the main reason why our influence there has not been as powerful or effective as it could and should have been. For goodness sake, do not let us make that mistake again. In my view, the sooner we ratify the treaty and occupy one of the centre seats of the Community in a really meaningful way, the sooner will British influence be exerting its full weight.

I think that there are three overwhelming reasons why British weight, in a European context, needs to be pulled hard at this time. The first is because the end of the Soviet empire has left the whole of central and eastern Europe in a state of appalling economic deprivation and much of it in a state of political chaos or anarchy. The rest of the developed world finds it difficult to imagine, let alone to grasp, this reality. Surely the aim of all Europeans should be to bring together all the distinctive and diverse attributes, resources and talents of our continent into a working association. That is a colossal task and it is something the British are good at.

The second reason is that the countries around the Pacific Rim are reacting to the technological revolution with such speed and expertise that they present a wholly new economic challenge to the Western world. If Europe fails to get its act together, we shall surely find out painfully what it means to be uncompetitive.

The third reason is because we are opposed to the concept of federalism. As my noble friend the Lord Privy Seal said, that is not the right way ahead and we must see that it does not happen. I should like to endorse wholly the most admirable speech of my noble friend Lord Carrington and the concept that he produced of the conceptual and pragmatic approaches. He is absolutely right.

This country took perhaps its most crucial decision of the century when it passed the European Communities Act 21 years ago. Since then we have had the Single European Act which was passed, as we have heard, with comparatively little controversy. Now we have this European Communities (Amendment) Bill. Apart from the debates on Maastricht in this House, another place debated it before the Prime Minister and the Foreign Secretary went to the final negotiations and again afterwards. It debated it before and after the election, and the Government had strong majorities on all occasions.

The passage of this Bill in another place has just been completed. Its opponents there did all that they could to frustrate it, and no one complained about that. It is the way of the House of Commons. But it has now passed the Bill. The Bill survived the sustained onslaught. We shall see of course, but I believe that your Lordships are of a similar mind. That would certainly be consistent with the decisions of this House on the European Communities Act and the Single European Act. I very much hope that we can make progress with our consideration of this Bill in a similar timescale as with the last two so that ratification is possible this summer, because I see much damage arising from delay. Apart from any other consideration, that is another strong point against a referendum.

After ratification, I hope that the Community will stop being so concerned about itself. I hope that it will stop being so egocentric and that it will become much more positive and constructive about the way forward for the whole of Europe. I am sure that we here in Britain have a major role to play there. To bring together the remarkable variety of nations that comprises Western, Central and Eastern Europe into some sort of harmony is a huge task, but surely that is the strategic objective. The European Community, working at its best and at its most effective, undoubtedly has a vital contribution to make towards that objective. But, in my view, it is even more important for its thinking and policy making to be outward looking, encompassing the whole of Europe and able to meet the formidable challenges from the wider world.

6.26 p.m.

Lord Cockfield

My Lords, what we have seen in another place and no doubt will see in your Lordships' House is an attempt to fight once again the battles that were fought and won and lost many a year ago. I hope that we shall soon be able to put this behind us and turn our attention to the more pressing problems of the British economy and of British society which have been too long neglected in these sterile arguments.

I have always said, and I repeat it again today, that the importance of the Maastricht Treaty has been greatly exaggerated both by its supporters and by its opponents. That is not a popular view because one thing that politicians thrive on is controversy and to deprive people of their grievances is the worst service that one can do for them. Nevertheless, most of the arguments which are now advanced against the Maastricht Treaty relate not to the treaty as it was finally signed, but to the earlier ideas which were in circulation at the time of the Rome Summit in October 1990. If I may be forgiven for saying this, that was the summit that led to the political assassination of my right honourable friend Mrs. Thatcher, now my noble friend Lady Thatcher, so that is the date.

The draft of the treaty was then modified, first under the Luxembourg presidency and then under the Dutch presidency. What was left was largely emasculated in the negotiations leading up to the actual signing of the treaty at Maastricht in the winter of 1991. It is in this sense that the Prime Minister's comment when he came back from Maastricht that he had won "game, set and match" needs to be seen. It would perhaps have been a rather more accurate description of the situation if he had said: A poor thing, but mine own", for what has finally emerged marks no great step forward. For the most part, it simply consolidates progress already made and there is little in it that could not have been done under the terms of the Single European Act. I have spelt this out in detail in debates in your Lordships' House previously and I do not propose repeating the argument again, but the treaty does bring out into the public domain many things which hitherto were done in private. It gives clear and legal status to many things that were done on an informal basis. It fills in a great deal of detail, and it avoids the need for a vast amount of subordinate legislation. On that basis, it is a useful treaty; it is a valuable treaty; and I believe that it is very important that we should ratify it.

There is no denying the fact that there exists a strong anti-European element in this country. One can call it by whatever sweet-smelling name one likes, but at heart it is essentially an anti-European sentiment. It is, I believe, very much a minority view, but the views are strongly held; they are sincerely held; and they are deeply entrenched. If one looks at the Cabinet minutes of 1962, which were recently opened, one can see how concerned then were the government of the day when the first decision was taken to apply to join the European Community. Those attitudes have their root in the fact that it is more than a thousand years since this country was seriously invaded. During that vast span of time, this country has developed a culture, a set of attitudes, an outlook and policies very much of its own. It has been cut off from the mainstream of development of thought and policy in continental Europe.

The English Channel—even the name is a significant one—has always been a psychological as well as a physical barrier. A gradual change in attitudes is taking place, but it is a traumatic process, and it is associated largely with the move from one generation to another. I agree entirely with what my noble friend Lord Carrington said about the difference between conceptualists and pragmatists, but I believe that there tends also to be a difference between generations.

One can, in fact, identify three generations: there is a generation which was born, which grew up, which acquired its ideas and its outlook, and which made its political reputation before we ever joined the European Community. People of that generation still hanker after Britain as it existed in Victorian times, and still exists in their imagination—a time when Britain really was great; when Britannia truly ruled the waves; when British industry dominated the world; when the absolute tenet of British national sovereignty was the hallmark of our independence and greatness. But of course it is only nostalgia: a figment of the imagination; those days have long since gone; they will never return. Even in this first generation there were people who were not cabin'd or confined within the accepted dogma of their generation. Harold Macmillan, who first applied to join the Community, was one such. My noble friend Lord Thorneycroft, who spoke so magnificently earlier, was another. So was Ted Heath, who took us into the Community in 1973.

We then have another generation of people who were born and grew up before we joined the Community but who have made their political careers only since we became members of the Community. They are torn between, on the one hand, their upbringing and the attitudes imbued in them in their formative years, and, on the other, the stark realities of our present predicament which they have to face in the political lives that they have chosen to live. I suspect, with respect, that our own Prime Minister is very much cast in that mould. Nothing else could explain an oft repeated ambition to be "at the heart of Europe" while at the same time opting out of some of the most important developments in the European Community.

I am not arguing whether it was right or wrong to opt out. That is not my point. What I am trying to do is to find a logical explanation for the way that people behave. In many respects, what we now have is a generation sitting on the fence with its head pointing in one direction and its heart in another.

Frankly, I have little hope that this, our present generation, will solve our problems. It is a complete delusion to suppose that increased integration in the Community will not go ahead: still less that it can be stopped. There are people in this country who argue —no doubt there are some in your Lordships' House —that what we really want is a free trade area, and that we need to develop the European Community in that direction. The European Community never has been just a free trade area. It is not today just a free trade area. It never will be just a free trade area. If we wish to remain a member of the Community, exercising a full and proper influence, we will have to accept that. If one cares to read the Act of Accession appended to the Treaty of Accession, one will find that clearly we are, in that treaty, committed to the policies of the Community, not just to a free trade area.

There is no doubt that the present atmosphere is influenced greatly by the recession through which we are now passing, or out of which we may indeed be passing. One sees that clearly if one looks back over time. When I launched the single market programme in 1985, that was a period of great faith in the future, a period of optimism, a period of economic expansion. It was a period of hope. As time has gone on, those hopes have faded. They still existed at the time when the Maastricht process was started in October 1990, but by the time it was finished and the treaty was signed, the storm clouds were already gathering. That, more than anything, explains the history of that period. From that point of view, perhaps the most important provision in the treaty is the provision that another intergovernmental conference will be convened in 1996. The hope is that by 1996 we, and the world as a whole, will be out of the recession, and, if we are, the world will look very different from how it looks today.

We will of course ratify the Maastricht Treaty. Of that I have no doubt. It is, as I have argued all along, a useful treaty but of little fundamental consequence. It dots the i's; it crosses the t's; and it sets out for all to read and, for those who will, to understand the policies to which the Community has long since been committed—indeed ever since Mrs. Margaret Thatcher, as she then was, signed with her own hand the Solemn Declaration on European Union at Stuttgart on 19 June, 1983 which committed the Community and this country to economic and monetary union, to social policy, to economic cohesion and to a host of other matters she and her supporters, I gather, now oppose.

I have a copy of the Solemn Declaration. I shall not read the whole of the document, which is a most fascinating one. However, I shall quote one or two passages from it. Mrs. Thatcher and the Heads of Government committed themselves, to create a united Europe". That, if I may say so to the noble and learned Lord, Lord Wilberforce, predates the Single European Act. They were determined to work together, to promote… the European Social Charter"— I wondered where the term "Social Charter" had come from and found that to be the origin—and to develop, a European Social policy", to consolidate progress, towards European Union in both the economic and political fields". My noble friend Lady Thatcher is much more radical than me. I always argued—and I was unpopular in the Commission for doing so—that we ought to complete the economic agenda and leave the political agenda for a future generation. But here we have my noble friend wishing to consolidate progress towards European Union in both the economic and political fields.

Under the banner of "development of Community policies" they stressed the importance of—and I pick out five items— convergence of economic development; effective action in the social field; consolidating the EMS", and making progress towards Economic and Monetary Union; the development of an industrial strategy at Community level", which I am sure will be of great interest to the noble Lord, Lord Benson, who has a Question on that point on the Order Paper tomorrow. I hope that the Government will have read the Solemn Declaration before producing the Answer—they will be some of the first people who ever have read it. Finally, they stressed the importance of, The development of the regional and social policies of the Community… in particular the transfer of resources to less prosperous regions". On a purely personal note, which has nothing to do with what I am saying, we do not reach the internal market, as we then called it—that is the Single Market —until page 14 of the English translation; in other words, it was then regarded as a matter of small importance. It has always been my great pride that I succeeded in promoting it from the humble position that it occupied under Mrs. Thatcher's Solemn Declaration on European Union to becoming the flagship of the enterprise.

When my noble friend reported that to the House of Commons —and I shall repeat what she said in full because she said very little, although that is not for me to comment upon—she said: Together with other members of the Council, I signed the declaration on European union. We strongly support the objectives of greater political co-operation which are set out in this declaration, and we welcome the reaffirmation of the wider objectives of the European Community".—[Official Report, Commons, 23/6/83; col. 146.] Of course, the "wider objectives" are those which I have read out.

In case the Opposition is taking any pleasure from what I am saying, perhaps I may refer them to what was said by Mr. Michael Foot, then Leader of the Labour Party. Mr. Foot, of course, was well known for his extensive use of words and for very little content in them. On this occasion he excelled himself because he had very few words and no content whatever. He said: the best way to describe the outcome of the Stuttgart Council in general is that … it is extremely disappointing".—[Official Report, Commons, 23/6/83; col. 146.] I hope that the Opposition will remember that when it comes to deal with the Social Charter.

When progress is resumed once we are out of the recession we would hope that we shall make progress with the other members of the Community. Quite frankly, the option which is sometimes put forward —that we can negotiate some special status in the Community which does not commit us to full Community membership—is one which simply does not exist. I hope only that during our present generation we shall succeed in doing more than just bumbling along on the fringes of the Community. I hope very much that we do better than that because our history gives us no encouragement. In economic terms we have fallen steadily behind since 1945, incapable of managing our economic affairs with any degree of competence but unwilling to merge our destiny in a greater and more hopeful European entity.

I now turn to the three generations which I referred to earlier. The third generation is one which will soon make its mark; namely, the generation of young people born after 1973, who have never known a time when we have not been members of the European Community and who, I suspect, will find great difficulty in understanding what the present commotion is all about. They will begin to exercise their influence not in this century but early in the next. It is in them that our future hopes must lie. The best service that we can do today and tomorrow is to keep that hope alive. We must ensure that when we hand over the conduct of affairs to them it will not be a damnosa hereditas; that they will still have open to them the opportunity of doing much better for themselves, for their fellow citizens and for their country than we in our generation have been able to do.

6.47 p.m.

Baroness Williams of Crosby

My Lords, it is a great privilege for me, as a new Member of this House, to listen to the debate. We have heard from people who played a major part in the making of the Community a nd in Britain's relationship to it. I feel profoundly privileged to be present on this historic occasion.

When I listened to the speech of the noble Lord, Lord Cockfield, I could not help feeling glad to be on the same side on this occasion since I should very much dislike to be on any other side. Many years ago I retained the noble Lord as the Price Commissioner. I could have told those who later appointed him European Commissioner that he had the extraordinary quality of knowing every single comma, full stop, semicolon and colon in the Price Code and everything in between. Once given the opportunity to create, as he did, the single market one could be quite sure that the noble Lord would make of it the great edifice that he did. I should like to compliment him on a remarkable speech.

There are two issues to which I wish to turn. However, first, I wish to comment on the different kind of approach that different member states of the European Community have taken to its development and its future. When I heard the noble Lord, Lord Jay, I could not help thinking, as was indicated by the noble Lord, Lord Pym, that one of the reasons we can take such a relaxed view of the political necessity of the Community is precisely that the idea of another civil war in western Europe has become unthinkable. I find it hard not to believe that the creation and development of the Community has had a great deal to do with that fact.

However, while we may see ourselves as an exceptional country, not invaded for 900 years and not occupied at any recent stage in our lifetime, other countries have been much less fortunate. It is as much in our interests as it is in those of anybody else that we should create in western Europe a powerful anchor of political and economic stability; and indeed the Community must be much more than a mere economic concept.

The Maastricht Treaty is only one more stage in a process which noble Lords and the noble Baroness, Lady Thatcher, have explored in the course of the debate. For indeed at one stage after another this country came to terms, as it had to, with some degree of pooling and transfer of sovereignty. The noble and learned Lord, Lord Wilberforce, referred to the so-called direct effects of Community directives. That goes back to the Treaty of Rome. It was the first acceptance of some degree of qualification of this country's long-standing parliamentary sovereignty.

With the Single European Act we accepted further qualifications. For what else is qualified majority voting —which, as the noble Baroness, Lady Thatcher, pointed out, had already taken its first steps in the Treaty of Rome—but than some degree of qualification of sovereignty? However, qualification of the concept of sovereignty is not the monopoly of the Treaty of Rome or subsequent treaties of the European Community. If your Lordships read the North Atlantic Treaty it is difficult to believe that we have retained total sovereignty over, for example, our nuclear weapons. I could give many more illustrations from the General Agreement on Tariffs and Trade to international agreements on environmental protection which show that we are moving into a world in which the concept of the absolute unique nation state will necessarily be changed by the sheer force of events.

I turn to the Treaty of Maastricht itself, the Treaty on European Union. It is made up of the two concepts of supra-nationality and inter-governmentalism. The proposals for economic and monetary union reflect supra-nationalism. There are aspects, to which some noble Lords have referred, where there is an inadequate structure of accountability. I share their views about that and I hope that we shall be able to rectify that matter over the next few years.

Let us look at the two inter-governmental pillars of the Maastricht Treaty. One of those is the proposal for inter-governmental co-operation in foreign policy; the other is the proposal for inter-governmental co-operation on internal security, policing, the drug trade, fraud and many other aspects of international crime.

First, as regards inter-governmental proposals for foreign policy, as the noble Lord, Lord Carrington, pointed out, we might not have entered into the terrible tragedy of the former Yugoslavia, about which the noble Baroness, Lady Thatcher, has spoken with such eloquence in this House and elsewhere, had we had a real European foreign policy. But we had nothing of the kind. Had we had some kind of means of defence, of internal co-ordination of security to enable us to intervene, we might not live with such shame as regards the consequences of the former Yugoslavia.

Therefore, we have inter-governmental co-operation in foreign policy. Perhaps I may say to the noble Lord, Lord Jay, that it is made absolutely plain throughout that foreign policy will be based upon the conclusions of the European Council. Decisions will be made unanimously and it is only by unanimous decision that an element of qualified majority voting can be accepted in the operational carrying out of foreign policy. That is hardly a radical departure from other relationships which we have had with countries like the United States, member states of the Commonwealth, and so on.

In respect of internal security, inter-governmental co-operation troubles me a great deal more for we do not have written into the treaty the degree of accountability to national parliaments and the European Parliament that I believe such sensitive subjects as asylum and immigration policies, dealing with drugs and fraud, require us to have. Those are all issues upon which Members of Parliament have much to say and a great deal to do in respect of protecting the civil liberties of individuals. I hope that the noble Lord, Lord Boston of Faversham, is right when he says that this House could play a very substantial part in ensuring that not only those elements which are supra-national in the Maastricht Treaty but also those which are inter-governmental shall be subjected to an adequate degree of accountability going well beyond any assurances which Her Majesty's Government have given so far to either House.

Last, because I do not wish to detain your Lordships any longer than I believe to be my right, I turn to the situation in which we now find ourselves in that the Maastricht Treaty is part of a process and not the end of a road. The noble Lord, Lord Cockfield, referred to the fact that in 1996 or thereabouts there will be a further inter-governmental conference which is intended, perhaps above all, to fill in the democratic deficit to which I have just referred. What troubles many of us most about that democratic deficit is where we are now in relation to the development of the European Community. I hope that noble Lords will not be too critical if I say that I believe that it has been the foot-dragging of this country in our relationships with the development of the Community that has been in large part responsible for that democratic deficit. For we have an immense contribution to make. We are a country with a rich tradition of civic society and a concept of trust deeply laid within the structures of our country. This country should be proud of a network of mutual rights and obligations which constitute our society at its very best. Yet all of that has been, in a sense, kept away from the development of the Community which desperately needs it. It needs that underpinning of a civic society which this country is uniquely placed to contribute and has in many ways refused to do so.

Let us look for a moment to the future. In the next couple of years we shall almost certainly be joined by four countries, each one of which shares that civic tradition, especially the Scandinavian countries of Sweden, Norway and Finland. Those countries believe deeply in the individual liberties and social structures of advanced and mature democracies. They will be a great asset to the Community.

But the next group of countries to join the Community is in a very different position. They are the countries to which the noble Lord, Lord Pym, referred. They are the countries of Central and Eastern Europe, the countries of the Visegrad group —Poland, Hungary, the Czech lands, Slovakia and beyond them, Bulgaria, Romania and perhaps others. Those countries are struggling for democracy. They have no tradition of a civic society. They are groping their way towards the concept of mutual obligation and trust. If those countries do not build those traditions and beliefs, they will find their transition to be a cynical joke instead of the opening up of a new future.

We have a huge obligation and commitment to democracy in those countries. We have a huge obligation and commitment to create an orderly structure in Western Europe which will be an anchor for our continent, next door to those struggling and, in many ways, anarchic structures of the Commonwealth of Independent States—the former Soviet Union. We cannot risk our continent, our safety or our democracies, by refusing to contribute all that we can to the strengthening of the European Community, whatever its shortcomings (and it has them) and whatever the difficulties ahead, and they are real.

The noble Lord, Lord Cockfield, asked, "What will the next generation do?" I profoundly believe that it has a challenge, a mission and a role ahead of it in this country that will take all the courage, strength and dreams that it is capable of achieving.

7 p.m.

Lord Rawlinson of Ewell

My Lords, in September 1939 I was an undergraduate at Cambridge and three weeks later I was in the Army, exactly as my father had been in 1914. Part of my life was spent fighting the Germans and the Italians, and some of my friends in the Royal Navy may have been fighting the French. That is the experience of very many of your Lordships, some around me, some sitting opposite and some in other parts of the Chamber.

That experience has coloured, governed and dominated my personal view about Europe, and that is why I will support the steps that the Maastricht Treaty will take towards a better union of the European states. Anyone who has had experience of war between Europeans could not fail to thank heaven for what has taken place over the past few years in relations with the European states.

When I was a young man, the British Empire was at its most extensive, and the remark made by Dean Acheson was pertinent and poignant when, as referred to by my noble friend Lord Parkinson, he said that Britain had lost an empire and had not found a role. We, as a nation, had been so certain of our place in the world. Now we have become so uncertain that we have floundered on, clutching at pretensions—for example, the British Commonwealth of Nations; the British Nationality Act, which did so much damage to the homogeneity of this nation; and the special relationship with the United States. I made visits to Washington as a law minister in 1963 when relations were supposed to be very close. Noble Lords will remember Uncle Harold and President Jack Kennedy. In the early 1970s the hollowness of that self-deceit was quite apparent. Any reader of any United States' newspaper or anyone who has any experience of the far or mid-West knows only too well how little is written or known in Britain, compared with France and Germany. The special relationship meant nothing. The ocean which General De Gaulle believed we would choose was not an available alternative.

All of that together with the enormous and obvious technological revolution, future communications and travel made me logically, if at times, a bit sadly, accept that the future of our nation lay with Europe.

From Britain's history there never can be and there never will be a romantic view of Europe, as held by people in some European states, of Charlemagne and his knights, and the defence of Christendom against the Turks. The stark fact is that we are a part of Europe. We are not a part of the Americas or of Africa, which has returned to a continent of war lords, or Australasia; we are a part of Europe.

I confess to being irritated and resentful of the attitude of some people who were still in short pants or pigtails when we were at arms, who give the impression that those of us who accept the European idea are less British than they; that by accepting the European idea, we are betraying them. I deeply resent that view.

It is difficult to see how it lies in the mouth of anyone who has served in any British government since 1974 to adopt that attitude. Who are the names on the Single European Act 1986? They are all the great grandees of the Conservative Party. We have heard read out all the words about union in that Act. Who was it who took us into the ERM? It may have occurred at the wrong time and at the wrong rate, but who was it? It was Ministers in the Conservative Government.

It is difficult to accept the practice that has grown up of leaking to the media statements such as "I was overridden; I did not really believe in it; it was not really me; do not blame me; it was the Cabinet that got out of control". It is deeply sad for me, as an old Conservative, to see a successor Prime Minister being overtly or covertly demeaned by a predecessor.

Following the Single European Act, which conceived free movement, free trade, free movement of capital and people, there had to be a development which would co-ordinate co-operation and control of crime and security, foreign policy and defence. How could not Ministers in 1986 see that that would happen? There was bound to be a follow-up. There was bound to be a precursor. Those people are the least convincing opponents of the treaty. I can understand those who have always stood out against the treaty and have solidly fought it all the way through the House of Commons in the 1970s and have taken every opportunity to fight it. They are persons of honour.

However, I wonder about the people who have suddenly changed. Why have they changed? Is there a motive behind the change? Why should they suddenly be attacking the present administration and the treaty? It was obvious after the Single European Act that there would be such a development. It was obvious that there should be a foreign policy, whereby we could put our collective weight behind shared objectives, so that although standing alone we could be brushed aside, together we could not. It is very sensible to increase the accountability of the Commission, to increase the power of the Court of Auditors, to strengthen the rule of law and the Court of Justice, making much more sure that attention is paid to the rules. On 34 occasions France and Germany have been brought before the European Court of Justice and Italy has appeared on 87 occasions. That compares with nine times for the United Kingdom. Now there will be a more extended jurisdiction and a more rigid interpretation of the community.

Having spent 40 years of my life as an English lawyer, I can say that we do not have a monopoly of skill in judging and in justice. There are some strange foreign people who also are quite good at being just and who can fairly and decently interpret the rules of a treaty. The courts will be able to pay much closer attention to the question of subsidiarity.

Why is there a call for a referendum? Who are we, in this Chamber, to insist (if the situation ever arises) on a referendum? I was a member of the Tory party in another place when in 1975 the party opposed a referendum. Why did we do so? It was on constitutional grounds, or so we thought. That is what we thought as we read Burke. We believed that we were representatives, not delegates, and that the decision was ours to take, that we could not shift the responsibility. We had the responsibility and that is what we had been elected to do. Some of those people who supported that view then and who led the field against the idea of a referendum, now propose one. At that time they were overcome and there was a referendum. But in this instance the elected House has decisively rejected a referendum, and that is a matter that should pre-eminently be decided by the elected House. It turns on the powers of Members of Parliament who are not delegates but who are representatives. If they have decided that that is a decision for them to take, and they do not wish a referendum to take place, who are we in the unelected Chamber—we are both hereditary and appointed peers—to say otherwise in spite of the great talents we hold and the great contribution we can make to the government of the country? Who are we to say that the Members of the House of Commons were wrong when they retained the right to make this decision?

I suggest that it would be extremely dangerous constitutionally if this House were suddenly to force upon the other place a referendum when another place has made its decision so decisively. There is an old political nostrum that people do not vote positively but rather they usually vote negatively because they are suspicious of the judgment and the motives of those who are soliciting their support. I suppose that is partly why I am so strongly in favour of this Maastricht Treaty. I am suspicious of the judgment and motives of those who oppose it.

I support Her Majesty's Government because I believe the treaty is in the interests of Britain and that without it Britain would be shifted into the margins of Europe. It is in Europe that Britain's destiny in the 21st century must lie. We must try to think 50 years ahead. We must ask ourselves what kind of political organisations there will be then. Do we really think that we on this small island can sit outside that great mass of the sophisticated electorates of the world? We must bear in mind that if we find our destiny in Europe, Britain, after 50 troubled years, will have found what Dean Acheson has said we have not yet found, which is a role.

7.12 p.m.

Lord Armstrong of Ilminster

My Lords, I shall speak the shorter because so much of what I should have liked to say has been expressed by the noble Lord, Lord Carrington, with infinitely greater authority and wisdom than I can command. I have worked in the public service for 14 years under four Prime Ministers to establish and then to maintain and to strengthen British membership of the European Community. I have done that as a matter of professional duty but also as a matter of personal commitment.

Like the noble Lord, Lord Carrington, I shrink from the extreme conceptualisms of federalism as well as from the extreme conceptualisms of sovereignty. I look to find the pragmatic solution that is right for us now. I listened with great respect to the speech of the noble and learned Lord, Lord Wilberforce, who from the depth of his wisdom and experience told us that Maastricht was not the massive and inevitable crossing of the constitutional Rubicon that some have feared. He also reminded us that the word "union" is one of those "Alice in Wonderland" words that means just what the speaker of the moment wants it to mean.

Britain's destiny and future lie within Europe. That means in today's circumstances Britain must be a member of the European Community. As the noble Lord, Lord Jenkins of Hillhead, and others have said, there is no real alternative strategy offered to us that commands any credibility. Isolation outside Europe might be splendid. It might constitute a fine and private place with all the attendant disadvantages attached to that. Nor in my judgment should we get off the train, or the bus, or whatever form of locomotion one adopts, crying, "Stop the world. I want to get off". That would be to marginalise the effectiveness of our influence in Europe.

If it is right that our future lies in Europe, as I believe it does, Britain needs to be at the heart of Europe, able to exercise her rightful degree of influence in the councils of Europe to protect British interests in the Community and to make our contribution, in the directions we think right, to the shaping of the Community and to the way it should develop.

I shall not discuss monetary union at great length except to remind your Lordships that neither the treaty nor the Bill to which we are asked to give a Second Reading would commit us to the third stage of economic and monetary union. It would not in fact commit us to rejoining the exchange rate mechanism if we did not wish to do so. These matters are reserved for subsequent decision. In the case of the accession to the third stage of EMU, that matter is reserved for the decision of the British Parliament.

We have succeeded in obtaining an out from the social chapter. Not all noble Lords will approve of that. However, many will regard that as a recognition that British interests are capable of being reflected in the discussions. I hope that we shall give a Second Reading to this Bill because in my view it is time to bring the discussion of Maastricht to a conclusion. The Maastricht debate has diverted the attention and the energies of the political and administrative processes here for long enough. It is time to liberate those processes to concentrate on other pressing matters, not least—the noble Lord, Lord Cockfield, reminded us of this—the problems of the British economy.

The Maastricht debate is also diverting those processes, and other European processes, from the enlargement of the European Community. There are four or five countries seeking early accession to the Community and there are another three or four not far behind. We should concentrate now on those matters and put the ratification of Maastricht securely behind us.

Another reason for doing that is that, with the accession of four, five, or seven countries and with a European Community of 17 or 20 countries, the kinds of institutions, relationships and procedures which were appropriate for six countries, and may be appropriate for 12 countries, may hardly be appropriate for a Community comprising the large number of countries I have mentioned. As a result, I believe the noble Lord, Lord Carrington, may be right to suggest that some of the measures that are proposed in the Maastricht Treaty may never come to pass. I remember accompanying Sir Edward Heath to the first meeting of European heads of Government which a British Prime Minister attended: Britain was still about to join the European Community. At that meeting the nine heads of Government agreed that the Werner Plan of economic and monetary union should be achieved by 1980. We passed that date 13 years ago.

No doubt Maastricht is not perfect, but the balance of British national advantage lies in our joining our partners in ratifying the treaty, and in doing so without too much further delay. I therefore hope that your Lordships will give a Second Reading to the Bill.

7.20 p.m.

Lord Blake

My Lords, I too hope that a Second Reading will be given to the Bill. I believe that it would be wrong for your Lordships' House to reject a measure which figured in the manifestos of all three parties at the last general election, however small the print.

There is only one aspect of the issue on which I wish to speak. I believe that there should be a national referendum before the Bill is finally enacted. I agree with my noble friend Lady Thatcher, the noble Lord, Lord Jay, and the noble Viscount, Lord Tonypandy, that the issues involved are sufficiently important and constitutionally significant for the nation to be consulted before the Bill becomes law. I gave my views on the matter in the debate in your Lordships' House on 17th February initiated by my noble friend Lord Pearson of Rannoch.

I believe that there ought to be an amendment on the lines of that moved in another place on 22nd April. It need not necessarily follow the exact wording, the detail of which could be left until later. The purpose would be the same, namely to ensure that the British people are consulted, just as the Irish, the Danes and the French were consulted, on a measure with such far-reaching consequences for their future governance.

I am president of the Campaign for a British Referendum. That body is neutral as regards the treaty. Some members would be opposed and some, like myself, would be in the possibly paradoxical position of voting hesitantly in favour of the Maastricht Treaty if there were a referendum. What unites us is the belief that there should be a referendum and that the British people should have an opportunity to vote on a major constitutional change.

Attempts have been made to depict the Bill as merely dotting the i's and crossing the t's of the Single European Act. I cannot feel that that is an adequate description of the Maastricht Bill. If it is, what has all the fuss been about? Why have we been making such a song and dance about the Maastricht Bill? The Bill involves major changes.

It may be that even a country with the long and venerable continuity and tradition that ours has should sometimes accept major changes, even changes which are de facto irreversible and irrevocable, as some of the changes are. One would hardly want to repeal the Reform Act 1832, although when I see some of the antics which occur in another place I sometimes wonder whether we should.

It is correct that Parliament has an undoubted constitutional right to enact such changes. I do not dispute that for one moment. However, a right to do something is not a duty or an obligation to do it. There is choice or discretion in Parliament and such discretion has been exercised by Parliament four times in the past 21 years. Those instances have already been mentioned. They occurred in 1972 in the case of Northern Ireland, in 1975 in the case of the national referendum in the United Kingdom on an issue not unlike Maastricht, and in 1979 in Scotland and Wales on the question of devolution. There are thus perfectly good precedents for a referendum on a constitutional question and for the people themselves—as in Northern Ireland, Scotland, Wales and the United Kingdom as a whole—to vote on how they are to be governed. After all, how one is to be governed is among the most important matters which a nation has to decide.

In conclusion, I shall deal briefly with three objections which have been and no doubt will again be raised against a Maastricht referendum. The first is that the matter was settled at the general election last year. That is claimed because all three political parties supported Maastricht in their manifestos. However, that is precisely why we ought to have a referendum. At the general election there was no opportunity to vote against Maastricht. Whatever determined the result of that election it was not Maastricht. It may have been Mr. Major's soapbox, the war of Jennifer's ear, Mr. Kinnock's Sheffield rally or Mr. Smith's shadow budget. It is more likely that it was the simple question of whether people wanted a Conservative or a Labour Government. Whatever the truth, it would be a travesty to argue that the outcome had anything to do with Maastricht. The electorate simply had no choice.

The second objection to a referendum is that it in some way derogates from the sovereignty of Parliament, whatever that really means. In fact, the decision to hold a referendum, if it were taken, would itself be an expression of the sovereignty of Parliament, which alone can authorise such a procedure. It may be that Parliament is not respected by the public as much as it once was. That is hard to measure and there could be many reasons, but it would strain credulity to suggest that that has anything to do with the four referendums held since 1972.

Finally, it has been and will no doubt be objected that the whole question is too complicated for the electorate to understand and that it is better to leave such a matter to the wisdom of Parliament, whose Members will, of course, have read the treaty and Bill from beginning to end. I should hate to appear chauvinistic or politically incorrect. However, I cannot believe that if the Irish, the Danes and the French appear to have had no difficulty in voting on a Maastricht referendum my own fellow country persons—as I suppose I should call them—would find themselves too bewildered and confused to do so. There appear to have been no complaints in Eire, Denmark or France that their citizens could not understand what they were voting on. Surely the British are equally capable of understanding the issues and of making up their own minds.

Finally, I disagree with the point that has been made that a referendum amendment would be constitutionally dangerous in some way. I cannot see that it would be. After all, it is slightly over-pitching the argument to say that if an amendment of the type proposed were passed it would be thrust on to the other place. Members of another place are perfectly capable of rejecting it if they want to. The whole purpose of such a referendum would be to enable second thoughts and to allow the matter to be reconsidered. There is no question of forcing the matter over the heads of Members of another place. Under our law that cannot be done. Therefore, that particular apprehension appears unjustified.

In 1911 there was a great constitutional crisis. The cry went up of the "Peers against the people". If we were to carry a referendum amendment it would be a case of the Peers in favour of the people.

7.28 p.m.

Lord Gilmour of Craigmillar

My Lords, my noble friend Lord Blake has made the best possible case for a referendum. I should like to return to that issue in a moment.

I strongly support the Bill as it stands, for two main reasons. First, I believe that the United Kingdom should keep its word and stick to its agreements as negotiated. As my noble friend Lady Thatcher said, we do not break treaties; and I believe that that dictum should apply to the Treaty of Maastricht too. The Prime Minister signed the treaty and we should not dishonour his or our word. Secondly, I do not believe that your Lordships' House should seek to upset or vary treaty obligations entered into by Her Majesty's Government.

Of course, as my noble friend Lord Carrington suggested, support for the passing of the Bill is quite compatible with believing that the situation has changed very dramatically both politically and economically from what it was when the treaty was signed 18 months ago. The chief political change has resulted from what has happened, or has not happened, in Yugoslavia. My noble friend the Leader of the House called it an international crisis close to home. It is now much more difficult to attach any very exact meaning to a common European foreign and defence policy, or indeed to the very idea of Europe, than it was 18 months ago. That is because of the failure of the Community's policy over Bosnia.

Again as my noble friend Lord Carrington delicately hinted, that has been the sorriest possible tale of futile diplomacy. I say "futile diplomacy" because, when people are fighting each other, for another party to indulge in prolonged diplomacy while at the same time ostentatiously denying itself the threat or sanction of force is bound to produce failure. The aggressor will always continue in his aggressive ways secure in the knowledge that no one will do anything effective to stop him.

The proof of that was demonstrated last month. Early in May Mr. Milosevic thought that there was a serious danger of the Americans insisting on air strikes upon him. As a result, he closed the border and put pressure on the Bosnian Serbs. As soon as that threat disappeared, supplies started rolling into Bosnia again. Europe has shown that it is prepared to do nothing even in the face of continual atrocities and international aggression—not just civil war—on its border. My noble friend Lady Thatcher has spoken eloquently and cogently on the tragedy of Bosnia.

At its greatest test, European co-operation in foreign policy has failed. However, I do not believe that that miserable setback provides a good excuse for refusing to ratify the Maastricht Treaty. For one thing, foreign policy co-operation long antedates Maastricht. It goes back to the Davignon Report of 1970. Secondly, the dangers facing western Europe are far too great to permit the aim of deeper foreign policy co-operation being discontinued or disavowed.

In the past 18 months, the economic situation has changed as much as the political one. It now seems inconceivable that monetary union can be achieved in the very near future. I must say that I welcome that. I believe that the Maastricht proposals for EMU were deeply flawed from the start. They seem to me to envisage a bankers' Europe such as the noble Lord, Lord Jay, feared. Of course, I have nothing against bankers, in particular since my noble friend Lord Alexander of Weedon, is about to address your Lordships' House, but I do not think that a banker's Europe would survive for very long. If one is going to have EMU one has to have institutions to prevent what one might call a Northern Ireland situation arising in a state; and there is nothing of that kind in the Maastricht agreement.

Unlike my noble friend the Lord Privy Seal, and unlike the two other party leaders, I am basically in favour of referenda. Like my noble friend Lord Blake, I do not believe that they are incompatible with parliamentary democracy. They can be a useful addition to it. But, as the noble Lord, Lord Richard, stated, it is a little late for a referendum on Maastricht. It is now 18 months since the treaty was signed. But it is even later than the noble Lord, Lord Richard, suggested, because, as my noble friend Lord Cockfield said—and the noble and learned Lord, Lord Wilberforce made the same point in different language —the drastic nature of Maastricht has been very greatly exaggerated. I believe that the time for a referendum was on the Single European Act; and we did not have one.

It is of course true, as my noble friend Lady Thatcher said, that no elector has had a chance to vote on Maastricht. However, that applies to every single issue that could possibly face the country or the electorate. We have a system of voting for parties. We never have a vote on any single issue. It is quite possible that this issue might be the exception. If we had started off with that view, that might well be true. But the argument put forward by my noble friend Lord Blake—unless I misunderstood him—that, because all three parties are in favour of something, it strengthens the case for a referendum seems decidedly odd. We all know that parties seek votes. If they believe that they will gain votes by going against the view of the other two parties, one of them is likely to break cover and say that they are against, in this case, Maastricht. However, they did not. That surely shows that they believed that Maastricht should be ratified and that there was not a great upsurge of support against Maastricht. While there are obviously exceptions, in general if all three parties are in favour of something there is at least a possibility that those three parties are right.

The European Community cannot be frozen in its pre-Maastricht mode. The Community cannot stand still, and we cannot opt out. A mere free trade area is not a possibility even if it were desirable. It never was a possibility. One has to have institutions to police or organise free trade. The treaty is another step on the road to greater European unity. I very much hope that your Lordships will ratify it.

7.36 p.m.

Lord Moran

My Lords, whether or not one is a supporter of a unified Europe it is now apparent to most people that the Treaty of Maastricht was misconceived. The attempt to force an unruly Western Europe into a premature union has backfired.

A few days ago a writer in the Financial Times said this: The purpose of Maastricht was to take Europe a great stride forward, but the real political effect of the treaty-making process has been to make European integration more unpopular, divisive and difficult". Unsatisfactory though it is, the treaty is nevertheless now before this House.

The question we are debating is momentous, but the issue is simple: should this country remain an independent, self-governing member of the European Community, or should we take the road to "ever closer union" spelled out in the treaty, involving a large transfer of power from Whitehall and Westminster to Brussels? The treaty provides for a single European union; European citizenship; the exchange rate mechanism, then permanently fixed exchange rates, leading to a single European currency, the ecu; a single European central bank which will issue all EC currency, hold all reserves, direct the economic and monetary policies of member states and have powers to make binding regulations, backed by the European Court of Justice, which can fine member states for failure to comply; a common foreign policy, a common security policy and eventually a common defence policy, leading to a common defence; a single institutional framework, with greatly increased influence for the Commission but relatively few real powers for the European Parliament and far fewer powers for national parliaments; and, finally, provisions on subsidiarity which relate only to areas outside the exclusive jurisdiction of the centre. Those are quite hard to find. Compared with the treaty's main provisions, subsidiarity is a piece of grit to a steam-roller.

The treaty will be applied by a Commission with overtly federal objectives and interpreted by the European Court of Justice, which will treat it as a political imperative, not just a piece of law. That is the way it works, or has worked, although my noble and learned friend Lord Wilberforce held out a faint hope that it might act differently in future. In the Council of Ministers, the majority hold views about a federal Europe that Ministers in this country either do not share or dare not openly support.

This, then, is a massively centralising treaty. It marks a decisive shift of power away from national parliaments and towards unelected and unaccountable central institutions. It heralds the greatest change in the way that we are being governed for many, many years.

But in this country the issue has been confused by the line taken by the Government. The Foreign Secretary claims repeatedly that the treaty is not a blueprint for a United States of Europe, provoking the reasonable reaction from Mr. Simon Jenkins of The Times: He can't have read it". Now we know that the new Chancellor of the Exchequer has not read it because he has told us so. Ignorance of its detailed provisions, or indifference to them, seem to be qualifications for high office in this Government. But Mr. Hurd has surely read it and his view of the significance of the treaty is really very strange. He claims that it marks "an advance for our approach" and "an improvement on the previous position". He says that it was "largely settled on our terms" and "offers us the chance to arrest the centralising, harmonising tendency" and "to build a more decentralised and diverse Community". He even talks about building up further the role of national parliaments. I find it hard to credit that he really believes all this. A reading of the treaty itself makes it clear that it is a centralising measure. I am afraid that, as was once said in another context, the Foreign Secretary has used great gifts to obscure the truth.

The Prime Minister, when he talks about Maastricht, sounds reasonable and reassuring, but it is clear that no other Community government shares his view of what the treaty means. Despite serious doubts among their electorates—the French referendum was only won by a whisker and in Germany there is increasing opposition to the concept of a single currency—those governments regard Maastricht as marking significant progress towards a European union which, they hope and expect, will become a single European country —a federation or a united states—within 15 to 20 years. The timetable and the three stages for that progress are set out in the treaty. In the meantime, under the existing arrangements, the Commission churns out vast numbers of directives and regulations which increasingly dominate our lives, as any businessman or farmer knows. It threatens us with many more, if necessary as health and safety measures, so that our objections can be overruled by majority vote.

The key element in Maastricht is monetary union and the single currency. I have previously argued in this House that a single currency means a single country. I have no doubt that that is so. We do, indeed, have our opt-out from Stage 3, so we are not inescapably committed; but as everyone knows, if we ratify the treaty we shall come under enormous pressure, first to rejoin the ERM—clinging to which for so long did us such immense damage, as the noble Lord, Lord Parkinson, pointed out in his notable maiden speech—and then to agree to a single currency. Those who are planning the new fully integrated Europe are not letting the grass grow under their feet. Indeed, the summit planned for this autumn by Chancellor Kohl and the Belgians is designed specifically to speed up the establishment of European union. Next week, I believe, preparations will begin for setting up the European Monetary Institute which will come into being next January as a forerunner of the European Central Bank, an unelected body which we will not be allowed to influence and which is to run the economies of the Community. In many respects, the president and governing council of that bank will, under the treaty, become the real government of Europe.

Now I know that some noble Lords think that in practice things may not turn out to be so bad. They suggest that some of the treaty's provisions, like European citizenship, are pretty meaningless and that monetary union is not going to happen, or is not going to happen for a very long time, because the conditions for it, above all the required convergence between the economies of member states, are not in place and are not likely to be in place for a long time. In any event, it is all going to be reviewed in 1996. Therefore, they suggest, would it not be best to pass this Bill and look to our Government to work with those who think like us to devise a more sensible and realistic way forward?

It sounds an attractive option, but I do not think that it will do. I agree with the noble Lord, Lord Parkinson, it seems to me neither wise, nor indeed, honourable to ratify a treaty on the basis that a good deal of it is probably nonsense and will not come to pass. And I think that it greatly overrates our persuasive power in Europe. If we think that the plan laid down by the treaty is wrong, our proper course must be to resist the treaty and this Bill.

Now I come to the most important point of all—the lack of any consultation with the British people. Here is a treaty of 134 pages, mainly consisting of amendments to earlier treaties not published with it. It is a text to baffle a barrister. There is no consolidated text, no introduction, no commentary and no explanation of the treaty's provisions. In language favoured by the Commission, there is no "non-technical summary". One can buy the treaty text at the Stationery Office for £13.30. Very belatedly, a Foreign Office pamphlet has been brought out. By any standards, the treaty will affect everyone, yet the public, who receive so much advice under the Citizen's Charter about how to complain about trivial matters, have been deliberately excluded from the debate. There has been no attempt to tell them what powers will be transferred and what retained, or how the treaty could ever be abrogated.

Voters in the last election, as the noble Lord, Lord Blake, reminded us a short time ago, had no choice about Maastricht because of the consensus between the three main political parties, who have a combined membership of rather less than half that of the National Trust. That has stifled discussion and denied the people any say. No one who refuses to ask them has the right to assume the consent of the British people to forcing through the ratification of this treaty. A major constitutional change, brought about without real consent may, when people wake up to what has been done, produce a violent reaction. A Europe jammed together without wholehearted consent will not last, any more than the Soviet Union and Yugoslavia have lasted.

There is only one way to overcome this problem. That is a referendum. The other place voted against a referendum, we all know the pressures to which they were subject. The payroll vote, the ferocious arm-twisting by the Whips, the blighting of political prospects, the threat of de-selection —all presented a sorry spectacle of what we are pleased to call parliamentary democracy. The issue is now with us.

What will this enormous transfer of power mean? No more pound sterling, no more control over our own economic policy and, above all, the reduction in status and power of this Parliament to something like the state legislature of Pennsylvania or West Virginia, with the Queen no longer sovereign, but, like each of us, a citizen of Mr. Delors' Europe, owing unspecified duties to it. In those circumstances, I think that the State Opening of Parliament would become a meaningless charade and should be abolished.

It must be wrong to try to force this massive change through without giving the people a chance to speak. It is insulting to treat our people like illiterate peasants, too stupid to understand what is at stake. This House should ask the other place to think again. We must give the Prime Minister a chance to reconsider his decision. I believe it would be very much in his own interests to do so.

I am not sure whether Sir Edward Heath, when angrily denouncing those who happened to disagree with him, was arguing that if this House called for a referendum we would be among those who, as he put it, would be, hated to the end of time", or merely that we should be abolished; perhaps both. But we should not be influenced by threats or abuse.

We have a great opportunity. It is the last chance for our country. We can amend this Bill to ask that our own people should be consulted. It will be a proud day for this House if we can do that. We can and we must stand up for our own people. No one else can do it.

7.50 p.m.

Lord Alexander of Weedon

My Lords, in this debate much is at stake for the commercial community. It is not just a question of the terms of the agreement made at Maastricht, but rather there is at stake for us the answer to the fundamental question which we have pondered in this country for a very long time: are we committed to playing our full part in shaping the European Community?

For commerce and industry it is vital that we do so. We are still a trading nation, and commerce is still our life blood. Europe is far and away our most important export market. Many wish, as I personally would, to resist the growth of too much centralised power in the European Commission. We also recognise that, as is the case at the end of every skilfully conducted negotiation, the Maastricht agreement is less than perfect. But I believe that we must participate, and do so fully, if we are to promote free trade, secure a competitive marketplace and protect our own national interests. We simply cannot hope to prosper if we cut the painter from mainstream Europe.

Those who work in our financial markets, based principally but not exclusively in the City of London, have for years almost entirely supported the strengthening of the links with the European Community. Why have they done so? The reasons are simple and hard-headed. No less than 60 per cent. of this country's exports now go to Europe. As much goes to Germany as goes to the United States and Japan combined. Our financial dealings are increasingly focused on the single market. We are able to serve as the leading financial centre for Europe in one of the world's three main time zones. Overall exports from City activities, including banking, insurance, law and accountancy, are some £17 billion a year. So the strength of the City is an essential part of our national interest.

So, too, are our manufacturing strengths. The CBI and most manufacturers have consistently stressed the need for us to be fully involved in the way Europe goes forward. We are all now once again (and high time too) acutely conscious of the importance of improving our manufacturing capacity and fighting for export markets. We are helped in that effort by the investment to create manufacturing plant which has come into this country in the past few years. It has enabled us to become net exporters of colour televisions. Soon we shall again be net exporters of motor cars.

Almost 40 per cent. of United States and Japanese inward investment into the European Community has been made in this country. That has not been because of the attractions of the United Kingdom home market standing on its own. It has been because this country has been seen as committed to free trade and as the first port of entry into the wider European market. We cannot put investment of that kind at risk.

Leaders of commerce, in both the United States and Japan, say that our position will be imperilled if we stand apart from the next stages. Our already inadequate manufacturing industry would lose momentum for growth.

It is sometimes urged that we should follow the example of Hong Kong, which has served for many years as a conspicuously successful offshore leading market for China to the outside world. But the comparison is misleading. China had no developed markets of its own. But in Europe, Frankfurt and Paris are each already sizeable financial centres, and they are striving to improve their position. Frankfurt has started to liberalise its financial regime. It is actively promoting itself as Germany's main financial centre. We simply cannot ignore that competition. The single market will continue to develop.

Almost every speaker in this debate has stressed the importance of free trade. But much of our free trade must be with Europe. Those who do not participate to the full in the development process will lose out. We cannot simply catch the bus or train or any other vehicle labelled "free trade" but yet fail to take part in shaping the railways, roads or other infrastructure.

Let us take what will happen under the Maastricht agreement alone. A European monetary institution will as from 1st January 1994, whether we like it or not, shape the framework in which our financial institutions do business in our most important markets. It will stamp its imprint upon banking supervision, upon capital adequacy, upon the levels of reserves, upon payments systems and the kinds of business that we can do and the way in which that business is regulated. Many of those are very technical. But each vitally affects our ability to compete. The higher the standing of the United Kingdom and the greater the influence the Bank of England has in the European monetary institution, the better it must be for us. We must have a voice, or others will secure their own advantage and surely, but not slowly, the City's leading position will be eroded.—

Lord Bruce of Donington

My Lords, I am most grateful to the noble Lord for giving way to me on this point. Before he departs from the financial aspect in which he is very interested, will he explain to the House the circumstances in which we lost £6 billion on 16th September?

Lord Alexander of Weedon

My Lords, it is no part of my theme to deal with the vicissitudes of our membership of the exchange rate mechanism. I would say, however, that we went in with the support of government, of the City and of most of industry. The objectives which we sought in going in—a stable currency and low inflation—are still in principle desirable.

Some still query how much we can achieve if we do not participate in the development of Europe. But let us consider the evidence. It was this country which, when my noble friend Lady Thatcher was Prime Minister and my noble friend Lord Cockfield was Commissioner, did so much to promote free trade. They hammered away at the protectionism which is so ingrained in some European countries. That process has much further to go, and we must continue to drive it forward. But perhaps the most important illustration of the influence wielded when this country plays its part is the Maastricht Treaty itself. At Maastricht we were able to avoid the acceptance of the social chapter. I believe it is not just we who view the social chapter with considerable misgivings. So, privately, as they will tell one, do many continental Europeans.

Europe as a whole has lost its competitiveness over recent years. It is in danger of what a decade ago used to be called "Euro-sclerosis". It is going through a period of structural change. Enormous developments in technology, combined with the cost of labour, have meant that unemployment has risen rapidly. As Sir Michael Angus, president of the CBI, said recently, Europe faces the challenge of modifying the Brussels approach so as to give primary emphasis to European industrial competitiveness. This challenge cannot be overstated. One of our key roles is to encourage Europe to meet it. It is in our interests that our major export market should be able to compete with other OECD countries and with developing nations.

I do not wish, despite the temptation put before me by my noble friend Lord Gilmour, to argue for a bankers' Europe. But perhaps I may say a word or two on the emotive issue of a single currency. We were right to reserve our position on the single currency. Theoretically a single currency could bring cost savings and greater efficiency to the single market. But it cannot be driven by a timetable. As the Governor of the Bank of England has said, economic convergence is necessary before a single currency could work. It is much more important that the countries of Europe should strive towards the Maastricht convergence criteria, for those drive us towards the goal of long-term low inflation, and to impose restraint on public sector borrowing. These basic economic disciplines are needed across Europe, as much as they are needed in this country.

Nor do I believe that a single currency is crucial to the function of an open market. Others may well share our own doubts about its practicality. I suspect that when the issue is fully debated in Europe there will be many who will be reluctant to give up the deutschmark. It is cherished as their greatest national asset. Europe will require considerable political tolerance if its monetary institutions are to endure and develop. With all those uncertainties it is highly understandable that we should have reserved our judgment until later. That we achieved that freedom of action is another illustration of how we secure our own interests by full participation.

I turn briefly to one of our other signal contributions at Maastricht. We stressed the importance of preserving the rights and cultures of individual countries. That is vital if the Community is to prosper and not to be rent asunder. The constitutional relationship between the European Community and member nations must be shaped in such a way that the individual countries cede only just as much sovereignty as is necessary to enable the essential functions of the Community to be fulfilled.

Only those things which need to be done centrally should be done centrally. That was the merit of the concept of subsidiarity.

Nor, as has been apparent, are we alone in that view. Chancellor Kohl has said that Europe should have "unity in diversity". The emphasis at the centre should be on completing the single market and preventing anti-competitive practices. One of the reasons why we should be there is to secure that clarity of focus.

With our influence the process of recognising subsidiarity as a constitutional buttress of the Community began at Maastricht. Along with other lawyers, I have doubts about the strength of Article 3b standing on its own. The procedures agreed at Edinburgh, which emphasise that every proposal must be tested against the criterion of subsidiarity, go a long way to allay that concern in practice. There are also indications that the Commission officials are showing a change of attitude.

But I am wary for the long term. We must be vigilant if we want the Community to survive to guard for the future against what Jacques Delors called the natural tendency of the centre to accumulate power. I hope that the new procedures agreed on subsidiarity can be enshrined in law at the next round of Community negotiations. Firm constitutional underpinning of the rights of nations is necessary and it is not yet fully there.

Our influence over the Maastricht agreement, whether we fully like it or not, was greater than over any of the other major treaties which have shaped the European Community. That not only illustrates that we can best secure our own interests by taking part; it gives us an acute difficulty if we fail to ratify. We should be branded as the part authors of the script who refused to take part in the play. What influence would we have when it came to writing the sequel?

We can have a powerful voice in Europe. Our partners wish us to be there. Time and again I have been told that our role is welcome because of our commitment to free trade, our pragmatism and our deep instincts for democracy. We need to be there because openness, competitiveness and subsidiarity are all central. Our economy has a long and tough road ahead. So do the economies of mainland European countries. This economic down-turn is not just cyclical; it is structural. Therefore we will need to fight for free trade across the board. We can only achieve our central objectives if we seek to play a central role.

8.4 p.m.

Lord Sharp of Grimsdyke

My Lords, as an industrialist who was responsible for the privatisation of one of our largest companies, I have constantly declared my commitment to the principle of rolling back the frontiers of the state in favour of the freedom, responsibility and enterprise of the individual.

It is therefore not surprising that I view the proposals set out in the treaty and the Bill before your Lordships with a great deal of concern as they extend the power and scope of the unelected Commission in Brussels over a whole range of functions not previously enshrined in the Treaty of Rome and the Single European Act, and notwithstanding the comments of my noble friend Lord Cockfield. It would be ironic indeed if the admirable efforts of the current and previous Conservative Administrations to rein back the pervasive influence of the bureaucracy at home were to be totally frustrated by strengthening and extending the role of the bureaucracy in Brussels.

I listened very carefully to the arguments advanced by my noble friend the Lord Privy Seal and other noble friends especially with regard to the economic consequences of rejection of the Bill. Despite the CBI's support and the support advanced by my noble friend Lord Alexander of Weedon, not all industrialists and City interests are so enamoured of the extension of the Bill into functions, responsibilities and obligations other than those deemed necessary to ensure efficient, equitable and effective operation of the single market.

We have been told by our European colleagues that the ultimate financial objective of Maastricht must be a common currency managed by a European central bank. It is difficult to envisage that objective being achieved without harmonisation and eventual uniformity of fiscal policy, including common tax and interest regimes; in other words, political and economic integration. If that is the direction that my noble friend Lord Wakeham invites us to take, supported by noble Lords on the Opposition Front Bench, then I believe, as the noble Viscount, Lord Tonypandy, most eloquently and passionately challenged, that the people of this country should have the opportunity to give their individual assent to such a fundamental shift of parliamentary responsibility and supremacy.

We have also been told by some of my noble friends that if we do not pass this Bill, this country will be marginalised and bypassed in influencing the economic, political and social integration of Europe. That argument is strong in rhetoric but lacking in substance. It bears little relation to current economic realities. It is true that over 60 per cent. of our UK exports are to the EC. Incidentally, that is why all industrialists are wholly in favour of the single European market. But it is also true—this is conveniently overlooked by proponents of the "sidelined" argument—that we import from the EC far more than we export. The UK represents a fat and lucrative market for our EC partners. Over the past three years our excess of imports from the EC over exports to the EC has been approximately £6 billion per annum. We currently import at the rate of more than £5 billion per month. Frankly, to warn that we shall be excluded from exercising influence over essential trade, financial and economic matters of concern to us suggests a lack of robustness in handling our economic interests rather than a lack of economic or political clout.

Attempts have also been made to frighten us by suggesting that the flow of inward investment would cease if we failed to pass this Bill. That argument too lacks credibility. Failure to pass the Bill does not affect by one iota our rights, privileges, responsibilities and opportunities within the single European market. Japan and the United States view the UK as a favourable industrial location because of our culture, competitive cost structure, skilled labour force and unconditional access to the common market. None of those factors will be adversely impacted by the non-ratification of the Bill. That has been confirmed to me in conversations that I have had recently with industrialists both in Japan and the United States.

Finally, there are those who still hanker after re-entry into the ERM, recognising that with major members remaining outside the ERM the pace and progress towards full economic and financial integration will be seriously impeded. Certainly industrialists attach great importance to exchange rate stability, which is critical for investment decisions and the quality of their earnings. But an objective of exchange rate stability can be achieved only if exchange rates reflect economic and financial fundamentals. The control of money supply, interest rates and fiscal policy, investment and savings policy and size and shape of public expenditure, all exercise leverage on our economic future. To hand over most of those levers to a European bank and a bureaucracy in Brussels, no matter how competent they are, needs the full assent of the citizens of this country. I regret that such assent has neither been sought nor received.

8.10 p.m.

Lord Harris of High Cross

My Lords, much as I respect the noble Lord, Lord Jenkins of Hillhead, and much as I have admired my old friend the noble and learned Lord, Lord Howe, as the best non-resigning Chancellor since the war, I heavily discount their judgment on Maastricht for reasons to which I shall turn in a moment.

We all agree, from our different standpoints, that there has been a good deal of confusion over Maastricht. The latest sample of deception or, to be more kind, self-deception, is a somewhat contradictory circular from the CBI which was distributed among your Lordships on a strictly selective basis—presumably to those thought to be the most gullible. At first sight it seemed to be on the side of the angels. Thus it offers, A Europe of independent nation states". It goes on to abominate Brussels for "pettifogging regulations", "arrogance", "dirigiste philosophy", "Napoleonic edicts" and "protectionism". Indeed, the author mocked Brussels as, ideally liking to organise European industry as well as they have organised European agriculture". I turn to my reasons for discounting the judgment of the noble and learned Lord, Lord Howe, and the noble Lord, Lord Jenkins. It is that from their lofty European perches they have totally failed at any time to sound warnings to Brussels against the excesses that the CBI mentioned. They have left it to my old friend, the noble Baroness, Lady Thatcher, to incur the odium of saying what the CBI and others have dared to say.

The CBI criticisms sound like a promising preface to my more extensive charge sheet against the European virus of Delorean delirium. We must ask how the CBI reconcile such a damning indictment with support for the Maastricht Treaty on European Union. By the old trick of the sly non sequitur, all that Brussels mischief, they plead, is no reason to abandon the Single Market as the so-called Euro-sceptics would wish". The formidable coalition against Maastricht no doubt includes a minority who are unenthusiastic about the market. But I must repeat the pronouncements of others and tell them and the CBI that if we take courage to block the treaty, as the French nearly did in the referendum that they were privileged to have, the European Economic Community would still stand as the guardian of the single market. Indeed, as an economist my decisive reason for opposing Maastricht is that it is not merely a distraction from completing the market; it is in head-on conflict with that great project.

If professional economists are agreed on anything it is that free trade is the nearest we have to a panacea for poverty, not only in Europe but throughout the world. However, many speakers have argued that economics is not enough and that a political dimension is necessary. They persist in asking the vulgar question, "What is the alternative?" I am pleased to say that the noble Lord, Lord Cockfield, who was one of the principal authors of the 1992 project, gave us the answer. He said that he would have preferred us to complete the economic agenda and leave the political agenda to a later generation. That was his preference and it shall be my policy from this moment forth.

Free trade is much more than the high road to economic efficiency and national prosperity. In the wider tradition of political economy it offers our best prospect of peace and guarantee of liberty. Of course, the central objective of the founding fathers in Europe was political: so to unite the warring nations as to make impossible a repetition of the European civil wars of 1870, 1914 and 1939. But their chosen chief method was economic. It was to supplant the national socialism of the Kaiser and Hitler by the liberalism of Adam Smith and Cobden. In place of protectionism and autarchy, which Smith denounced as mercantilism, the founders sought integration into a single market through the removal of tariff and non-tariff barriers to free movement of goods, services and capital. The common market was a peace treaty based on economic disarmament which rendered impossible the building up of war-like industry.

I may be forgiven for once again quoting the neglected wisdom of Adam Smith. In the great work, The Wealth of Nations, he said, Were all nations to follow the liberal system of free exportation and free importation, the different states into which a great continent was divided would so far resemble the different provinces of a great empire". In short, he was saying that interdependence through trade is a means of spontaneous unification; if you will, a form of natural federalism or, as the absent noble Lord, Lord Joseph, would prefer, confederal-ism.

It was on that precise analysis that the Treaty of Rome promised the best of both worlds—the economic and the political. Under free trade we would enjoy full economic integration as though part of a single empire. At the same time we would preserve the advantages of political decentralisation under otherwise independent governments. In short, we do not need political union, much less Delors' new European empire. Through free trade we could have the invisible empire of Adam Smith. A large bonus is that trade unites people where politics divides them.

Inevitably, so long as each member of the EEC could veto agreements, progress in the removal of barriers was slow and invariably blocked by vested national interests. It was to overcome such obstruction that the noble Baroness, Lady Thatcher, assented to the Single European Act in 1986 which extended majority voting. The lawyers sold the Single European Act as a necessary but limited concession of sovereignty for the specific purpose of completing the market by the end of 1992.

It was the unprincipled exploitation of that measure by the Commission, for purposes far removed from the single market, that first alerted me to worse dangers ahead. In the name of harmonisation, health and welfare, environment, social policy and other innocent-sounding purposes, majority voting has been perverted to overrule national self-government in the interest of creeping federalism, to which the CBI object but which Maastricht would accelerate to a gallop.

We have seen the pressure to impose the 48-hour week, the threat to ban newspaper delivery boys, the imposition of TV quotas, censorship of cigarette advertising, equalisation of taxes and unrelenting pressure for minimum wages, uniform conditions of work and other nonsense. It displays an abysmal failure to understand that free trade essentially depends on differing costs and circumstances—what economists call comparative advantages. As the contrasting fortunes of Hong Kong and Africa so vividly demonstrate, trade not aid is the way to economic progress. The level playing field of M. Delors is the crudest example of flat earth economics.

The case against Maastricht is that it would carry this Euro-phoria further and wider. Majority voting would be extended—and no doubt again manipulated —to include economic policy guidelines, commercial policy, consumer protection, common standards on road, rail, telecommunications, and much else. Increased taxation and spending on a cohesion fund is presented as uplifting poorer members but in practice aims to ingratiate them to M. Delors and his apparatchiks. Above all, enforcement of convergence under Stage 2 of monetary union—plus unceasing pressure to railroad us into Stage 3—threatens to reduce Britain's economic self-government to what the noble Lord, Lord Tebbit, once called the power of a rate-capped local authority.

Labour may say that government from Brussels could not be worse than the regime we have suffered lately under Mr. Major. But Liberals might dimly recall the cautionary adage that self-government is preferable to good government. And Tories might share my doubts whether M. Mitterrand, Herr Kohl and other spent European forces would really provide good government.

After the soft shoe shuffle of the Single European Act, Maastricht threatens a leap towards full federalism with one money, one chancellor and, in the end, one economic policy. As the noble Lord, Lord Carrington, and others have hinted, it is in fact even more out of touch with European sentiment today than when the Euro-elite dreamed it up two or three years ago. It is not wanted and I have absolutely no doubt whatever that it will not work. But in the process of over-toppling, it would almost certainly stop progress towards completing the market and bring present gains into jeopardy.

My Lords, for what purpose? Is it to appease the most extreme federalists in France, Belgium, Germany, Italy and Spain—all with their own differing national anxieties, ailments and appetites to be relieved or gratified by ever more centralisation, subsidies, harmonisation and disguised protectionism? I was alarmed when the noble and learned Lord, Lord Howe, warned us against strong expressions of the kind I am now uttering because it might "try the patience of our European partners". I shall try their patience again. Or are we to be mesmerised and intimidated by slogans? Must we keep on the Euro-express despite the fact that it is speeding towards the buffers? Must we be at the heart of Europe at any price, as though you would help people struggling in quicksands by jumping into the middle? Or is Britain's best contribution once again to stand her ground, and with wise counsel on completing the single market, seek to save our European friends from this collectivist folly?

8.23 p.m.

Lord Elton

My Lords, I live on an island and I am British. It is not surprising therefore that I have an instinct against the subsumation of the British Isles into a coalition of European powers with whom we have been fighting wars over the centuries. Most of your Lordships share that instinct. I have a stronger motive because I am half Norwegian, and a great part of Norwegian history has been spent trying to struggle out from under the domination of the European power of Denmark. But having said that, I must tell your Lordships that instinct is a very bad counsellor and we should not be counselled by it alone tonight.

One has only to look round the world to see what a mess instinct has got us into. It is because of instinct that man, whenever he is outside constraining constitutions and institutions, resorts to fire and the sword to gain his ends. It is because of that that so much of the world is in such a desperate state now. Several of my noble friends have already pointed out that the European Community has already achieved the construction of a constraining institution which makes the use of fire and sword between individual members of Europe unthinkable. But it should not be thought that that is a permanent solution. The Tsar of Russia thought that he had a permanent settlement for peace in the constitution of Russia. Stalin thought that he had a permanent settlement for the maintenance of peace in Soviet Russia. What we need to tell the third generation referred to by my noble friend Lord Cockfield is that the veneer of civilisation with which the savage human being is coated is very, very thin and that a few bricks falling down from a constitutional edifice in Moscow have scraped it off the Azeris who are now waging a war of genocide on Nagorno-Karabakh. If my children believe that it is sufficient to repose upon the efforts of my generation and your Lordships for the maintenance of peace in Europe, they will be sadly mistaken. We have a duty not only to build but to maintain this secure institution.

My noble friend Lady Thatcher—I am very sorry that she has had to leave at this moment—sought to persuade your Lordships that it would all be all right if we went away from Maastricht because there was still the Treaty of Rome and nothing would change. But I fear that she did not persuade me—nor will she persuade many of my noble friends that it is possible to return to the status quo ante. Almost all of our partners have already ratified; the rest will. They will not abandon their objectives because the UK decides not to follow them. That is the political reality. A failure to ratify now would have a whole series of consequences. It would frustrate enlargement; it would condemn the European Community to a long period of introspection; it would marginalise this country—I wish to emphasise that point—at a great economic cost. One thing it would not do would be to return us to the status quo ante.

When my noble friend stood to make her sterling speech she reminded me of a retired huntsman blowing the horn outside a stable in which I, as one of her former Ministers, was stabled. As I heard the horn it made my blood thrill. There was a pawing of the hooves and a shaking of bridles and I think I heard a whinny or two in the stalls behind me. But the fact is that that is instinct calling again—the instinct of the chase. I think in any case that she is hunting the wrong fox.

The question we have all been asking tonight is the wrong question. We have been asking each other: wouldn't it be dreadful to go in; wouldn't it be worse than it is now; or, alternatively, wouldn't it be much better; wouldn't we be much stronger? But the question we have to ask is: what would it be like outside? I do not think we have the option of staying outside fortress Europe, outside fortress America, outside fortress ASEAN. Even if we were a great power I do not think that we would have the strength to stay still while the tide of history flowed past us. Even the United States of America is building an economic community around itself consisting not only of North America but of South America as well.

The world is a dangerous place as we can see if we look merely into Yugoslavia—certainly into the whole of what was Soviet Russia. The world is moving into bigger blocs. We cannot any longer live in the past, pretending we are a great power without the resources of a great power; pretending we have a commercial empire when we have none. We have to go into Europe. Let us certainly get the best terms we can but we must ask what do we do with it? The big issues facing us now are not the qualified majority but GATT and the reconstruction of the Soviet Union— the things that the muscle of Europe enables human beings to do which our diminishing resources do not allow us to do on our own.

My final reflection is this. And I apologise to perhaps three of your Lordships who were here for the economic debate when I mentioned it before. The whole of this question seems to be put into a proper perspective if one does not look at it from where one is sitting now, in this Chamber, on this island, on this continent, on this very small globe. Some years ago I went to a conference and heard an astronaut speak of what happened to him—in fact, it was a her; a Russian astronaut—as she looked back at the world from space. Earlier I heard a male American astronaut saying exactly the same thing. They said that once you get out there these little differences are incomprehensible. The question is not who should have what trade agreement, but where are these differences? There is one globe unsupported in space and one human race, the divisions within which cannot be detected. One has only to pull back to the edge of our own little galaxy and the world disappears. We are on a perilous little fragment of matter in a huge space. The question is whether we shall survive. I regret to say that the approach which I found most compelling came from the Liberal Democrat Benches and from the noble Baroness, Lady Williams, who asked: What can we give to Europe? It seems to me that we should be looking at those countries as co-survivors and not as rivals.

The question is how we can make Europe stronger to contribute to a world which is strong enough with its ever-multiplying population, its ever-increasing pollution and its ever-diminishing finite resources. How can we get it to survive? In the political context I am certain that the direction of survival lies in Europe and not outside it. There are many other issues such as religious issues which I burn to detain your Lordships with, but this is not the occasion. I merely ask your Lordships to consider this question in its global context as well as its historical one. The historical context is the flow into bigger and stronger blocs outside of which we shall become a nonentity. The global picture is that we are in a parlous position as a human race and we have not that much time to put it right. That is the way to go.

8.32 p.m.

Lord Selsdon

My Lords, I am very concerned this evening that I may say things that I have already said before. Therefore, I take as my text St. Matthew: Use not vain repetitions, as the heathen do; for they think that they shall be heard for their much speaking". I could go on in that vein, but the humour is not with me. I brought the wrong glasses tonight. I had a very old speech which I intended to deliver to your Lordships exactly as I delivered it 21 years ago, knowing full well that none would know the difference.

Tonight I feel that to speak about trade, economies and things of that kind which have been spoken about again and again, is wrong. Therefore we should look at what is really a most boring issue. What an incredibly dull script! For the life of me I cannot understand why it should have attracted so many of us today. I believe that for every line there are now two actors; for every line in the Bill there are two speakers. One realises that often great plays do not have great words, but great actors. One looks back, as noble Lords will remember, to the Writ originally made in about 1641 when in Latin we were summoned to this place as, "Prelates, great men and Peers". I am not a Prelate and no Prelates are speaking on this subject. But the great men and women we have already heard today and those who will follow tomorrow are making a tremendous play out of a dull and boring plot. That is to be admired.

What are we for and what are we against? I believe that probably we are all for the same thing. I have already mentioned the heathen. It would be wrong to apply that title to us because most of us are not heathens; we are either Jewish, Christian or Moslem. But are we heretics and who are the infidels? I understand that a heretic is someone who will not accept the practised theology. We have had heretics today. An infidel is also someone who will not believe the beliefs of the speaker, and no doubt after I have spoken there will be many infidels.

Therefore it seems to me that those who handbag and those who sandbag may be deemed to be heretics or infidels—they are one and the same. At one extreme we have those who say "Over my dead body; we shall never be a member of the European Community and I wish that we were not". At the other extreme we have those who say, "Everything is great and good across the water. If only we had listened to them long ago we would have a strong economy".

Therefore heretics and infidels—the goody-goody Europeans and those who say that it will never do us any good—are one and the same. Where then do many of us stand? Not being a heathen, I thought I might find myself in the middle. As my noble friend Lord Parkinson told us in his remarkable speech today, I was very pro-European at one time. Then I became very anti. Today I have suddenly decided that I am not quite sure what Maastricht is about. I have read the Bill and I have tried to understand the treaty. I did a little research to find out where it all came from. As your Lordships know well, "Maas" is rather a boring word. It is effectively a Boer word. It is a Zulu word for a rather peculiar kind of sour milk which becomes more sour and more acidulous when it is kept in a leather bottle.

Therefore, I wondered what was "a Maastrichtian". I found at last that your Lordships are all Maastrichtians whether you be Prelates, great men or Peers. I am told by those who believe that geology came before religion and man had the duty to understand the earth that a Maastrichtian pertains to a division of the upper cretaceous in Europe—or the upper crust; a stage which is generally recognised as a brief interval during which many organisms underwent a severe attenuation in diversity or became extinct.

Maastricht and the Bill will become extinct. It will be yesterday's Bill. It is utterly irrelevant to the affairs of men and of Europe. It is but a passing phase. But it exists. If it did not exist we would have to invent it because we would have no plot or play. We would not be able to assemble here more great men, Prelates and Peers than have ever spoken on any single matter. It is approximately one-third of the total normal attendance at your Lordships' House and about 12 per cent. of those of us who could ever appear here should we so wish. Why are we giving it such great attention?

Twenty-one years ago or more we were having the same debate. My noble friend Lord Cockfield raised the point. Are we debating whether we should be a member of the European Economic Community of however many it is? I do not know. In those 21 years what has happened? In that time 25 per cent. of the population was not alive at the time. They had not been born. Fifteen per cent. of the population is now dead and as time goes by so that change will continue.

I thought that I had already heard from the generation that came before me and I believe that I know what my own generation thinks. So I thought that I would ask the generation that came after; namely, those at the top end who were not born at the time when we decided to join the EC. They pointed out that they really did not agree with any of us. They liked the idea of Europe because, after all, it is there. They liked free travel and all the simple things about it, but they did not like some of the other things about it.

Then, when I was consulting in the Clerks' Office just now, it occurred to me to ask, if I was not a heretic nor an infidel, what was I? I decided that I was a zealot, which is someone who passionately believes in a particular topic or subject. As a zealot I say that, when one looks back, plus ca change. Then one remembers the cartoon of two small children, one male and the other female, peering down at each other and the phrase vive la difference!

We should now seek to go all out to promote la difference. We have had enough of trying to be the same. If we do not like something, we should speak about it. I do not want to have a European passport. In fact I might even try to cheat and never have one of those funny little red things. I do not want a European number on my car. I do not want a German car. I have prejudices, but I have a form of patriotic feeling within me. I think back and look at our own history and where our Writ came from, and I feel tremendous loyalty to the Queen and the Royal Family. There are six sovereigns within the EC.

I support this Bill because it will soon be gone. It is another stage which gives us the chance to influence and advance on other people and make our own views felt. If we complain of bureaucracy, certainly one of our problems in this country is bureaucracy—the bureaucracy of the Treasury. If we could export our own bureaucrats into the system abroad, we would have a much better run operation, because they could run better and greater things than a small country like our own. I sit down with the phrase, "I will die for my Queen; I will die for my country, but I will not die for Europe".

8.39 p.m.

Lord Howie of Troon

My Lords, we have heard a quite remarkable speech from a man who forgot to bring his glasses, but I have heard the noble Lord, Lord Selsdon, speak previously and he did not have his glasses with him then either. I do not believe that he uses his glasses except as a kind of prop which he produces from time to time to confuse us. I am a little like him in some ways (although I have got my glasses on) in that I am not a dedicated European but nor am a dedicated non-European.

Older Members of your Lordships' House might remember the great debate in the 1970s which was instituted by Sir Edward Heath when he was Prime Minister. I think that it took place while we were deciding whether to enter the Common Market, as we called it in those days. I opposed entry at that time because I thought that it was a mistake. I can remember debating the matter during the great debate with the noble Baroness, Lady Williams of Crosby, in her then constituency of Hitchin. She won the debate hands down, which was either because she was a better debater than me, which is likely enough, or because they were her constituents and they were devoted to her, which is also quite likely although that wore off after a bit. I was defeated in that debate (among others) on the great debate. When the time came to have a referendum, many years later, I thought that as we were in I would vote in favour of staying in, because I do not think that there is any great point in fighting old battles, except very old battles, and that was too recent.

Our presence in the Common Market—the Community—has turned out much as I expected during the great debate in the early 1970s. It has turned out disappointing to both factions. It was neither as glorious as the pro-marketeers had told us (and expected) that it would be—nor was it actually as bad as those of us who were opposed to entry had feared that it might be. I see the noble Lord, Lord Stoddart, turning towards me so I shall say that, on the whole, I think that the "down" side was rather stronger than the "up" side—but only marginally.

However, it is too late to come out. We are deeply in and there is nowhere to go. When we debated this in the 1970s we thought that there were some alternatives and we laid them out but, as an earlier speaker said, those alternatives no longer exist, so I support the treaty. We are in the Community. It has not turned out to be as bad as we feared nor as good as we had hoped, but we are in and we have to go with the stream because the stream will not turn away.

That brings me to the question that underlies much of the opposition to the treaty and which was well and passionately expressed earlier today at the beginning of the debate by my old personal friend the noble Viscount, Lord Tonypandy. He spoke passionately in favour of the sovereignty of Britain. I was impressed by his passion but amazed that he should feel that way because the noble Viscount lost his sovereignty about 400 years ago. He seems not to have noticed. In the meantime, he has become a passionate Britisher—or so it seemed today—although I believe that beneath his Britishness there lurks something more desirable. There is, however, a lesson to be learned from his passion, and it is this: if so real a Welshman can become, over the passage of time, a passionate Britisher, is it just remotely possible that a Britisher could eventually become a partly passionate European? It is harder, I know, but for a Welshman most things are possible.

In that respect, I believe that it was the noble Baroness, Lady Thatcher, who said earlier that if we lose our sovereignty, laws might be passed in Brussels against the will of the elected representatives in Britain. There is nothing new about that. It will be within the recollection of the House that laws have been passed in this assembly against the will of the elected Members of Scotland. There are hardly any Conservatives in Scotland and there are hardly any elected Members in Scotland who approve of many of the laws that have been passed here, so there is nothing new in that particular argument. It is something to which people in elected representative assemblies become accustomed, and just as the Scots have got used to it, up to a point, in London, so will the English get used to it in Brussels (or wherever these things are eventually to be carried out) if they are as adaptable as the Welsh and the Scots.

That brings me to the whole question of the nation state and subsidiarity. The noble Baroness, Lady Thatcher, made some play in her notable speech about the nation state. The first question which arises is: has the nation state been such a good thing anyway? I shall not go into that in too great a length because time is getting on. Secondly, are the nation states, about which she talked, all that old? How old are they? We know that the United Kingdom goes back to 1707. It was modified in 1801 and again in 1922. Who among us will put his hand on his heart and say that that modification of 1922 will last for ever? I should have thought that the Irish dimension in the United Kingdom would change within our lifetimes—and I sincerely hope that it does, in some peaceable manner. Therefore, the nation state is not as ancient as might be thought.

Let us take Germany as an example. Germany might be thought to be about 150 years old but, by another accountancy, the reunited Germany is two years old. It is very new. That reunification is possibly part of our economic problem. Italy is 150 years old and Belgium is about 170 years old. In terms of history, they are relatively new. And have they done all that marvellously well? Let us think of the nation states in the communaute des patries, as it has been called. Let us think about how their economies have been a generalised shambles, and let us think about their quite remarkable performance over the question of Bosnia. How on earth could a federal state (should such a thing occur, and it would not frighten me if it did) make a greater mess of things in Bosnia than the communaute des patries has managed to do in recent years? I do not think that that point is arguable.

So, there is no magic about the existing states and I believe that the concept of subsidiarity should replace them. Subsidiarity should not necessarily stop at the Channel or here in Westminster. Subsidiarity would shine every bit as brightly in Cardiff, for instance, or in Belfast—and certainly in Edinburgh and, preferably, even in Glasgow. It might even shine brightly in Leeds or Plymouth if the people of Leeds or Plymouth wished such a thing. It is up to them.

Subsidiarity need not relate merely to the nation state, because it is a subsidiarity of regions. Those regions might be former nations such as Scotland, Wales, Tuscany, Northern Italy or Schleswig-Holstein. Why should Schleswig-Holstein be part of Germany just because Bismarck seized it? That is a parenthesis. I do not wish to pursue it too far. Those regions have every right to enjoy the benefits of subsidiarity as much as the so-called and, I believe, outdated nation states. If that sounds as if I am in favour of some kind of federalism to replace the nation states with a body of smaller organisations with a central power, that is something of which I am not frightened. I am not in a hurry, but if it happens I shall be quite pleased.

That brings me to the issue of a common currency. We need a common currency for one reason and one reason only: it is hardly likely that we can make a single market work with a multiplicity of currencies, bureaucratic exchanges of currency and speculators in the currency business. It is possible to make the system work, but it is not the right way to do it. There again, we can look at our own history. We set up a single market in the United Kingdom 300 years ago. What did we do? We established a common currency. It was called the pound sterling. I do not believe that there is anyone in the Chamber, no matter how opposed that person is to the common currency, who would stand up and say, "Bring back the Scots pound and the groat". Those things have gone, and the pound sterling can happily go with them.

We have been told that the treaty would lead to increased centralism. That might well be right, but it comes ill from the Benches opposite, because we have had an increase in centralisation in this country over the past 10 or 12 years which has been remarkable. It has been centralisation from local government to central government here in London. The principle is the same. What is good for the goose is good for the gander.

The opponents of the treaty are falling into an old British trap. It may well be an English trap. It is that if there is something to be done, or some organisation to be joined, they will always do it or join it when it is too late to influence it properly. The noble Lord, Lord Ezra, drew our attention to the conference at Messina in 1956 or so.

Lord Ezra

My Lords, 1955.

Lord Howie of Troon

My Lords, I am sorry, it was 1955. Right at the beginning the Government took the wrong step. If they had taken the right step then the entire structure would be different. They took the wrong step then, and what is interesting is that in the natural English way they took the wrong step again every time that the step was offered to them. They are doing it again. What they want to do is to behave like King Canute, but with one difference. Canute, your Lordships will remember, tried to put his feet in the tide to demonstrate that the tide could not be held back. On the other hand, the opponents of the treaty are putting their feet in the tide in the hope that it will go back. They should know better, and soon they will.

I wish to make a remark about the referendum. Although I believe that we should ratify the treaty, abide by it, support it, and make it work, I support the notion of a referendum. I do not do that because of any thought of party manifestos at the last general election. I have always regarded party manifestos as a species of imaginative literature. I have hardly ever read one. I am astonished that other members of the House have gone so far as to read the party manifestos, even in the days where they had to stand for election. What is certain is that the voters do not read the manifestos, nor are they weighed or swayed in any way by what is in them. That is an irrelevance. It is a debating point.

The reason for having a referendum is a simple one. There are a number of issues of great importance which have nothing to do with party politics. Constitutional issues are among them, even though party politics might impinge upon them a little. When a constitutional measure is proposed, the people should be asked. There is only one reason why they should be asked. That is because it is right to do so. The people probably understand the issues as well as we do, but if it turns out that they do not, it is up to the politicians to explain them and to teach people.

It is just possibly too late for a referendum, not for the reason given by the leader of my party, my noble friend Lord Richard—that the matter has taken too long to go through Parliament—but because the referendum should probably have been held on the single market issue. The single market did the things which the treaty is now putting into treaty form. The Maastricht Treaty, whether or not it goes away in due course as the noble Lord, Lord Selsdon, said, should be supported. I believe that we should have a referendum to validate our support for it.

8.56 p.m.

Baroness Perry of Southwark

My Lords, early in the debate several speakers asked for some show of enthusiasm for the Bill from these Benches. Since then, we have had some, and I am happy to declare my wholehearted and enthusiastic support for the Bill, to outline some of the reasons why I feel so and why I welcome the next steps towards European monetary and political union.

As the noble Lord, Lord Howie of Troon, has just said, with great humour and imagination, too often the debate has seemed to have been about whether this country should become a part of Europe. That decision, as he said, was taken a long time ago, and if Maastricht were to fall we would, at best, be back where we were before, with all the examples of interference in the minutiae of national regulations still remaining. The treaty establishes the supremacy of the Council of Ministers over the Commission. Enhanced by the decisions that were taken at Edinburgh, it provides thereby a better democratic accountability from individual Governments to the central European structure. Furthermore, it provides, in the simple principle of subsidiarity, that the burden of proof for the need for Community action rests with the Community. To quote the words of the treaty, the Community can take action: only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States". That principle takes us away from much that has irritated in the past, and it has already begun to work. I understand that over 30 items of legislation have already been dropped because they fail the subsidiarity test.

One of the best examples of the principle of subsidiarity in practice lies in the area of education, vocational training and culture. It is right for us to give a few moments of attention to those important, even if more low key, aspects of the treaty, and to reflect upon what has been achieved and what will be better accomplished now. Articles 126, 127 and 128 of the treaty provide that the Community shall contribute to: the development of quality education, —a goal to which we should all subscribe— the implementation of a vocational training policy and the flowering of the cultures of the members states while respecting their national and regional diversity and at the same time bringing the common cultural heritage to the fore". In all three of those areas the measures which the council takes to achieve objectives and to create incentives specifically exclude any harmonisation of the laws and regulations of the member states.

It would be difficult to over-emphasise the importance of Community action in respect of education and vocational training. One important long-term aspect of the European Community is the opportunity and Community finance for young people to study in any country of the Community during their courses while obtaining credit for such study towards the degree or qualification of their home university.

In the past few years tens of thousands of British students have spent part of their undergraduate or postgraduate studies in another European country. Many courses now embrace a European community of students with young people from six or seven different Community countries studying together. Under this programme for student mobility—known as Erasmus not only as an acronym but also to recall to us the tradition from the Middle Ages of trans-European university study—students can, for example, enhance their studies of business or economics, architecture or engineering by study and industrial work placement in the businesses of a second European country. Equally, under the Community-financed Lingua programme students are encouraged to widen their study of European languages, becoming competent in the technical and business language of other countries as well as in everyday conversation.

These educational opportunities are mirrored in the opportunities for vocational training where, coupled with the improved fluency in languages, the aim is to create a mobile workforce at home with the industrial, commercial and professional practices of any member state of the Community and contributing to the Community's overall wealth and competitive position within the world market.

In the field of culture few would dispute that our culture is more than any individual nation's alone. We in the United Kingdom are, and have been for centuries, part of the mainstream of European culture. The history of the philosophers, artists and writers of Europe stretches far beyond the boundaries of any single nation. In days when travel was infinitely less easy than it is today we marvel at characters such as Eleanor of Acquitaine who in the 12th century seemed to stride across Europe spreading the romantic culture of the courtly musicians and poets of her home country throughout her adopted land of England to Spain, Italy and beyond. Since the days when the Caesars of Rome united Europe under their benign military rule bringing law, architecture, literature, technology, music and a common language, there has always been more to unite the countries of western Europe than there has been to divide us. How right it is that the Treaty of Maastricht should reaffirm the dissemination of the culture and history of European peoples; that it should conserve and safeguard the European cultural heritage and the European artistic and literary creation.

Under Maastricht the Community would provide education, training and employment on a multinational basis. One can only hope that this will help our still under-achieving country to achieve some of the educational standards taken for granted in countries such as Germany, Switzerland, the Netherlands and France where I personally have seen students performing at a level far above that achieved by our own 15 and 16 year-olds.

It is because of the power of this vision of a culturally united Europe that I personally hope we proceed with commitment and enthusiasm along the path towards monetary union. The negotiating skills of our Prime Minister and Foreign Minister have allowed us more time to consider the UK's position within the European monetary system. My noble friend Lord Carrington is right that it will in any case take Europe a very long time indeed to achieve that goal. But it is essential that in the steps towards union Britain plays a leading role and is not assigned to a role of a shrinking violet or, perhaps even worse, a permanent wallflower with whom nobody wants to dance.

Of course we have an emotional attachment to our own currency. It carries with it echoes of childhood pocket money and of the purchasing power of our youth. But the preservation of national currencies within a common market has never been a permanent option and it is an expensive and wasteful way to run economic union. I was vividly reminded of this when a week or two ago I had to make a short visit to northern Sweden. As I left Heathrow airport I cashed £50 sterling into Swedish krona to allow for airport taxis and other minor expenses. In the event my hosts met me at the airport and drove me back later, and my hotel bill and my air fare were paid by the British Council. I therefore returned to Heathrow with my wallet unopened and the krona that I had received for my £50 still intact. However, when I changed those krona back into pounds sterling I received just £42. The fluctuating exchange rate and the costs of the two exchange transactions had in two days reduced my £50 by almost 16 per cent. Envisage this on the massive scale of inter-country market trading and we have not a minor amused irritation but some view of how expensive these separate currencies can be.

I wish to say a final word about what we are led to believe by the opponents of the treaty is the ultimate bogey of political union. Much of this debate is not about practicalities; it is about emotion and about deeply-felt instincts and childhood memories. For many of us in this House the memories of Europe's recent past—the past of our childhood or our youth—are still vivid. There are memories of the battlefields of Normandy or Italy and memories of the Blitz and the destruction of the great cities in Holland, Germany and Britain. I too was a frightened small child in 1940 hiding in the cellar of my parents' house. I was brought up to love and to be proud of my country, as I still am. But I also believe that the vision of political union is the only real alternative to the narrow nationalist rhetoric which caused centuries of that kind of war and destruction which we have seen throughout the history of Europe.

Citizenship of Europe, yes, perhaps, with rights and duties including an overriding loyalty not replacing our loyalty and love of our own country but enhancing it by something greater. This is not just a price worth paying; it is a prize to be fought for and treasured. It is that vision which this Bill offers long-term as a goal towards which it takes us one more step. It is a step which we must take for our children and grandchildren because, as has already been said, no alternative has been offered. I believe that the alternative is unthinkable.

9.7 p.m.

Lord Skidelsky

My Lords, I find myself on a tightrope on this issue; a typical position for an academic, you may believe. I speak as a pro-European anti-federalist for whom the Maastricht Treaty is a pretty tawdry flag under which to have to sail. It is a treaty full of contradictions and dangerous where it is not irrelevant. It offers us neither spiritual nourishment, a safe future nor material reassurance. Yet I agree with those who say that we should ratify it, put it behind us and move on. We have wasted too much time on the debate: critics warn us against things which will not happen; supporters claim triumphs of British diplomacy invisible to the naked eye; most of us ignore the real dangers which threaten and the real opportunities which beckon in the 1990s.

In his speech to the Conservative Political Centre European Conference on 20th February the Foreign Secretary hailed Maastricht as beginning a process of decentralisation. He cited acceptance of the principle of subsidiarity and the three pillar concept of the Community in support.

I do not see it in that way. I know that the word "subsidiarity" has many subtle overtones but to me its root is "subsidiary". Subsidiary means secondary or subordinate. A subsidiary company is owned by another. To invoke the principle of subsidiarity in defence of national jurisdiction is already to use federalist language.

The Foreign Secretary gave the game away when he talked about "the decentralising principle of subsidiarity". You can only decentralise from a centre. I should not concede that there exists an independent centre of political authority in the Community from which powers must be repatriated. That is federalist gobbledegook.

The Foreign Secretary made great play of the fact that two of the new Union's three pillars—foreign and security policy, home affairs and justice—give rise to no new Community powers. We are assured without the trace of a smile that the Commission will have no exclusive right over initiative on foreign policy. But before Maastricht, it had no right at all in those areas and there was only one pillar; namely, the Economic Community. Now there are three. Moreover, the treaty sets up a single institutional framework for all three, culminating in the Council of Ministers.

The noble Baroness, Lady Williams of Crosby, said rightly that Community foreign policy can be made only by unanimity. But can anyone doubt that the pressure will soon be on to extend the qualified majority voting rules which now apply to the single market also to the other two pillars? What has happened is that skilful diplomacy by John Major and Douglas Hurd has won temporary concessions from the centralisers, but Maastricht in conception represents a step forward towards federalism and away from confederalism. It seems to be dishonest to pretend otherwise.

I look now at the other side. The critics have spent a great deal of time warning us against monetary union. They say that a single currency is not necessary to complete the single market; and I agree. They say that its real purpose is to be the building block of a European state; and I agree. If you deprive a state of the right to adjust to a shock by altering the value of its currency, you must have a system of automatic transfers from the centre to make life tolerable for the afflicted state. At present the European Community budget is far too small to do that so it must be enlarged. Therefore, the power of the centre must be enlarged also.

There are strong technical arguments against delegating monetary authority to a central bank charged with maintaining price stability. I am very much in favour of price stability—who is not?—but that is only one goal of macro-economic policy, although no doubt it is the most important. It is odd to declare it to be the only goal at a time when unemployment in the EC averages 10 per cent. That kind of bankers' regime, if it ever came to pass, would intensify pressure for putting a political authority above the European central bank. If Keynes taught us anything, it was that output and employment are too important to be left to bankers.

But does anyone now believe that the next two stages of monetary union will come to pass either in the time span or in the form envisaged by the treaty? Surely they do not. Currently the preconditions for Stage 3 are met by only two of the 12; that is, France and Luxembourg. By 1996 how many of the 12 will have had behind them the two years of EMS membership at unchanged parities which is another precondition of monetary union?

If monetary union occurs at all—and it is a big if—it will be multi-speed with not all members joining at the same time and others joining who are not part of the EC. Leaving aside our own special opt-out arrangements, that is one of those blueprints which cannot be made to happen quickly on a European-wide scale and can be made to happen for any individual state only as a result of a conscious, sovereign decision to run monetary and fiscal policy in a certain way. If one thing is certain it is that twixt that cup and lip, there will be many a slip and it is not worth spending too much time worrying about the quality of the wine.

I agree with the noble Lord, Lord Jenkins of Hillhead, that in other respects Maastricht reflects more the atmosphere of the 1980s than the dangers and possibilities of the 1990s. The strong drive towards political and economic integration in Western Europe was a West European phenomenon that was born originally of the desire to overcome Franco-German rivalry, and was latterly driven by the exigencies of the Cold War. The tearing down of the Berlin Wall in 1989 has removed much of its inherent logic, while disclosing new problems for which different kinds of institutions and arrangements will he needed.

Deepening the Community, which is the goal of Maastricht, requires a higher degree of consensus than that which now exists, while the costs of German reunification are already straining the existing consensus. Beyond deepening the Community, what relevance does the tight little club of six that was envisaged by the founding fathers have to the Community of 20 or more members that are likely by the end of the century? One cannot deepen and widen at the same time without creating a multi-tier membership, so divergent are the conditions between Western and Eastern Europe. If widening is the name of the game, the priority surely is to extend free trade to the East and not to tighten up the Brussels screws in a vain attempt to create a level playing field in the West. The opening to the East will impose costs on an already sclerotic Western Europe, thus reinforcing existing strong protectionist pressures. That pressure will be all the greater if we are absent from Europe's counsels.

The end of the Cold War has completely transformed the security situation. The NATO system which bound together the United States and Western Europe in opposition to the Warsaw Pact has lost much of its raison d'être. That situation has suggested to many Europeans the need for a serious European military capability, and the second pillar of the treaty has reflected that suggestion. However, another pattern is in place for security arrangements: American leadership, legitimised by British and French co-operation in the UN Security Council, a body from which Germany remains excluded. We have a crucial role to play in bridging the two security systems.

Maastricht was intended to give a reunited Germany a benevolent role in the European family, but a reopened Central and Eastern Europe may prove to be a powerful enough attraction to draw a reunited and distracted Germany into its old dream of Mitteleuropa and away from France and a Western confederacy. A German dominated Mitteleuropa under the present circumstances might well favour a Russo-German alliance, a belated triumph of Gorbachev's diplomacy and perhaps for Russia's European strategy throughout much of the Cold War.

As a counterweight, France might then re-orient itself towards Britain and the Atlantic Alliance and pursue de Gaulle's old dream of a tri polar directorate for global policy. Such a diplomatic revolution, if it took place, would presumably spell the end of the great post-war experiment to reconcile France and Germany and build a powerful European confederation around them. Do we want that to happen? Should we not be there in order to use our influence to stop that happenin?

As I look into my crystal ball, I do not see the emergence of a powerful West European super state so much as the impairment of what has already been achieved. That is why Britain should do nothing to impair its influence on what happens in the 1990s, which a rejection of Maastricht would certainly do. It would be a paradox, though not an improbable one, if Britain should turn out to be the anchor of political and economic stability in the Europe of the 1990s, fighting not against a new super state but against the centrifugal forces that were unleashed at the end of the Cold War.

I turn briefly to the issue of the referendum, only because I have something to say that has not already been said. If my remarks have any validity, the Maastricht conception—to use the phrase of my noble friend Lord Carrington—is even more of a hypothesis than he allowed. I am instinctively opposed to a referendum on a hypothesis. The situation was different in 1975: then it was a question of whether we left or stayed in the Community. This time the referendum would concern whether we enact a treaty which contains plans and tendencies which we may dislike but which are very unlikely to come to pass.

Opposition to European Union is dictated far more, I suspect, by fear, panic and lack of self-confidence than by reverence for our island traditions, although I accept that that reverence is genuine among many of the opponents of Maastricht. Were we a self-confident nation, we would not be conducting the debate in these terms. The tone of our leaders is defensive and reluctant. I do not want us to whinge outside the Community but to fight within it for our alternative vision—a vision which is generous and welcoming to a liberal Europe stretching from the Atlantic to the Urals but unyielding in its opposition to bureaucracy and centralisation.

My noble friend Lady Thatcher understood the need for an alternative vision when she made her Bruges speech in 1988. However, its tone was too negative to evoke any European response. We need to discover the art of expressing generous ideas in our own distinctive language. Since the war Europe has been made what it is by words far more than by deeds. If we can find the right words now we still have a chance of shaping a Europe closer to our desires. I urge the House not to throw that chance away.

9.20 p.m.

Lord Bridges

My Lords, we have had a most interesting and instructive debate with some remarkable and a few memorable speeches. It is a pleasure to follow the noble Lord, Lord Skidelsky, who gave a most interesting and reflective speech. I am surprised only by his choice of reading matter in that he was apparently looking for spiritual nourishment in reading the Treaty of Maastricht. That is perhaps an odd place to look for spiritual nourishment.

I note also with some amusement the actions of those responsible for controlling the temperature of our House, as it would appear that the authorities were expecting a far more heated atmosphere to develop than has been the case.

I am one of those who welcome the appearance of the Bill in this House. I wish it had come sooner. Looking back I doubt whether anything has been gained by the delay in proceeding with the Bill. The decision to halt its progress in another place after the result of the first Danish referendum did not produce any benefits for us in this country and it greatly increased the uncertainties here and elsewhere in Europe. I believe it would have been much better to have allowed the Bill to proceed on its normal course, notwithstanding the decision of the Danes in their first referendum.

I believe there was something ignominious about waiting for our Danish friends to make up their minds first. I believe the original timetable should have been pursued. Instead the delay has been damaging to our standing and influence abroad. The message we conveyed to our European partners was not, as we promised, that we were aiming to be at the heart of Europe. Rather we have shown ourselves to be among the faint-hearted, the uncertain and above all the disputatious. It will take us a long time to recover from this position in the European Community.

However, the Bill having arrived at last, I hope we may deal with it as expeditiously as possible and pass it without amendment. It is true that the provisions are now somewhat dated, particularly as regards the timetable towards European economic and monetary union. It is fashionable to argue in some quarters that the events of last September have consigned the objective of EMU to limbo, but I suggest that we must be careful not to draw the wrong conclusions from Black Wednesday. I suggest that what that episode showed was that those managing our financial affairs did not fully understand how overvalued our currency had become. Of course it is always easier to recognise these things with hindsight but overvalued the currency certainly was given that the domestic inflation rate in this country since we joined the ERM greatly exceeded that elsewhere in the system. What we should recognise now, I suggest, is that as the recession wears off inflationary pressures may well resume. If that is the case, we shall again become conscious of the importance of fluctuating exchange rates on internal prices and on export orders.

Therefore, the objective of the EMU is not necessarily wrong; rather we need to pay more attention to convergence policies in the period preceding the Union. I was glad to note recently a speech by Herr Tietmeyer, the vice president of the Bundesbank, who emphasised the importance of maintaining strict convergence criteria. Surely he is right about that. If the dates in this part of the treaty now appear unduly ambitious we should not abandon the entire policy on that account. Those who do not share that view can be reassured by the explicit reservation in the United Kingdom protocol attached to the treaty.

I must emphasise to those noble Lords who appear not to understand or believe this that it remains for this country to decide whether it wishes to move to Stage 3 of the economic and monetary union and to move to a single currency. Nor is there any obligation in the treaty for us to join, or rejoin, the exchange rate mechanism. Those elements in the treaty are surely sufficient safeguards for the protection of our national interests and for decision by Parliament when the time comes. That is also contained in the treaty.

The treaty also meets our national requirements in the important articles covering defence questions and on matters relating to justice and security problems; namely, those dealing with fraud, drugs and immigration. It is a very satisfactory outcome that the defence subjects are to be handled by the Western European Union and that justice and security matters will be dealt with on the basis of intergovernmental co-operation. That is a wholly new departure in the evolution of Community institutions and a significant gain for this country. It is our own preferred way of handling those subjects. It would be most unfortunate if those gains were not secured by ratification of the treaty.

The decisions which Parliament will take on the treaty are highly significant for our future foreign and defence policies. We should be in no doubt about the message we should be giving to our partners if we decide not to ratify: that we have rejected the new and broader relationship which our Government have obtained and which our partners have offered to us. Their reaction cannot be predicted with any certainty should we reject the treaty, but in my judgment failure to ratify would lead to the creation of a tighter union by the original six signatories of the Treaty of Rome. By opting out we would confine ourselves to a subsidiary role on the fringe of Europe, not participating in the decisions of the inner group but remaining vitally affected by the outcome. I cannot believe that that would be in our long-term interest.

Perhaps I may reply to the argument put forward by the noble Lord, Lord Sharp of Grimsdyke, and other noble Lords, that the fact that we have a massive deficit on our visible trade with other member states somehow gives us a bargaining counter over them. I do not follow that line of reasoning. It does not seem to me that if we were to leave the EC we would be better able to cope with the situation from the outside, unless it is proposed that one should resort to protectionist measures to control imports in the old fashioned way. The only remedy in this situation is surely to increase the efficiency of our own manufacturing industry and to maximise our exports to EC markets.

I also beg to differ from those noble Lords who have argued in favour of a referendum on the treaty. I shall not go into that argument now as there may well be opportunities for us to address the subject more fully in later stages of the Bill, but I would expect to vote against any amendment to that effect.

I suggest one other reflection on ratification to your Lordships; that is, that the only meaningful decision to be taken by Parliament with regard to ratification of a treaty is whether or not to proceed with it. Certainly there may be important subsidiary matters to be dealt with, notably to ensure that our domestic laws coincide with the provisions of the treaty which we ratify, but the essential point before us is whether to ratify or not to ratify. We cannot pick and choose those parts which we like and those which we do not like. Those of your Lordships who are unhappy with the treaty and the Bill will therefore, it seems to me, be obliged in the real world of international politics to present us with amendments which seek to delay the Bill until certain other requirements or assurances have been obtained. I do not expect to be able to support such amendments myself. I agree with those who believe that the time for such arguments is past. I speak in favour of the Bill without alteration and for its rapid passage. I shall vote in Divisions to that effect and I urge other noble Lords to do the same.

9.30 p.m.

Lord Beloff

My Lords, today's debate—which some people have thought perhaps unnecessary—seems to me one of considerable interest, and will be for the future historian, because we see coming together two conspiracies: first, the conspiracy of a group of political leaders in Europe to create, under the pretext of ending age-old conflict, the framework for a super state, a European Union, a United States of Europe; and, secondly, an attempt by Her Majesty's Foreign and Commonwealth Office and the leaders of our principal political parties to disguise the fact that that conspiracy is alive and well. If one needs an illustration of what I mean by the second conspiracy, the speech of the noble Lord, Lord Bridges is ample evidence.

Lord Bridges

My Lords, perhaps I may invite the noble Lord to make his meaning a little clearer. Is he suggesting that I am a conspirator? To what conspiracy am I a party?

Lord Beloff

My Lords, I am suggesting that the noble Lord is a conspirator in the conspiracy of the great and the good to force on the people of this country a treaty that they clearly do not want.

Let me take the much more important conspiracy. As has been referred to by a number of speakers, notably in a moving speech by the noble Lord, Lord Thorneycroft, at the end of the war there was a perfectly reasonable, indeed inevitable, desire to end the conflict which had scarred the European Continent. However, there were two possible ways of doing that. One was that the nations should, while retaining their independence, make friends with each other and find areas in which they could co-operate, as indeed they had been forced to co-operate economically under the Marshall Plan. The other way—that of M. Jean Monnet and his friends—was to create a superstate.

The history of Europe since that time has been a kind of dialogue between those two conceptions of Europe. It would take the remainder of the night to go into the detail. As some noble Lords know, I have written on this subject a pamphlet called A Tale of Two Europes of which noble Lords will find a copy in the Library. However, if any noble Lord wishes to study it personally and in detail I shall be glad to present him with a copy because I believe that the material which I have derived, not least from the diaries of the noble Lord, Lord Jenkins of Hillhead —I believe that he favoured us with his presence earlier today—gives one a good deal of evidence on the side of those who were endeavouring to create that superstate.

The difficulty has been all along—and the speeches that have been made in favour of the Treaty of Maastricht today show that it continues—that successive British governments have continued to persuade themselves that they could, by somehow participating in that enterprise, persuade the countries of continental Europe to go along the lines which they themselves preferred.

Much has been said, for example, about the importance of world trade, of GATT. People have even said that to ratify the Treaty of Maastricht would be a step on the road to the ratification of GATT. But anyone who has followed the activities of the Community over the past few months and years knows that the hereditary, perfectly respectable but very different protectionism of France, which has been there since the days of Louis XIV and Colbert, has always triumphed over those who believed in greater free trade. Therefore, the argument that somehow or other this is a path towards greater trade in the world, towards expanding the world economy, seems to me incapable of being upheld.

Another point which has been made concerns enlargement. That is to say that we should not limit ourselves to the current members of the European Community who talk of that as though those countries were Europe. Europe is a much larger area, as noble Lords have pointed out. There are other European countries with great and important histories and with great and important futures before them. Yet we are witnessing a clear determination, again fuelled by French protectionism, not to give these nascent democracies the minimum chance for which they ask to participate in our economic well-being. Every time they find something that they would like to sell us, the Community decides that it is too competitive to permit.

Thus, it is total hypocrisy to suggest that our membership of this body, fortified by the Treaty of Maastricht, would contribute to any extent whatever in solving the serious problems of central and eastern Europe. It is no good saying: "We will get in and make the Community less inward-looking". As noble Lords have pointed out, we have been a member of the Community now for decades and it is no more outward-looking than it was in the beginning.

Therefore, it seems to me that we are perfectly entitled to look at the treaty and to see what it involves. I have sat through nearly all the debate and it is notable that the only people who have talked about the text of the treaty have been those who were concerned to call attention to its deficiencies. There were lashings of sentiment about how we feel at one with Europe, the great enthusiasm of the younger generation. All that kind of sentiment comes from the supporters of the treaty. The nitty-gritty, the attention to detail, has come from the noble Lords, Lord Jay and Lord Parkinson, who have analysed what the treaty says.

Let me take one example which has been referred to only fleetingly: the creation, under Article 8, of a common citizenship with common duties. Citizenship is a very important aspect of a political community. Our parliamentary system and our parliamentary monarchy are based on the conception of British citizenship. It has been made quite clear—not by opponents of the treaty but by supporters of it, the people gathered under the banner of Charter 88—that one of the results which they would expect from Maastricht coming into effect, with Article 8, is that there will be no room in such a united states of Europe for anything as anomalous as the British House of Lords or the British monarchy.

There is a serious question for noble Lords to ask themselves; namely, how their Oath of Allegiance would conform with the duties to M. Delors and his colleagues which the treaty asks them to assume. This is a serious problem, and it has not been tackled in any of the expositions from the Foreign Office that have been offered from time to time. Indeed, the noble Baroness, Lady Chalker, has been repeatedly asked in this House whether she can define those duties. She has said that they are indefinable. To sign ourselves up to undefined duties would seem reckless even to the wildest of speculators.

My own feelings are quite different from those which have moved other people to suggest that the treaty should not be proceeded with. Although people say that Britain would become a kind of minor, marginal offshore island doomed to some kind of poverty—like Singapore or Hong Kong, one of those "unfortunate" islands with very little in the way of resources other than human resources—I believe that we have in this country human resources and natural resources which, if we were properly governed, could make us a country which would have weight in the world. The reason that we are not properly governed is that our Government have already lost a feeling of responsibility. They feel bound on so many issues to say: we will see what the Community thinks about it.

Let us take the example of agriculture. Does anyone seriously deny that we would give an enormous boost to the prosperity of this country and of every individual family if we contracted out of the common agricultural policy? I have yet to come across anyone in this country who thinks that it is a good idea. But we are told that it was a pre-condition of Community membership. So until recently we had the Minister for agriculture, Mr. Gummer, behaving as a type of Brussels errand boy. Backwards and forwards he went across the Channel bringing instructions as to how British farmers were to pay, how British slaughter-houses were to be closed, or whatever else it might suit the Commission to think of at that time. I had hoped that with the reshuffle—and we all have hopes of reshuffles—that there might be an improvement, because we now have a new Minister for agriculture. Is it likely that she will take us out of the common agricultural policy? Could dear Gillian be relied upon? Not if we have a Chancellor of the Exchequer who goes about intoning as his favourite psalm: "Delors is my Shepherd". Noble Lords may think that is a joke. It is not intended as a joke.

I seriously believe that if we had had a government which said, "We are going to look at the problems of this country, at why we have unemployment and at a great many things that we have been distracted from" membership of the Community could have been an advantage. It has turned out to be for Ministers a perpetual alibi. The problem arises not, as people say, because the other place has taken so long over Maastricht but because the Government put this foolish treaty at the forefront of their ambitions instead of saying, "We haven't got time now for this kind of nonsense. Let us get on and run this country as this country deserves to be run". That is something which your Lordships may well wish to consider when looking at the treaty.

I come now to the second conspiracy, which is the one on which the demand for a referendum is based; namely, that the issue has never been placed before the people of this country because the three Front Benches in the other place and now this House have not wished it. They have all said, "This is for your good." But they are overlooking something which I find even more striking than their unwillingness to take in the lessons of history; that is, that they are unwilling to notice what is being said abroad. Practically everything that has been said in favour of the Maastricht Treaty in our debate today—that there would be greater openness and subsidiarity would mean a limitation of the powers of the centre—is constantly denied.

Only the other day Herr Kohl—one would think that he had other problems on his plate; but never mind, it is also an alibi for him as he need not worry about the neo-Nazis if he can go on with the European dream—and Monsieur Mitterrand get together and say, "Of course, the British are just being foolish and difficult. What we want is what we have always wanted: a single European state." So far from waiting until 1996 in order to have another look at the matter, they will have another summit this autumn. No doubt the Prime Minister will attend that summit—I fear that he will—and he may come back and say, "Game, set and match." I should be doubtful whether that would be justified. I rather feel that the British representatives facing Herr Kohl and company are somewhat in the position of our English roses at Wimbledon up against Steffi Graf. It is game, set and match to Steffi Graf.

We are bound to say that there is a total discrepancy between what is said abroad and what we are being assured by our Government and the Opposition Front Benches, which are dominated by former commissioners so that they have little choice but to take that line. The Opposition Front Benches and our Government tell us one thing; the European leaders themselves tell us something else. Although I have some reason to be sceptical about what Herr Kohl, Monsieur Mitterrand, Monsieur Delors or Herr Bangemann may say on this issue, as regards what they want I think that they give us better evidence than we are given by those who interpret them to us.

9.47 p.m.

The Earl of Stockton

My Lords, we have heard some notable, remarkable and powerful speeches in this debate, in particular from my noble friends Lord Carrington, Lord Thorneycroft, Lord Howe, Lord Cockfield (which was full of nitty gritty), and Lord Skidelsky. It is clear that this Bill is of passionate and sustained interest to your Lordships. There was no disputing the passion in the maiden speech of my noble friend Lord Parkinson, whose mastery of your Lordships' House is only to be expected from one whose easy style on both the Back Benches and the Front Bench of another place distinguished a considerable career there. Nor is there any doubt about the wit and humour of my noble friend Lord Selsdon.

I have listened with great interest to speeches from both sides of the House that have expressed the fears of noble Lords about Britain's place in Europe, fears lest this—in the words of the greatest poet and playwright of our language—"demi-paradise … set in a silver sea" should in some way become tarnished by exposure to mainland European vapours.

But where were those words of that most English of writers, out of the mouth of that most English of princes, actually spoken? In the middle of France. Much has been said both in your Lordships' House and in another place of the loss of national identity and the dilution of the quintessential Englishness or Britishness of our culture. Was not Shakespeare himself as much a product of European culture as of his own? From Hamlet to Romeo, from Shylock to Caesar and from the merchant to the shrew, Shakespeare and his audience were as familiar with the history, mythology and culture of Europe as with that of their native heath.

Which of your Lordships can honestly say that Inigo Jones or Christopher Wren owed nothing to Italian architecture? Or that Mozart or Haydn had no influence on English composers? Or that among the great paintings of our great artists there are no echoes of Titian, Leonardo or El Greco? To look around your Lordships' House, the names, the titles, the very physiognomy of noble Lords and Ladies show the links between this country and the rest of continental Europe. Whether our ancestors were invaders, settlers or perhaps seekers after booty, there are few in this place, in another place or in the country at large that cannot claim some descent from stock outside these islands.

Therefore the cultural argument is a weak one and, above all, it is an unself-confident one. Are we really so unsure of our national identity that we are as afraid of continental contamination as, for instance, General de Gaulle was of Anglo-Saxon attitudes? I am certain that we are secure in our traditions and national identities. Notwithstanding the arguments of noble Lords whose views I respect greatly and whose knowledge of the labyrinthine interstices of the constitution is far greater than mine, I do not believe that referenda are part of that tradition.

In this parliamentary democracy there have been referenda. But I believe that in the end the plebiscite is the refuge of the demagogue. I wonder whether noble Lords who are so keen on a referendum on the treaty would be equally keen to hold one on the abolition of blood sports, the reintroduction of capital punishment or even the reform of your Lordships' House or the removal of the hereditary privilege.

I am sure that we shall debate the Bill in Committee in great, even painful detail. While I must congratulate the noble Lords, Lord Stoddart of Swindon and Lord Bruce of Donington, in finding so much to amend in so short a Bill, if we are to debate each and every one of the 400 or so amendments that I believe they are contemplating, I fear that we are in for some long days and longer nights. I wonder whether some of the opponents of the Bill have the stomach for late nights in the Chamber. While my noble friend Lady Thatcher is sans pareil in marshalling her forces, will she be with us in the still watches of the night? I have less doubt that my noble friend Lord Tebbit will be in his place, for he appears to be taking on the image as portrayed in that excellent television programme, "Spitting Image", and only appearing after dark. But I am sure that he will be pleased to know that Transylvania has yet to apply to join the Community.

My greatest concern is not the detail of the Bill or even the detail of the Maastricht Treaty in its several guises, but the narrowness of vision that the argument seems to engender. We have lost the sense of horror that underlay the thinking of the founders of Europe. Twice in a generation conflict between the European powers has spread to world war, resulting in the death through war and disease of 160 million people. In the dawning of the nuclear age the founders saw that, if ever such a conflict were to happen again, Europe, the cradle of world civilisation, would be reduced to a mass of stinking radioactive rubble. We all know of the sad history of Britain's involvement in Europe since that first bright vision was shared by victors and vanquished alike, although I am sure that, in the eyes of my noble friend Lord Beloff, the shared vision or the shared belief becomes a conspiracy.

As a businessman, I know that closer links with Europe can do nothing but good and I shall not bother to rehearse the arguments about exports and the size of the European home market, for my noble friend Lord Alexander of Weedon has done more than justice to that theme. I believe profoundly that Europe, with Britain at its heart, is always going to be a stronger, more responsible, more flexible and more accountable Europe than with us only dipping our toes into the Community pool. I believe that in the Maastricht Treaty there are safeguards that will allow Britain to put a brake on the rampant federalism of the Commission under its present leadership.

I also believe that the treaty strengthens the hand of the European Parliament, which, even at the expense of some diminution of the powers of national Parliaments, will mean that eventually power will reside where it should, in a democratically elected assembly. "Well, he would say that wouldn't he, as a prospective candidate for the European Parliament", I hear your Lordships mutter. It is precisely because I do believe in the European Parliament that I have thrown my hat into that electoral ring.

Of course I know, as do we all, that all is not right in Brussels, Strasbourg or Luxembourg. We know too that power will not be given to the European Parliament. It will have to be won. It is fashionable to have a slogan, or a mission statement. Mine is simple. "More common sense in the common market". But the vision behind that simple message can be best summed up in the words of my noble predecessor, the first Lord Stockton, who in a speech in Leeds in 1975 said: Europe is not about butter mountains or wine lakes. What Europe is about is the fact that I was nearly killed in the First World War; my son was nearly killed in the Second World War; I do not want my grandson to be killed in the Third World War". My Lords, he was right. I have not been.

9.56 p.m.

Lord Buxton of Alsa

My Lords, the advantage of speaking late in such an illustrious debate is that I can ignore all the major issues that have been so eloquently dealt with. I feel the most useful thing I can do is to deal with a detail in connection with subsidiarity. I was pleased to hear the noble Baroness, Lady Perry, say that things are beginning to work. But that is not so in my experience. Subsidiarity is not working. I have not even seen a symptom or a whiff of it in the areas with which I am concerned. Perhaps I may cite one instance and assure your Lordships, in case you think that it is just one of my environmental hobby horses, that it has very great social and financial implications.

Some time last year the Commission issued a directive that the tonnage of heavy lorries would be increased to 40 tonnes. There was no question of asking or suggesting—it will be increased to 40 tonnes! This diktat by foreign officials has never been conveyed in any way to the British public and was never properly considered or debated by Parliament. However, the consequences are momentous. Whitehall, as is its usual custom, immediately responded and the Department of Transport thereupon set out new standards for checking the strength of bridges, both in beautiful and historic cities and in the depths of the British countryside. Thus, foreign juggernauts of gigantic environmental unfriendliness are being assisted by our own government system to penetrate, pollute and spoil Britain without the nation ever being alerted, let alone having the opportunity to comment or express a view through its elected representatives. I am confident, after investigations, that this directive is of no conceivable benefit whatever to the United Kingdom or to anyone in this country. Very much the reverse is the case. It can only conceivably benefit the shareholders of the foreign haulage companies involved.

But that is only the start of the story. A professional assessment has now been carried out of all bridges by county authorities at the behest of the Department of Transport. In my county alone, for which I have the details, 140 bridges have been found unsafe for 40 tonners. Strengthening is already in hand or being planned. In that one county alone it will cost £35 million. Some counties are not as congested as others and the one I have quoted is less congested than most. But I have been as conservative as possible and have taken some professional guidance. The cost of strengthening bridges throughout the country could well be £500 million. I have still not come to the main point.

My main point is that I understand that there is no EC contribution for this work. Those EC officials who sent the directive are not even spending their own budget. EC officials are already instructing Whitehall how to spend our own taxpayers' money. I earnestly urge my noble friend on the Front Bench to investigate this question to see how far it has gone and ascertain whether it is really in the British interest and whether it can be concluded to be under the notion or concept of subsidiarity.

Therefore, this European Communities (Amendment) Bill should include a subsidiary clause rejecting absolutely bureaucratic intrusion from Europe in the domestic affairs of this country, and spelling things out in no uncertain terms. My noble friend the Lord Privy Seal referred to subsidiarity tests being carried out. I believe he said that that was being done by European officials in Brussels. In my view, that is simply not good enough. They must be carried out and considered, perhaps in consultation, by our own Ministers and Government at home. That is one instance for which I can vouch for the cost.

There are numerous others about which one wonders. The cost to our Exchequer of the only instance I have mentioned might amount to £500 million. There may be other instances which perhaps bring the total to billions of pounds. That is an aspect of the greatest possible concern. Subsidiarity at this stage seems to mean nothing whatever. It is not worth the paper it is written on because I am not sure that it is written on paper at all in any detail. Until we know what it means then it cannot be taken as anything more than a notion and even as a carrot for those who are deeply concerned about the whole thing.

There are other issues which I shall not go into at this late hour. But they all point to the same thing: the reluctance or inability on this side of the Channel to challenge what is being done by officials on the other side. Agriculture has been mentioned by the noble Lord, Lord Beloff. I have also been involved in, and raised in the House, certain questions concerning agri-chemicals. I have been unable to obtain any conclusive or convincing response from Ministers and even letters three pages long to myself as a farmer are practically incomprehensible. I am now convinced that the reason is, as has been suggested, that everybody is waiting to find out what Brussels is going to decide or what it intends to say on that particular issue.

Another instance concerns the ownership of ITV companies which we discussed in a debate that I initiated recently. The ITV companies are in danger of being taken over by foreign business. At the same time, our own people are debarred from taking over European companies. Apparently, the answer is that Brussels and the EC should harmonise the arrangements throughout the whole of Europe. Can noble Lords conceive anything more idiotic or pointless? The characteristics and nature of different countries and nationalities have already been mentioned.

Why in God's name should we harmonise who owns television in different countries? What do we care who owns television in Spain, Luxembourg or Greece? What business is it of theirs who owns it here in the United Kingdom? That is a clear case for subsidiarity and nothing whatever to do with anybody else, or how things should be harmonised. The next stage from that is instructing what schedules and programmes should be shown. No doubt after that there will he a hint that programmes critical of Brussels might be unwelcome. It is a very short step from that to the theatre, cinema and what went on in the Soviet Union over the past 70 years.

There was mention on Sunday of British services in the Falkland Islands, which is British territory. The resident services there are not allowed to eat British lamb produced by local British farmers, because the poor slaughterhouse in Stanley does not come up to the standard laid down by some bloke in Brussels who has probably never even been abroad. Perhaps I may suggest to my noble friends on the Front Bench that this really needs urgent determination because I believe that however important the constitutional and economic issues, the British public really mind about those aspects of subsidiarity—and I have only touched on the tip of the iceberg.

10.4 p.m.

Lord Prentice

My Lords, it is now 18 months since the treaty was signed in December 1991 and I cannot help feeling worried at the contrast between British momentum in the 18 months before the signing of the treaty and in the 18 months since. In the intensive negotiations leading up to our signature, John Major, Douglas Hurd and the whole of the team were involved not only at the centre of Europe, but at the centre of intense negotiations in which they were striving not only to get a treaty, but to get a treaty that was right for Britain and right for Europe, and they succeeded, giving a lead which others followed.

In the 18 months since then, Britain has given the impression of dragging her feet. There was some criticism in earlier speeches of the pace at which the Government introduced the Bill in another place. I think that there is an answer to that because the main delay to it has been in the other place. It was created by a minority of Members—by a minority of Conservative Members and by a minority of Labour Members—opposed to the treaty and using the archaic procedures of that House to create unreasonable delay. That was a great pity because in that period of 18 months other countries have ratified and we have not. What has gone on at the other end of the Corridor has caused confusion and boredom among the British public and, among European opinion, confusion combined perhaps with a suspicion that we were in some ways lacking in good faith towards the treaty.

I should like to appeal to all Members of this House (whatever view they take) that we do not continue with that nonsense. If there were an imitation in this House of the kind of tactics used in the other place, it would be bad for the reputation of this House. It would be futile in terms of opposing ratification, and it would be bad for the reputation of this country overseas.

Perhaps I may turn to one or two points about the dangers, as I see them, if by any chance we were to fail to ratify. It seems to me that there would be two main consequences. Because our decision not to ratify would mean that the whole treaty were null and void, there would then be a period—perhaps a long period —of agonized constitutional debate in the Community, with the other 11 countries seeking a way out. They would perhaps seek an arrangement for all 12 but more likely, I think, an arrangement for just the 11 with a procedure outside the Treaty of Rome. Perhaps there would even be a smaller group embarking upon schemes for a two-speed Europe. We do not know. However, there would be a turmoil of renegotiation and it would go on for a long time. It would be a terrible diversion away from the real problems facing Europe. It would take up the time and energies of the Government at a critical time when other matters should be higher on the agenda.

The second inevitable effect would be that Britain would be to some extent marginalised. There has been some argument about that during this debate, and not every one takes the same view. We would certainly have disqualified ourselves from taking any part in the new constitutional discussions. I think that the spin-off from that would be that we would no longer be listened to in the same way in all kinds of other policy discussions. Some noble Lords, including my noble friend Lady Thatcher, have argued that because we would still be part of the Community, part of the Treaty of Rome and part of the single market, we could carry on much as before. I do not think that that is realistic. I think that in the real world political influence is lost if one steps out of line and does not keep up with one's colleagues in a community of this kind. There would then be serious consequences for a range of issues—short-term, mid-term and long-term issues—which are vital to this country.

Let me suggest just three examples. One has been mentioned a good deal in the debate. It is the problem of inward investment. My noble friend Lord Alexander of Weedon had a great deal to say on that subject, which was very much to the point. We are now in receipt of some 41 per cent. of Japanese investment in the EC and some 36 per cent. of United States investment in the EC. For what reasons? There are several, but the two strongest are that we are relatively competitive compared with other EC countries, and we benefit from that. The second is that the English language is a great help so far as concerns American investment. But those reasons would not, of themselves, be sufficient were it not for the fact that we are in the Community (in the single market) and are seen to be playing a part in the development of the Community.

If we once seem to be stepping aside, or if we once seem to be relegating ourselves from playing a central role in the Community, the perception of Britain as a country in which foreign investors should invest would change entirely. Because we are in the single market, it could be argued that that is not logical. But we are not here talking entirely about logic, we are talking about perception. Most people in industry and commerce would be deeply worried at the prospect of losing that investment if we were to take the wrong step now.

My second example relates to future prospects for the GATT. I do not need to say, because it has been said so often in the House, how vital it is for Britain, Europe and, indeed, for the whole world community, to make progress towards the next round of the GATT. Last year, Britain was instrumental in achieving between the Community and the United States the agreement on farm exports. That was difficult. It took a long time. There were elements in France and in the Community that seemed to resist that agreement. Our Prime Minister, our Minister of Agriculture and others, were crucially involved in tipping the balance in favour of an agreement. Yet as we debate the subject now, last year's agreement is again in doubt. The new French Prime Minister seems to be asking for it to be rewritten. The United States Administration is ambiguous about it. If it is coming to a critical head again in the near future, as is likely, then surely British influence should be at the centre of those talks, trying to preserve what was agreed last year and to help make progress towards all the other issues that still have to be settled in that context.

My third example is the enlargement of the Community. It has always been a British objective to make progress in that direction. It was a theme of our presidency. It was one of the major achievements at the Edinburgh Summit. It was a British achievement, along with that of other like-minded countries, to reach an agreement that negotiations should start rapidly with Austria, Sweden and Finland. That was of course on the assumption that Maastricht was about to be ratified. If Maastricht were not to be ratified, if the Community were to be thrown back into what I have described as a turmoil of renegotiation, then that progress towards enlargement would be halted, possibly for years; in other words, a failure to ratify would, in a sense, be opting for a smaller inward looking Community rather than a Community growing into 17 or 20 members and becoming a European community in the fuller sense of the word.

There is one other dimension to which I wish to make a brief reference. We are discussing these matters, rightly, in terms of British interests, or the interests of the European Community of which we are a part. We should also think about the impact of Europe upon the wider world community. I welcome that part of the treaty which refers to co-operation on foreign policy. It is cautious in some ways. It has safeguards to protect national interests. It is rightly a separate pillar of the agreement, outside the sphere of the Commission.

But surely those points are self-evident. First, from the point of view of British interests, or indeed those of any other nation state, they are strengthened if you get the co-operation of your neighbours and you can work together. Secondly, 12 countries—perhaps more than 12 one day—have more impact on world affairs if they are acting together than the sum total of their separate efforts if they are not doing so. Thirdly, surely we can say—and this is not being chauvinistic in the European context—that Europe is a force for good in the world.

We are talking about 12 countries, whatever their faults or their failings. They are 12 democracies; 12 countries with a good record on civil rights compared with the average around the world; and 12 peace-loving countries with no aggressive intentions towards each other or towards other countries. In so far as their foreign policy can be co-ordinated and in so far as they can have a collective influence on the course of world affairs that is on the whole a healthy influence and will be better for mankind facing as it does so many critical situations.

I go further—and I hope that this is not chauvinistic—and say that within such a grouping the stronger the British influence the better. Perhaps I may give an example; it would be our intention to argue for the Atlantic dimension, the continuation of NATO as an important element and so forth. In other words, on that and on so many issues we would be a force for good within this European foreign policy. I believe that we should be pursuing two objectives: a stronger role for Britain in Europe and a stronger role for Europe in the world. Both of those objectives would be helped if we passed the Bill and saw the treaty ratified.

10.16 p.m.

Lord Cobbold

My Lords, several noble Lords have pointed out how national attitudes to Europe and to the Maastricht Treaty have changed as the economic recession has taken hold. It is an unfortunate but understandable fact of life that when human beings feel deprived they naturally become selfish and short-sighted. The issue at stake in this debate is only accidentally associated in time with a recession in the economic cycle.

The debate has a time horizon stretching well beyond the expected lifespan of the current recession. It is about how the people of Britain are best going to manage their affairs in the next century. It is about the world in which our grandchildren are going to live and how they will sustain and enhance their quality of life within the framework of values which we are passing on to them.

We have heard a lot about how much better off we are now on our own, free of the constraints of the ERM. The argument that we can face the future on our own is superficially attractive. It conjures up Churchillian memories of standing alone with our backs to the wall as we did 50 years ago. But then, we should remember, we were supported by a huge empire spanning half the globe.

Since that time the evidence of our ability to go it alone, particularly in managing our economy, is unlikely to be very reassuring to our grandchildren. We have lurched from boom to slump. We have borrowed to gear up our standard of living and we have shrugged off the burden of debt by inflating the currency. Perhaps I may remind your Lordships that at the collapse of the Bretton Woods agreement in 1971 a British pound purchased 9 deutschmarks. It now buys 2.5 deutschmarks, representing an average rate of decline during 22 years of 5.1 per cent. per annum. A strategy of going it alone, which is implied if we fail to ratify the treaty, is not a strategy that I want for my grandchildren.

The balance of economic power in the world is changing fast. The next century will almost certainly belong to the Chinese. The rate of growth of the Chinese economy, the strong work ethic of its people and the abundant supply of capital from expatriate Chinese present a formidable combination. Today's debate is about how best to compete with China and with the other emerging markets, in particular those on the Pacific rim. Those countries will benefit for some time to come from wage levels far below our own. The western economies are high wage economies. They have to carry huge social costs. They can compete only by massively greater productivity.

Twenty years ago we made the historic decision to forget the past and to share our future with our neighbours in continental Europe. We realised that the age of empire was past and we rejected becoming the 51st state of the American Union. We rejected the view which Mr. Kelvin MacKenzie ascribes to his Sun readers that "the British have nothing in common with the Greeks just as the Portuguese have nothing in common with the Danes". We recognise not the differences but the common strengths which the people of Europe share: the Christian ethic; a common heritage in art, literature, architecture and music; and a common belief in democracy and freedom of the spirit. Above all, we recognise the special skills and traditions of the individual peoples of Europe. Surely a constructive partnership of such enormous and varied talent in a market of 350 million people is better able to hold its own than each of us going for it on our own.

Joining a club and sticking to the rules is never easy. Nothing much in this world which is of lasting value has been created without a great deal of hard work and pain. As many noble Lords have said, Maastricht is one step in the process and it is far from perfect. European endeavour has been and will no doubt continue to be marked with successes and failures. There have been major successes. Let us not forget that it was the prosperity and growing cohesion of the Community which contributed so much to the fall of communism in the East. It is the success of the Community which explains the waiting list of countries wishing to join. Ironically, indeed, it was the success which gave rise to the sudden opportunity of reuniting Germany that has since presented the Community with its recent crisis, coming as it did alongside a world recession.

The ERM broke down last year because it contained no mechanism for upward revaluation of the anchor currency—the deutschmark. The unexpected massive cost of absorbing East Germany was just the kind of external shock which the safety valves in the system should have been able to accommodate. If you screw down the safety vales, you must expect an explosion. It was not the bankers who screwed down the safety vales; it was the finance Ministers and heads of government. The ERM was always intended as a transitional phase. In fact, it was never going to be easy to manage both sterling and the deutschmark —two of the world's major trading currencies—within the exchange rate mechanism.

That fact was recognised by the noble Lord, Lord Callaghan, in December 1978 when he declined to participate in the exchange rate mechanism from its beginning. That was a decision which, according to Hansard, was hailed from the Opposition Benches by the noble Baroness, Lady Thatcher, as "A sad day for Europe". The lady has turned quite a lot since then.

The fear at the time was the usual one; namely, that sterling would not be able to sustain its exchange rate against the mark. In the event, sterling became a petro-currency and climbed from 3.70 deutschmarks in December 1978 to over 5.00 deutschmarks in January 1981 and would have burst out of the top of the ERM, not the bottom. However, it was back to 3.70 deutschmarks two years later.

Now that we are once again outside the ERM basking in our new-found freedom, we should reflect on the fact that the rest of the world sees Britain as once again having taken the soft option. The boom-bust roller coaster has once again been let loose and the events of the 1980s and those of earlier decades look like repeating themselves.

As I have said, the Maastricht Treaty looks through and beyond the problems of today. It presupposes the United Kingdom's commitment to Europe and the existence of the single market. It proposes a step-by-step approach to the next logical stage of economic integration within the Community —economic and monetary union and a single currency. It is on that aspect of the treaty that I wish to focus a few comments.

The proposition that you can have a successful single market without a single currency is, I believe, flawed. In that I disagree with the noble Lord, Lord Alexander of Weedon. The combination of 11 independent monetary policies, 11 separate balances of payments and the free movement of capital is a recipe for exchange rate instability.

A single market with free capital movement but without a single currency can only degenerate into competitive devaluation and protectionism unless there is very strict co-ordination of monetary policy. And if there is to be very strict co-ordination of monetary policy, why not have a single currency and reap the full advantages?

A single currency permits a huge expansion of opportunity for rational long term investment decisions, maximising the economies of scale and competitive advantage. More importantly, it brings together all the domestic savings of the Community's 340 million people into a vast single capital market, which will be in London. That market is vital if we are to finance the high technology industries on which our future depends. London will benefit in other ways. Without a single currency there can be no single market in banking and financial services, an industry in which we excel. National Westminster and other British banks cannot compete with BNP in lending French francs in France or with the Deutschebank in Germany because it does not have a domestic deposit base in French francs or in deutschmarks. With a single currency our banks could compete on equal terms throughout the Community. Without a single currency pension funds will still regard investments in other Community countries as foreign investments with attendant exchange risks.

A single currency would bring other benefits to the United Kingdom. The British economy, with about 40 per cent. of GNP in foreign trade, is highly exposed to the pressures of external events. That figure drops to approximately 15 per cent. for the Community as a whole, which is closer to the figure of 12 per cent. for the United States and 10 per cent. for Japan. Marrying the deutschmark and sterling has the potential to create an international reserve currency of at least equal importance to the US dollar. That would bring benefits of seigneurage and commodity pricing that were once enjoyed within the Sterling area.

The Government have allowed the anti-Maastricht lobby to do all the talking. They have claimed that they want to be at the heart of Europe, but they have not explained to the people why. As the noble Lord, Lord Richard, stated, the Government have been grudging and defensive all along. The Maastricht debate is about competition and survival in the next century. It is not about current twists in the economic cycle, however painful they may be.

I am not personally in favour of a referendum at this very late stage in the process, but if there is to be a referendum I have no doubt that the British people, when confronted with the real arguments on both sides, will not be so foolish as to turn their backs on Europe.

The time has come for us to stop behaving, as our Australian cousins would say, like whingeing Poms. We should put the treaty to bed, roll up our sleeves, get stuck in and make it work in the best interests of our people and of the whole Community.

10.30 p.m.

Viscount Mountgarret

My Lords, for some considerable time, since the word "Maastricht" entered the day-to-day currency of the English language, I have felt a personal conviction which has led to my being diametrically opposed to anything to do with the conception.

Perhaps I am an incurable romantic. I see my country standing alone for the best part of a thousand years. It has never been invaded. We have repelled all comers. We have built up trade worldwide. We built up an empire which evolved into a Commonwealth. We were at times entirely on our own except for the great help and assistance of the New World. Accordingly, having talked to one or two friends over the past two or three weeks, I have felt that perhaps we have gone rather too far down the road towards a closer liaison with our friends in Europe. On the other hand, however much one dislikes the situation, I felt it would be foolish not to continue in the best possible way to give the embryo a chance of survival. I hope that noble Lords will not take that to mean that I think it will survive, but, if we are to go down that route, we should give it the best chance of survival.

However, this afternoon—or more correctly this evening—my noble friend Lord Beloff really put a spoke into the wheel, as he made me change my mind entirely and I found myself 100 per cent. in agreement with him, which brings me almost back to square one. I shall try not to get waylaid on that point, though.

It worries me greatly that the route that has been planned and devised for our future by not only our own leaders but also by influential people in Europe is effecting a major constitutional change in our country. My noble friend Lady Thatcher has said it is nothing short of a disgrace that the people of this country have not had the benefit of expressing their view. That is an important matter.

My noble friend Lord Stockton has said he is against a referendum because that could lead to further referendums. He asked me whether that was what I wanted and, facetiously, I replied that it was. I remember that, when the noble Lord, Lord Wilson of Rievaulx, was prime minister in 1975, a referendum took place on whether we should withdraw from the treaty we had signed on the Common Market. I remember exactly where I was sitting in this House at that time. I sat just behind where the noble Lord, Lord Stoddart, is sitting now. I said then that I was against referendums as politicians had been elected to run the country and if the electorate did not like what they were doing it could throw them out at the next election. My remarks of that time are in Hansard, although I have not looked them up.

I said in 1975 that, if we chose to hold a referendum on that subject, we would open the floodgates for referendums in the future, particularly on anything connected with the subject we are discussing but perhaps as regards other matters too. I also said that I felt the people of this country would have some difficulty in understanding the matter. I thought that was a perfectly reasonable remark. However, the noble Earl, Lord Longford, who was sitting on the government Front Bench took great exception to it.

He felt I had been arrogant to suggest that the people of this country did not understand what was good for them. I did not mean that at all. On several occasions this afternoon speakers have said that Maastricht is a complicated matter and it may not be desirable to hold a referendum as the people of the country would have considerable difficulty in understanding the subject matter. If that is so, the remedy is relatively simple. A public relations exercise should have been conducted by our leaders on the Front Bench in this House and in another place to explain what this matter is all about and to present it in the most favourable light.

One person has asked me recently whether the Maastricht Treaty is a devious Jesuit plot finally to put the Pope on the throne of Europe. That shows the extent of some people's knowledge of this subject. I believe my noble and right honourable friends in government have been lax, to say the least, as regards explaining what this matter is all about in a way that would give the Government support and would further the better performance and development of the treaty.

We are transferring a considerable amount of power from a democracy, or from several democracies, to a bureaucracy which is totally unaccountable and is unelected. Did we not lose the American colonies on the basis of the cry, "no taxation without representation"? Exactly the same might happen in this case if that bureaucracy is not elected and is not accountable and if it continues to issue edicts. The people of this country might just not accept that. That is where the whole programme could fail. That would be very sad.

Yes, I do imply federalism. I do not particularly like it, but if we ratify the treaty then federalism has to follow if it is to work. If we do not like that, then we do not ratify, but I regret to say that I cannot see the treaty working without some form of federalism.

What can we do about that? People who think as I do are accused of trying to put a spanner in the Government's wheel by requesting a referendum which would appear only to delay ratification of the treaty and therefore snarl up the whole programme and, furthermore, undermine our beleaguered Prime Minister's authority yet more. I should like to put the matter in a different perspective. If that were the case I should not be standing here now saying what I have said because I do not believe that that would be the result. My right honourable friend the Prime Minister may well have made many mistakes. We are none of us infallible; we all make mistakes. I have probably made some in what I have said. However, one tries to act with conviction. I am certain that my right honourable friend tries to act with conviction. He is the best Prime Minister we have. The late Hilaire Belloc said: Always keep a hold of nurse, For fear of finding something worse". It is perhaps a pity that that was not borne in mind in 1990, but that is another story.

I suggest that we throw a lifeline to the Government in order that the treaty can be ratified and made to work in the best possible way. The lifeline is this. The noble Lord, Lord Cobbold, said that he believed that, if there were a referendum, the majority of the people of this country would give their support to the Maastricht Treaty. I have no idea whether he is right, but, if he is and there were overwhelming support, how much more authority this country would have in Europe than if we crept in by the back door feeling that the majority of the population was against the treaty. That is what I say to my noble friends on the Front Bench. If they were to look at the matter in that way, and if it were to work, then we should speak with conviction and with the support of the people of this country. Without that support I do not believe that our standing in Europe will be as great as the Government would like it to be and as great as I should like it to be.

That is why I hope very much that, before we reach the Committee stage, the points which have been made about this particular matter will be given more serious consideration and taken on board with more ease than I fear is likely to be the case.

10.37 p.m.

Lord Hayhoe

My Lords, I suspect that after more than seven and a half hours of debate brevity would be welcome. I shall therefore try to be brief.

I applauded the considerable success of our Prime Minister in securing at Maastricht the important United Kingdom objectives which had been properly debated and agreed by Parliament before he went. I voted enthusiastically in another place to endorse the result of those negotiations and was delighted later by the Prime Minister's great skill in steering the Edinburgh summit to constructive conclusions. This Bill, which is essential for the ratification of the treaty, has my wholehearted support, as indeed does my right honourable friend the Prime Minister, who has been subject to quite unreasonable and vindictive personal abuse in recent weeks, shamefully but powerfully promoted by one or two distinguished Members of this House, I regret to say.

I believe that ratification of the treaty has already been too long delayed, and by what a curious combination of opposites. Principled and long-term opponents of European integration, joined by more recent converts to their cause and coupled with strange bedfellows from Left and Right across party lines, tried desperately by every possible means to block this Bill's passage through the other place. My noble friend Lord Beloff spoke of conspiracies in a rather imaginative fashion. The conspirators were at the other end of this building in the corridors doing their damnedest to block progress on the Bill.

The Maastricht Treaty builds upon earlier agreements enshrined in the Single European Act which I well recall being driven through the other place under a guillotine imposed by a three-line Whip. What a contrast, my Lords. There have been more than 200 hours of detailed debate on the Maastricht legislation compared with some 50 hours on the arguably more significant and important Single European Act.

And how very rum it is that some of those responsible for the curtailment of parliamentary debate on the Single European Act should now be urging a referendum on Maastricht —a U-turn of quite staggering proportions. What bad luck for my noble friend Lady Thatcher that the memoirs of her speech writer, Sir Ronald Miller, should have focused renewed attention on that notable phrase, "the lady's not for turning".

As a new boy in your Lordships' House I am full of admiration for the quality of your Lordships' debates. What splendid speeches we have had today. Perhaps I may refer to the speeches of my noble friends Lord Carrington and Lord Thorneycroft. They were of a marvellous standard and were followed by many others. I am full of admiration for the quality of debates in this Chamber. I recognise our important role as a revising Chamber. However, I find it very curious that some of your Lordships should be attempting to instruct our elected Chamber about democratic practice by seeking to overturn the clear rejection, by a substantial majority, of the referendum amendment in another place. As one might expect, my noble friend Lord Blake constructed as strong a case as possible. But he gave it all away when he accepted that the other place would maintain—

Lord Stoddart of Swindon

My Lords, will the noble Lord give way?

Lord Hayhoe

My Lords, I realise that what I say may be disagreeable to the noble Lord, but I seek to be brief and I would be sorry if the noble Lord sought to make me continue at greater length. I shall give way to him in a moment.

My noble friend Lord Blake accepted that the other place would maintain its opposition. Therefore the main purpose of seeking a referendum agreement would be—perhaps I may use the phrase—to go to sea in order to be sick because in my judgment there would be no possibility of the other place accepting such an amendment. I give way to the noble Lord.

Lord Stoddart of Swindon

My Lords, I am most obliged to the noble Lord. I realise that he has not been a Member of this Chamber long. However, he must surely appreciate that part of our revising procedure is to make amendments to Bills and to send them back to the House of Commons for further reconsideration. That applies just as much to an amendment for a referendum as to any other amendments we may make. I hope that he will revise his opinion.

Lord Hayhoe

My Lords, I hope that I have been a Member of this Chamber long enough not to need instruction from the noble Lord on a matter of this kind. I do not believe that it is a procedural matter. The referendum amendment was rejected in another place by an overwhelming majority. If it had been a narrow vote there might be some argument for saying, "Let us think again". That has occurred in the past. Howe ver, the majority was overwhelming. This House is a revising Chamber. I referred to the attempt to instruct an elected Chamber about its responsibilities to the electorate. I accept that the noble Lord, Lord Stoddart, is a principled opponent of the European ideal. I cannot believe that he would make progress by seeking to obtain through the referendum amendment that which ordinary parliamentary debate failed to obtain.

Of course, the long tedious arguments and discussions about this Bill in another place have not been a dead loss; far from it. What one might describe as the anti-centrist case has been well made and emphasised. For example, positive points about subsidiarity and about much needed closer co-operation on foreign and security issues have been made with great force and conviction by Ministers —notably by my right honourable friend the Foreign Secretary and his then Minister of State, who carried so much of the burden in the parliamentary debates in another place. The case for enlargement, for accepting EFTA countries into full Community membership and for building upon the association agreements with Poland, the Czech Republic, Slovakia and Hungary is overwhelming.

Despite all the long drawn out arguments about the ERM and a single currency, I remain absolutely convinced that future economic co-operation within the Community will be much more determined by events, by industrial and commercial pressures, than by political declarations.

Failure to ratify this treaty would grievously damage our national interests, both economic and political. British influence overseas would undoubtedly be curtailed, economic confidence would tumble, present hard-won achievements and opportunities within the Community would be cast aside. It is altogether a growing dismal prospect which certainly does not please.

Let me end by affirming my deep commitment and long-time support for European unity. I am not a federalist and I have consistently opposed the federal concept since I first became involved with the European Movement and the European Youth Campaign in the early 1950s. As a pragmatic realist —one of my noble friend Lord Carrington's, I hope —I am totally convinced that Britain has much to contribute to and much to gain from the increasing unity of our continent. But to achieve that we must be at the heart of Europe, and that is why the Bill has my full support.

10.47 p.m.

Lord Palmer

My Lords, my father was for some time on the British National Export Council and I think that I inherited his enthusiasm for European trade while still a schoolboy. So enthused was I that I went to live and work in Belgium, where, sadly, my enthusiasm was greatly dampened. I used to pass the motorway sign for Maastricht on a regular basis, little realising that the name Maastricht would dominate the early part of the last decade of this century. I am sure that I am not alone among your Lordships when I declare that I have never been to Maastricht and also not alone in saying that I find the treaty difficult to understand. In fact, if we are all totally honest, how many of us have met anyone, inside or outside the Palace of Westminster, who fully understands the treaty?

Having changed career from being a secondary producer to a primary producer, my enthusiasm was sadly still further dampened. In 1986 I was "conned" —and I use that word with feeling—into representing Scotland on the European Landowning Organisation. I was told that there would be only two meetings a year and that I would be inundated with invitations to châteaux in France, Schlosser in Germany and weekends on the Riviera. In my naivety I accepted and in my first year there were no less than 17 meetings and, needless to say, not one single social invitation.

I did, however, have the chance, often in the same day, to sit next to Mr. Andriessen and later on meet attractive dolly birds fresh out of university who doodled around with pencils and then came up with wondrous ideas, or at least so they thought, like prohibiting the shooting of pigeons and having a closed season for culling crows.

Another example of idiotic Brussels bureaucracy is the slaughter-house directive which was mentioned by the noble Lord, Lord Buxton. In 1992, 200 of our 780 slaughter-houses closed, and it is predicted that by the end of the century we shall have only 100 left in this country. No other member state has had a 25 per cent. annual closure rate and we must ask why. I am fairly certain that it is because other countries simply are not obeying the rules.

This is one of the main points that I wish to make. While I believe we must be in Europe, we must be there at the very heart, as other noble Lords have said, to prohibit—and I mean prohibit—such idiotic directives becoming law. I remember well a cartoon in a national magazine referring to the game meat directive. It depicted a white-coated vet standing beside a busy grouse butt trying hard to resuscitate a pile of birds and despatching them hobbling off on mini-crutches into the unknown.

Being a market of 340 million people we must ensure that the Brussels' bureaucracy is of the highest level of competence and that they are not just there for "les pommes frites avec la mayonnaise" or waiting for dinner at the world-famous restaurant Villa Lorraine, while waiting to retire at 50 with annual pensions surpassing what some people within the Community might earn in their entire working life.

I must now turn to the dreaded CAP, to which many of your Lordships have referred. I have often said in this House that future generations will find it hard to believe that European Community governments allowed such a situation to arise, let alone for it to continue for so long. We cannot allow corrupt practices to go on stealing £6 billion annually from the CAP budget.

In the late 1970s we were told more food was required—drain the wetlands and pull out the fences. With the financial incentives on offer, farmers, especially those in the LFAs, would have been mad not to comply. But, and it is a large but, many farmers —and I hasten to add that I must include myself—borrowed to meet the shortfall. All of a sudden we are told: stop, set it all aside and here is an IACS form and a large cheque will follow. To give an incentive to grow more, and a few years on an incentive to grow less, must be financial madness, especially with 759 million people starving in the world today.

We in this country are on the whole good at obeying the rules. But look at Spain, where only 65 per cent. of the IACS forms have been returned on time. There are not even figures available for Greece, Portugal and Ireland.

We must not also lose sight of the fact that even within the United Kingdom we do not have the same laws, regulations and culture. Scotland, for example, has a very different set of laws from England and Wales, although it has been in the Union for very nearly 300 years. As such I have always found it difficult to understand how, if the United Kingdom has different laws affecting different countries within its Union, we can honestly expect bureaucrats in Brussels to dream up directives that must apply to the Greek isles and equally to the Outer Hebrides. It cannot work, and that is why it is so vital that we are in there to ensure that what is decided is representative for the member countries concerned.

It is not, and I believe it must not be, the function of Brussels to trample over the national traditions and to try to modify sensible working practices within member states. It is totally unnatural and illogical to suggest otherwise.

I believe in a common market if it really is common. As long as there is such a beast, I believe that we must be at its very heart. To disband it altogether has its merits, but that is not what we are discussing tonight. Membership of the European Community is about peace, stability, jobs and prosperity. If we are to believe that, as I believe we should, it would be political, economic and social suicide not to ratify this treaty.

10.55 p.m.

Lord Wolfson

My Lords, after more than 200 hours of exhaustive discussion in another place, the powerful contributions in today's debate, with a detailed examination to follow, and the comprehensive media coverage of the Maastricht Treaty, your Lordships will rightly expect me to be reasonably brief at this late hour. I shall cut out the jokes.

An experienced negotiator knows that there is no perfect deal because negotiation by definition is a two-way affair: one of give and take. Within that context and the inevitable financial constraints on EC or any other public spending proposals, the Government have secured a fair and reasonable arrangement for the country and I am sure that they will continue to keep in mind business concerns regarding added overhead costs in a highly competitive world market.

It may be that a further referendum following the one approving our accession to the EC in 1975 might have been considered originally, although I do not recall such a suggestion being raised in the case of the single market treaty, which in effect ended individual state veto. I shall listen to or read the arguments with care but we should bear in mind the very substantial vote of rejection on this matter in the other place, which had the support of all three major parties. There is also the fact that our European partners have already ratified the treaty, with the Government securing broad recognition of the principle of subsidiarity.

It is clear that public opinion in this country does not want European federalism. So significant opt-outs have been negotiated to allay many of the understandable concerns expressed about the constitutional implications of the treaty. Maastricht represents a further stage in bringing the countries of Europe closer together, which in principle I support. But before any possible benefit can be derived, there is still the need to ensure that the Treaty of Rome and the single market treaty are working as intended.

We all want free trade on a reciprocal basis but while this country plays to the rules there are still restrictive trade practices in Europe, notably in the CAP but also in smaller matters. To take one example, as a tourist, why is it almost impossible to buy British mineral water on the continent whereas in this country a wide range of similar products is freely available? I do not believe that that is due to bad salesmanship on the part of the trade. We all know of the urgent need to eliminate the elements of waste, inefficiency and over-centralisation that exist in the EC and give it a bad name. That is not good enough for our country, which contributes a net £25 billion a year to the EC budget. We need far more accountability.

I know that my noble friend Lady Thatcher achieved a considerable reduction in our contribution, but I am not clear as to the basis on which the UK —a deficit country in EC trade—makes any payment at all. Of course the EC has many problems, which have been exacerbated by world recession, but in time they are soluble and more likely to be solved if we all work together.

It is true that we lack a common language—a regrettable drawback, but there is always English—and at present a uniform approach to defence and foreign policy. But within the framework of NATO and the WEU—two supranational organisations as noted by the noble Baroness, Lady Williams of Crosby—the Government have agreed with their partners on a gradual approach to those issues. Realistically that will require time to resolve, a point which was made in the admirable speeches of my noble friends Lord Carrington and Lord Cockfield. Most importantly, we have retained the right to deal with such legal issues as cross-border crime and security.

We have learnt from the tragic experience of Yugoslavia and the break-up of the USSR and Czechoslovakia that political union, if it is to survive, must evolve and cannot be imposed. But above all, we should recall that the sacrifice made in world wars by two generations for the cause of freedom and justice has finally resulted in the establishment of an externally peaceful and more prosperous Western Europe—surely a fitting memorial to the millions who gave life or limb for that ultimate purpose.

As a leading partner we must retain the vision of bringing harmony to a Community that has already been created. We have yet to develop the democratic agencies needed to control the bureaucracy of Brussels and beyond. We also need to extend further the benefits of free trade in goods and services by successfully concluding the interminable Uruguay Round of the GATT negotiations. My noble friend Lord Thorneycroft spoke so well on that and other matters, as did my noble friend Lord Parkinson in his excellent maiden speech.

Eventually a common currency eliminating transaction costs and an overall economic approach to such key issues as employment, competitiveness, investment and training may emerge—I hope that they will. But all that depends upon greater convergence as the ERM experience has shown. To carry public opinion, never was the truism, "Patience is a virtue", more relevant. We want to see, in the fullness of time, a Europe of free and independent states working together in the pursuit of peace and prosperity, extending a warm welcome to its EFTA partners and eastern European neighbours so recently liberated from the darkness of tyranny. We must also take into account the urgent needs of the less prosperous parts of the world and continue to remain a staunch friend of our great ally, the United States of America.

We will not achieve our objectives by being outside the EC mainstream, for British diplomatic skills can only be effective if we are right at the centre of policy making—a point referred to by my noble friend Lord Howe in his penetrating address. To quote the Prime Minister, Britain requires the appropriate authority in Europe to shape the future of the EC, and not be shaped by the future of the EC". Whatever the frustrations, we should maintain and develop our historic links with Europe, whose freedom has been our concern for hundreds of years.

As we approach the 21st century we should combine our love and respect for the time-honoured traditions and institutions that form our heritage with a leading role in the progress of a democratic and outward-looking Europe. Our partners retain their independence; they feel no loss of sovereignty and neither should we. Of course there are some weaknesses and lack of flexibility in the present structure of the EC. But with good will all round, that can be corrected. The really important factor is that there is within sight the ultimate goal of a prosperous Europe, at peace with itself and with its neighbours.

11.3 p.m.

Lord Gray

My Lords, my noble friend Lord Denham, in a verse he wrote, once described me as a "cross-Tory Peer". Notwithstanding that, it is never pleasant to speak against one's party line, which I feel I have to this evening. However, I do not believe that I will deserve to be hated for all time, and to anyone who sings the refrain, "Sit down, sit down, you're rocking the boat", I must reply that perhaps someone should have ensured that not too many members of the crew were left behind before we left port.

Twenty-one years ago I spoke and voted in this House against our accession to the Treaty of Rome; not against the concept of the common market, but out of fears for the future. Those fears are now realised. I was tempted, perhaps like my noble friend Lord Selsdon, simply to read out a speech I made then. But of course I shall not, although the Third Reading speech I made on this very spot on 20th September 1972 is as applicable to this evening's debate as I thought it was to that occasion.

My concern was that we were committing ourselves to sign up for treaties then unwritten. This treaty of Union is just such a one. Listening to my noble friend the Leader of the House this afternoon, I wondered whether he had missed the news report that only yesterday Chancellor Kohl was urging haste towards a federal Europe. That is the future others plan for us. Brussels bureaucrats and politicians have a clear blueprint for the days when the central institutions of the Community will play puppet masters to national parliaments, as evinced by the quotation from M. Delors that my noble friend Lady Thatcher regaled us with this afternoon.

At negotiation time much was made of deletion of the word "federal". But the reality of intent remained. The concept of the authors is intact. In today's debate the pudding of earlier treaties has been stirred and stirred and, according to the speakers' views, plums have been pulled out in attempts to prove that our course was already irrevocably set for Union before this treaty came along. I do not agree. Declarations of intent and preambles are not law. No, my Lords, for me this treaty is quite clearly a bridge too far. It spans the gap twixt close association and Union.

Surely the twin pillars of our democracy are the power of another place alone to raise taxes and the balance we strive to maintain between legislature and executive. Europe-wide control of fiscal policy, with a central bank and a single currency, must impinge on our exclusive right to self-taxation. There goes the first pillar. Unelected officials in Brussels and a European Parliament in which we are a minority voice among many whose politics may from time to time be distasteful will surely destroy the second. I am not cheered by the doctrine of subsidiarity which I fear will certainly be circumscribed by central edict.

A single common market is a very sensible idea. Trade without restriction should be a universal idea. My noble friend Lord Parkinson, in his excellent maiden speech, expanded on and enlarged that point. Have we in the EC achieved our common market? I think not. And if we have not, and if it has not delivered, why not? It is impossible to judge or even to pretend to be able to judge what might have ensued had we pursued an alternative. Global recession bedevils any analysis. But apart from the ERM fiasco, what has been the experience?

My noble friend Lord Tonypandy told us this afternoon that we have paid in £95 billion since we joined. In 1972 average unemployment in this country stood at 844,000 and we had a £203 million balance of trade surplus. In the 1980s there was expansion and today there is slump. We might ask why the market has not cushioned us against the worst peaks and troughs. I suggest that that may be because we have failed to achieve our initial aims to get the market properly and equably organised on a level playing field. Time and time again we have said that we must get the common agricultural policy sorted out. We announce initiatives and claim successes and yet it still lingers on to the point where it has nearly ruined the GATT round talks.

Only last week a French spokesman said that his farmers wanted another 50 per cent. added to the set aside price per tonne and that it would be better to give in than to have them riot in the streets. What an attitude! There are still other cases of delay and failure to achieve convergence of law and practice. There is corruption to tackle, the failure to implement directives and to enforce regulations, which have already been referred to. For goodness sake, surely getting the market sorted out and running smoothly should have been a prerequisite even for those who advocate political and social union.

To my noble friend Lord Elton I say that you do not have to marry a business partner, but if so inclined, make sure of the partnership first. Perhaps in seeking a surer way of avoiding the terrible possibilities on which he dwelt, one might look to the ongoing interdependence of the armed forces of Europe which has been a feature of our lives since 1945 and in which we are actively involved now.

I now turn to the referendum question. We have had a Scottish and a Welsh devolution referendum and a reverse one on the Common Market. Surely the precedent is set for matters of constitutional change. I disagree that there was a mandate in a meaningful sense. My noble friend Lady Thatcher pointed out that consensus meant that no one had the chance to vote for it. I am sure she will accept that there was a "No" vote represented by the die-hard marketeers returned to another place.

I do not find that the electorate knows a great deal about this treaty other than the name Maastricht. I have consistently refused to use that word so far in this speech and have stuck to its title, a "Treaty on European Union", a title which should be aired widely. The media, which now largely makes election-time running, chose to push more immediate and personal issues. I suggest that no one has put all the cards on the table face up. The electorate deserves better. It will be almost arrogant to deny them.

I was pleased that my countryman, the noble Lord, Lord Howie of Troon, agreed, but I got a little worried when he seemed to be suggesting that we might have one on the Schleswig-Holstein question. We are not the only country where there are strong and popular reservations about this treaty. Rather than fearing what the rest would do without us, we should reflect perhaps that they need us. Might we not hope that, should the United Kingdom turn the treaty down now, it might lead, as I think that my noble friend Lord Prentice was suggesting, to some rethinking and perhaps to a compromise that we all can endorse?

Finally, I return to my main theme. This treaty is for me a bridge too far. When in the 1970s I argued on sovereignty, I was told not to be sentimental. I was told that we were only pooling or sharing our sovereignty. It was not sentiment; it was reason. One can use sovereignty in an alliance to pursue a common goal or exert its authority to collaborate or to support a cause. We should do so. But the concept of pooling or sharing sovereignty is ridiculous. James Graham, the first Marquis of Montrose, writing to his King said of such a concept: In speech it is incongruous and to attempt it in act is pernicious". Sovereignty surely must stand alone or it is not sovereignty. Ours is embodied in the strong parliamentary democracy that we have cherished these hundreds of years. I challenge the right of Parliament to surrender it. The 20th century may certainly place constraints upon us, but in the final analysis it still rests with the people of the United Kingdom and their Parliament to act as they and they alone see fit. The freedom to do so stands at the pinnacle of our traditions. We must keep it there for our children's and our children's children's sakes. With this treaty which we are asked to ratify, that freedom would be gone beyond recall and they will rue the day. I pray that we may yet see reason prevail.

11.17 p.m.

Lord Brooks of Tremorfa

My Lords, anyone who lived through the 1930s and the Second World War can understand the case for a United States of Europe. The case can be made convincingly and it is certainly an honourable cause as I, for one, always recognised. I have never been impressed by some of the arguments against. Some object because of a loss of sovereignty. The view that nation states are any longer sovereign in the old-fashioned meaning of that word is, of course, a nonsense.

There are those who object to becoming citizens of Europe. I am both Welsh and British and to add one more identity causes me no problem at all. Indeed, as one who was born in a multi-cultural city, where I live and where more than a dozen languages are spoken every day, perhaps we offer an example to many others.

It is said of the Welsh that we will never cast our bread upon the waters unless the tide is coming in -and it is that invaluable tradition that has led me to question not the motives of those who have been pursuing the European ideal, but the methods. Ever since the Treaty of Rome, we have been engaged in a policy of European federalism by stealth, even by subterfuge. On signing the Treaty of Rome, we were given the impression that we had joined a common market, a kind of super free trade area. There was no mention made then of monetary union or of a single currency managed by an independent bank, although Sir Edward Heath now tells us that a single currency and a single economic policy were implicit all along. I wish that he had told us that at the time.

We had a referendum following a renegotiation of the terms of the Treaty of Rome. In the Government's document urging us to vote "Yes", it was stated: There was a threat to employment in Britain from the movement in the Common Market towards an Economic and Monetary Union. This could have forced us to accept fixed exchange rates for the pound, restricting industrial growth and so putting jobs at risk. This threat has been removed". I wonder how many were persuaded to vote "Yes" in the referendum because of such assurances.

In 1978 we had direct elections to the European Parliament. Do we really believe that men and women elected by popular franchise are content for ever to sit in Europe merely twiddling their thumbs? They are restless now, and they have been restless for some time. It is understandable that they should be. We have had the Single European Act. We have been in and out of the exchange rate mechanism. We now have Maastricht which is clearly a major step towards a federal Europe.

All those steps do not add up to fighting a noble cause. It is more like playing the wheel of fortune: give the wheel enough spins and one day the jackpot may appear. The Maastricht Treaty is the jackpot that the European idealists have been seeking ever since we joined the Treaty of Rome. Men and women have wrecked they political careers in the cause of European union. Some have (as they put it) tried to break the mould of British politics. They have been (and some still are) ready to sacrifice their own parties in support of or in opposition to European union. I believe that the British people are sick and tired of it. They feel helpless as they watch our institutions and our economy in almost complete disarray.

We are leaderless and rudderless. As one of our national newspapers put it last weekend: Europe is not one issue among many here. It is the mother and father of a fatal malady". There is only one way in which that dreadful situation can be resolved and that is by taking the question of European union—which is what the Maastricht Treaty is about—to the British people. They were not given the opportunity at the last general election. The three major parties were silent on the subject of the Maastricht Treaty. I believe that it was only when the Danes blew the gaff in their first referendum that the British public began to realise the importance of the Maastricht Treaty. I repeat that the people of Britain should be given the opportunity to express a view and that can be done only through a referendum.

11.23 p.m.

Lord Elibank

My Lords, in view of the quality and breadth of the speeches that have been made tonight, all that remains for me to do is to nail my colours firmly to the Maastricht mast, and briefly to give my reasons for so doing. I find one of the most compelling reasons that of inevitability. Let me explain what I mean by that.

When I was a young man in the late 1940s and early 1950s, I visited, as I imagine many of your Lordships did, the continent of Europe—France, Italy and Spain. When I crossed into those countries I was aware of a profound difference of culture, way of doing things, and, above all, of language. I was then, as sadly I still remain, a very poor linguist. At the level at which I was travelling none of the locals was prepared to talk to me in English, even if they knew a few words of the language.

That has profoundly changed during the past four decades. When I now cross to Calais it is not quite the same as motoring to Edinburgh or to Cardiff but the difference is far from profound. To go to France, to journey from Calais to Paris, to call at the occasional cafe and to fill up with petrol is almost the same as continuing one's journey in England.

That change has taken place irresistibly since the Second World War. Of course, I must make allowances for the fact that I am older and a more experienced traveller and that world-wide communications have increased incredibly in quality and speed. However, having made those allowances I still believe that the unification of Europe has been going on steadily for the past four decades.

When I look at it in that light I see the various treaties that we have signed and to which we have committed ourselves, starting with the Coal and Steel Treaty to the last in the sequence, which is Maastricht. I see them simply as steps along the road—as milestones, if you will. Some of those treaties were better for Britain, some were ahead of the wishes of the voters of a particular country and some were administratively badly set out. They all have faults but, in my view, the march forward is irresistible. Maastricht, of course, is far from being the last treaty to which we shall be asked to subscribe.

It is possible to seek to erect barricades against this process. If one does that they will not be stormed by revolutionaries; they will simply be swept over in the course of time by the tide of history. We are now on a road from which there is no turning back. We can go forward in the van or we can go forward in the rear —but go forward we surely will.

I have little sympathy with those—and there have been some in the debate—who clearly thought that when we embarked down this road we were going to join a single market and no more; that we were joining some form of commercial union and at that point we should stop. My noble friend Lord Cockfield quoted from the various treaties which set out clearly the intention to proceed towards some form of political union. One need only have listened to the various leaders of Europe to know that that has been their intention from at least 1950. There has been no deception of the British electorate or the British Parliament. That has been the road down which they have headed, and if we did not realise that we were blind.

It is difficult to think of Maastricht and the treaty without making at least some reference to monetary union. I do so with a certain nervousness because I am no economist. When I look at the commercial and financial status of our country and what has happened to it during the past 40 years I cannot view this history with any great pride. In about 1950 we were the third or fourth most powerful and rich country in the world. It would be fair to say that now we are nearing the bottom of the first division.

It seems to me that the problem has been that our productivity or competitiveness—which I take to be almost the same—have rarely matched those of our rivals, except at short intervals. A number of those occurred in the 1980s. When faced with an inevitable financial crisis of one kind or another, our remedy has been to devalue. That always provides short-term relief, but in the longer term it merely accelerates our slide down the competitive slope or brings down our level compared with our competitors in the western world.

That is not to say that the standards of living in this country have not improved appreciably since 1950, because they have, but they have not risen to the same level as that of our competitors. That tendency to be uncompetitive most of the time and to solve that problem by devaluation has been one of the roots of that decline.

It struck me at the time at which we joined the monetary system and fixed our exchange rate to the deutschmark that that was a gallant effort to provide the kind of national discipline which would ensure that we become competitive with the rest of the western world. We know now, some of us with the wisdom of hindsight, that we entered at the wrong level. That was a fatal flaw and, indeed, we have had to leave the ERM. Our currency has again been devalued not by the Government this time but by the markets. I hope that it will be possible to try again to re-enter the monetary system at a more competitive rate. I believe that that, with several caveats, is the policy of Her Majesty's Government today.

As regards a referendum I am, as are many of your Lordships, opposed to referenda in general for reasons which have been well aired both in this House and outside it. But if those proponents of a referendum could set out clearly the kind of parameters which they have in mind for holding referenda in the future, I should at least listen sympathetically. It is not enough to say that the matter is of great importance to the nation or that it is a profound constitutional issue. As was said by my noble friend the Leader of the House, to the man in the street an issue like Maastricht is secondary to, for example, the state of the National Health Service, the education system or anything affecting his motor car. He would not put Maastricht at the head of a list of issues on which he would wish to vote were he offered a choice. Therefore, parameters must be set.

I object profoundly to putting the power to call a referendum into the hands of the Prime Minister or the government of the day, more or less at their whim, when they believe that there may be some political advantage to be obtained from it. I believe that that is a quite unacceptable extension of parliamentary democracy.

For those reasons I support totally the Maastricht Treaty and I wish the Bill before your Lordships which incorporates it a fair wind during its later stages.

11.34 p.m.

Lord Ashburton

My Lords, I could not bring myself to miss this opportunity of speaking on such an important matter which is rarely debated in Parliament despite the fact that I am the 45th speaker and so many excellent speeches have been made already. It is now dark outside and I can and shall be brief.

I have no interest to declare in the narrow sense, but I should touch on the background of experience against which I speak because, although I am fortunate to have much wider interests than these, 39 years as an active merchant banker and my current involvement in the oil business have surely influenced my thinking. Both businesses, though hugely different in scale, are global in scope, while at the same time heavily interested both in Britain domestically and Britain in Europe.

The Maastricht Treaty happens to be the focus of our discussion today, but it is only part of a continuum in terms of the United Kingdom's relationship with the European Community. These, heaven knows, are troubled times, when all over the world some of the apparent stability and the advances of the past few decades are crumbling and perhaps lost.

As I contemplate the changes which membership of the EC brings, I am apprehensive. Changes with European neighbours, changes in sovereignty and problems deriving from the assimilation of widely differing economies are but a few examples. Those changes are daunting and if I do not tremble like some, I certainly worry, and most people that I know are like me.

However, any apprehension that I may feel about the detailed implications of our membership of the European Community and of the Treaty of Maastricht in particular is nothing compared to my worry about not being truly within the Community process. That is completely unthinkable. All too many of those whom I have heard using the occasion of the debate on the Maastricht Treaty to distance us from our continent sound, as far as I am concerned, like the voices of those who cannot tell the wood from the trees.

Imperfect as is the treaty, I am strongly in favour of ratification because only thus can we at this moment ensure that our Europe develops to our advantage, in the same way as our other European partners.

I should like briefly to sketch in the reason why I stand where I do. I hope that noble Lords will not find some of my remarks over-cynical. Development of the EC broadly consisted of two stages. The first was top down. The top down stage was the selling of a political dream: the political stability of Europe, in particular the elimination of war within Europe. It was to be brought about by a benign economic process, free trade within Europe. That stage was, by and large, an amazing success story.

The second stage is bottom up. The most remarkable manifestation of that stage has been the completion of the single market through the Single European Act. For the first time that was the result of real pressure from those who found Europe still economically divided and who wanted a stalled Community pushed forward. They were the "commercants", the manufacturers, the retailers. Bottom up, even if not as yet the individual voters.

The EC is now definitely and irrevocably at a stage where bottom up is by far the most important and often the only conceivable way forward.

When I look at the more far-reaching commitments that are explicitly included in the Maastricht Treaty, notably common currency and political integration, I do not believe that there is much prospect of those coming to pass unless and until there is real bottom-up demand. That could take rather longer than the convergence of economies, which I judge to be a good deal further off than some of the more extreme Europhile talk would lead us to believe.

We are not alone in our worries in Britain. If one needs to adduce further evidence against the likelihood of precipitate progress one has only to look at the question of the accession to the Community of new members. Broadening will not be easy, but I believe that it is much more imminent than deepening and indeed in the event it might defer deepening even longer than would eventually be desirable. But I am perfectly happy to wait to cross these dangerous bridges when we come to them.

As to a referendum, it is always a seductive idea. Who can be against such an apparently democratic process? For my money Maastricht in reality is not of itself a radical enough departure from what is effectively a continuum of Britain's accession to the European Community to justify a referendum. In any case referendums—this point has been already made —are far too easily diverted and can become a verdict on other current disquiets and uneases in the political entity in which they are being taken rather than on the issue itself. I would certainly find it impossible —I have not so far heard anyone try to do this—to frame a question or even questions which would be adequate to the situation and apt for putting to the electorate to enable them to consider the Maastricht Treaty.

I can recapitulate simply. I am in favour of the Maastricht Treaty in the improved form which was negotiated despite all its imperfections which have been pointed out. Some of the wilder attempts to discredit it are a mixture of views from Cloud-cuckooland, where we do not live and which is not a candidate for membership of the Community. They also betray an inability to see the wood for the trees, by which I mean the real issues as opposed to the apparent issues, and a general wish to reverse the whole move of the UK to full participation in the Community. That, as we know, was decided two decades ago and should stand. We have to be within and there is a huge amount to do from within before the issues which are producing so much heat are upon us. Let us now for Heaven's sake get on with it.

11.42 p.m.

Lord Beaumont of Whitley

My Lords, I think everyone in this Chamber agrees that this treaty is a flawed treaty. It contains many things that almost everyone would disagree with. Paddy Ashdown, the leader of the Liberal Democrat Party, said last week at our spring conference in Nottingham that it was a treaty made by politicians for politicians. It is, of course, right that it should be made by politicians. That is what we as politicians are here for. However, it is wrong that it should be made by politicians for politicians and not by politicians for citizens, which is the alternative. It is important that we are in Europe so that we can make certain that the Community becomes a really democratic organisation and far more so than it has been to date. It is a treaty which is flawed and which is made worse by our own withdrawal from the social chapter.

In the early 1960s, when I owned the magazine Time and Tide, we sponsored a conference entitled "After Britain Enters". I believe the noble Lord, Lord Bonham-Carter, and probably one or two other noble Lords attended that conference. We were a little before our time and on that occasion we did not manage to enter Europe (although of course we did eventually). From that time I have always been in favour of being part of a European entity. Therefore I shall vote for this Bill as, however flawed the treaty is, it is the only step forward offered to us towards a federal Europe, which I myself want to see, and a step away from the idea that there either is or should be such a thing as national sovereignty in the modern world.

The noble Lord, Lord Beloff, will note that there is no conspiracy in anything which I put forward. It is not secret and is all declared, although the noble Lord may object to it.

Lord Beloff

My Lords, perhaps I may tell the noble Lord that I would not dream of accusing him of conspiracy. It is delightful to find, at least on that side of the House, someone who is prepared to tell the truth.

Lord Beaumont of Whitley

My Lords, I am very grateful for that remark. I shall continue to tell the truth and say that I am in favour of this treaty because I believe that it is a vote against GATT and free trade, certainly in agricultural products, and for a system of protectionist blocs in agriculture which will be necessary in a world which will be governed by ecological economics. I believe that not only will it benefit ourselves, as I think the noble Lord, Lord Palmer, would agree, but it will serve the third world.

Thus far I have said what I intended to say when I put my name down to speak. I now turn to the subject of a referendum, but I have- to confess that I am one of those rare people who have had their minds changed by the admirable debate in your Lordships' House. The uses of your Lordships' House are debatable, but I do not believe that it is not our duty, if necessary, to call for a referendum. There is a firm case in favour of one of the uses of your Lordships' House being the protection of the citizens of this country from a unicameral parliament. We may be unelected, but at least that is out in the open, unlike another place which is elected in such a way that it can claim that it is representative without being so.

It is a major principle of the party to which I belong that we should consult the people on any major constitutional issue. If this is not a major constitutional issue, why are we spending two days discussing it? However, during the course of the evening I have been persuaded by the speeches of those who are in favour of a referendum, rather than by those who are against, that it is now too late for a referendum. In particular I found the arguments of the noble Lord, Lord Gilmour, who announced that he was in favour of a referendum in principle, very convincing. It is too late to have a referendum now.

Let us go ahead and pass this Bill through this House as soon as we can. Perhaps I may say in passing that we should do so without the ridiculous procedure —for this House—of all-night sittings. If I may be allowed just one aside, I remember that in another place my colleague John Pardoe and others at one time decided to go home at 11 p.m. on the grounds that decisions made after that hour were bound to be bad decisions. I believe that that is true and that your Lordships' House will not cover itself in glory if it goes in for such a procedure.

Let us get on with the ratification of the treaty. Let us put back the social chapter if we can. Let us try to achieve a government in this country which believe in Europe instead of pussyfooting into it backwards. In any case, let us play our full part in a Europe, which is in some ways the inheritance of that Christendom from which we all inherit our values.

11.49 p.m.

Lord Harding of Petherton

My Lords, at this late hour I shall not detain your Lordships long. I support the Bill which, when it is passed, will ratify the Maastricht Treaty. I am afraid that I do not support it for the reasons given by the noble Lord, Lord Beaumont of Whitley. I support it because, in spite of all the alien language used in the treaty, this country must not throw away all the gains that have been made in the past 20 years as a result of being a member of the European Community. We should be absolutely clear that that is exactly what would happen if it were not ratified.

If the House votes for a referendum, it would have the same effect. Had the Government proposed a referendum when the Maastricht Treaty was first being discussed with our European partners, it would have had my support even though there would have been difficulty with the wording of the question to be asked of the people. To have one now would be the utmost folly. The British Government would lose all respect from the European political leaders. This country would lose any influence within the European Community for years, if not for ever.

Know that prominent European leaders wish to integrate the Community. They devised the Maastricht Treaty as a vehicle for doing that. I share the horror of the noble Lord, Lord Joseph, of the words "ever closer union" which he stated in a letter to The Times today. But—and this is the reality —if we do not ratify the treaty we shall be on our own.

Those noble Lords who have said that we can reject the treaty and still remain members of the Community are not living in the real world. Of course legally they are right. The treaty has to be ratified by all 12 member states to come into effect. However, have they thought of the effects of our rejection of the treaty at this late stage? We would have all the other member states ranged against us as they have all ratified the treaty. That would include Denmark, for whom the British Government, under the skilled leadership of the Prime Minister and Foreign Secretary, secured the opt-outs which last month enabled the Danish people to vote for the treaty in their second referendum.

The millions of pounds of investment from the United States and Japan which have been providing a steadily increasing amount of employment in Britain in the last few years would immediately be put at risk. That investment has come to Britain because of its membership of the European Community. If we had not signed up for the single market it would not have come to this country.

Have those noble Lords who wish to reject the treaty considered what would happen politically if they had their way? An emergency European Council would be called. Britain would well and truly be in the dock. Some arrangement whereby Britain remained outside the main framework of the EC, as amended by the Maastricht Treaty, would have to be agreed.

I cannot see the other 11 countries agreeing to drop the Maastricht provisions because Britain rejected them. They would immediately instigate another agreement but without Britain. Britain would be placed outside the decision-making process with no opt-outs and no say.

Some noble Lords have argued that the centralising provisions of the treaty—notably the aim of a single currency—make it unacceptable. We are not obliged to join a single currency. I do not agree with the noble Lord, Lord Cobbold, that it is necessary to have a single currency. In any event, I do not see a single currency occurring in the way envisaged in the treaty. A central core of countries may form a single currency. That does not oblige us to join. Can noble Lords really envisage Spain, Portugal, Greece or even Italy joining a single currency? I cannot. That does not mean to say that Britain cannot benefit from a low inflation European monetary regime. I find the horror shown by some noble Lords of any fixing of currencies as totally unrealistic, as is the belief among others, and sometimes among the same people, that Britain could behave today as though she were still the leading industrial power in the world with an empire at her command.

I have given only negative reasons for passing the Bill. To be quite honest, I think that they are sufficient. It is quite true that many European leaders look upon this treaty as being a step towards a federal Europe. However, the British Government have shown great skill and determination in making sure that the treaty in practice is no such thing.

The opt-outs on the single currency and the social chapter make sure that Britain is not dragged along the federal path against her will. The fact that defence, home affairs and justice are separate pillars of the European Community in co-operation, and not part of the European Community legal set-up, also ensures that we shall manage our own affairs in these matters.

There are positive recommendations for the treaty: the stressing of subsidiarity, however difficult to define, is a step in the right direction. The increased powers of the European Parliament, although small, will add a check to the European Commission.

However, the main reason that I support the Bill and the treaty is that if Britain does not ratify it, this country will be isolated and alone. We must argue and fight for what we believe in: free trade and an open community of nations, not a closed federal community. But we have to fight and argue for them inside the Community where the decisions will be made.

11.57 p.m.

The Marquess of Donegall

My Lords, I think I am alone among your Lordships in having recently voted in a referendum on the Maastricht Treaty. I voted "no"—not on this occasion on the merits of the treaty, but because I could not go along with the campaign in favour of it. That campaign was pursued by the then Irish Government, based as it was, so far as I could make out, exclusively on the fact that to ratify it would be worth £6 billion in what I believe is known as convergence money. I did not think that £6 billion of someone else's money by itself justified ratifying a treaty with such diverse ramifications as Maastricht. I was not alone in not having read the treaty. I am quite sure that not more than a tiny percentage of my fellow countrymen either possessed or had access to a copy of it, but everyone understands £6 billion, so I was in a very small minority.

I think that exemplifies very well the wide divergence of opinion which exists within the Community, not necessarily between governments but between peoples in the donor and recipient states. I also think that it is the most important issue and at the same time one of the most complex to come before your Lordships' House in the 40 years during which I have been a Member of it.

Having now read most of the abbreviated copies of the treaty which have been sent to me during the past few weeks, I have reservations. However, since most of them will already have been expressed or, in the course of this long debate will be hereafter far more clearly and cogently than I am capable of doing, I do not propose to weary your Lordships with them now.

For a short time I wish to examine the future of the post-Maastricht situation which is, to me, still very obscure. Let us imagine that, as seems probable, Parliament ratifies the treaty. Let us assume that the German Federal Court and the courts in this country give the all-clear, then the treaty will be operational throughout the Community. However, it will not operate in the way that the signatories visualised 17 months ago. I do not see how it can; too much time has passed and a sequence of incidents has revealed too many fault lines for that to be possible. We have had the original Danish referendum, the very close calls in the French referendum, the departure from the exchange rate mechanism of Italy and the United Kingdom and, most importantly, the unforeseen consequences of German reunification. None of that was anticipated in February 1992. Add to that the deepening depression on the Continent, and economic and monetary union, at least within the timetable set out for it, becomes so unrealistic as to be absurd.

Regarding the single currency—the ultimate goal of economic and monetary union—as noble Lords know, Parliament has the last word for its introduction here. It may well be, as my noble friend Lord Parkinson said in a fine maiden speech, that it is foolish to ratify a treaty which one knows perfectly well is not going to work. But at least Parliament has the final word on introducing the single currency here. But we should not be wasting time on such an irrelevant distraction. Rather, the first priority for the Community should be the peace and security of Europe. In that context the state of affairs in Yugoslavia is a cause for very grave concern.

One thing is certain. At the end of the day the electorate will judge the Maastricht Treaty by one criterion only; namely, whether or not it assists towards the creation of a peaceful and stable Europe. By "Europe" they will be thinking of the Continent and not just of those countries within the present boundaries of the European and economic communities.

At the latter end of the 19th century those people who were opposed to the imperialistic policies of Lord Salisbury's Government were sometimes known as Little Englanders. I do not think it is an unfair analogy to describe the President of the European Commission and those who think like him as Little Europeans.

We may not be at the heart of Europe. Elementary geography suggests that we are not. But when my right honourable friend the Prime Minister says that that is where we should be, his statement has this much going for it: we are not far from the heart of Europe, and for the sake of our own security we cannot ignore what goes on there. For nearly 300 years we never have. Since at least the time of Queen Anne and the great Duke of Marlborough Britain has played its part in Europe. More often than not that has been a decisive part. There cannot be a regiment in the Army List which does not number among its battle honours Blenheim, Waterloo, the Peninsula, Balaclava and many others, not to mention the major engagements of two world wars. Those battle honours are living testimony to the part which Britain has played in Europe down through the years. Now they are part of history, and we ignore history at our peril.

Europe will not necessarily become a safer place. We do not know whether America under President Clinton will always be the same America that we have grown used to. Without statesmanship and wise counsel Europe could become a very dangerous place, the aforementioned Yugoslavia being ever before our eyes. It needs Britain and British influence at its centre. For me, Maastricht stands or falls on that issue.

12.5 a.m.

Lord Harmsworth

My Lords, the world is developing into some mighty and clear-cut trading blocs. Those blocs are forming at a time when large areas of the developed world are experiencing a level of material well-being hitherto unreached. Furthermore, for whatever reason, the quality of the finished goods which are now so easily purchased has in many cases improved to the point at which turnover in them may well not be as fast in the future as it has been in the past.

One of those great trading blocs is China, for whose people's resourcefulness and industry I have a very great deal of respect. It came as some surprise to me to learn, for instance, that nearly 70 per cent. of China's urban households have colour televisions and 81 per cent. have washing machines. Depending on how one measures it, mainland China, with about one-fifth of the world's population, has probably the second largest gross domestic product in the world. It has an economy which is growing at 8 per cent. to 9 per cent. compound and its growth is, if anything, accelerating.

Real gross national product in 1992 grew at 13 per cent. In the third quarter of 1992 national industrial output increased by 21 per cent. and fixed capital investment grew by 38 per cent. In that year private and foreign-invested enterprises grew by around 50 per cent. while state enterprises fell by 1 per cent. Admittedly, retail prices rose overall; but last year the country had a balance of payments surplus. It would surprise me if that balance of payments surplus is not largely maintained, particularly if the yuan is allowed to find its market level.

In the first quarter of this year real gross national product rose 14 per cent. on the same quarter of last year. Industrial output was 22 per cent. higher and fixed capital investment rose by a staggering amount: by state industries, 70 per cent; by local governments, 80 per cent. That in the most populous country in the world.

The consequences of all that will not be lost on your Lordships. The population of China is about four times greater than that of the United States. By the turn of the century it is estimated that mainland China will have the largest economy in the world. It may well leave that of Japan far behind. Even so, Japan is likely to be in third place after the United States, with Germany in fourth place. India, with its vast population of 850 million and its own major economic potential, is currently in fifth place—all measured on purchasing power parities.

Excluding Japan, East Asia, according to the World Bank, will grow at a compound rate of 7.3 per cent. over the next 10 years. That compares with a mere 2.5 per cent. for the top industrial countries of the Group of Seven. It will be no surprise to me whatsoever if for decades to come the economies of the Far East, and particularly that of China, will represent a very important consideration in planning by each of the other industrial blocs into which the world seems to be settling.

At present the EC's gross domestic product is fairly similar to that of the United States. But it does not take much imagination to envisage a European economy overshadowed before long as a result of the major compound growth of those eastern trading blocs. Of course, things are not as simple as that. There are all sorts of additional features to the pattern which give the raw figures a different complexion. For instance, in greater or lesser degree, some countries have large overseas manufacturing bases. We do ourselves. Those distort the picture, but they provide little comfort.

My view is that we have no option but to pursue with the utmost vigour the unity, however it may shape out, that the EC affords. This is no time for being wobbly. The path will be difficult; it may even be uncongenial; and the route will change, but the unity must not. What seems certain to me is that some of the foundation stones on which the EC treaties stand will be sorely tested, and some will undoubtedly crack—even before the deadlines prescribed by the Maastricht Treaty. That may be no bad thing, for it will result in a stronger and better-based evolving product.

Would that in the EC there were already a greater co-operative spirit. The histories of our fellow member states are disparate and rich. There is no reason why the unity that the EC affords should result in such important heritages being devalued. Indeed, the flowering of the cultures is encouraged. But would that the relative strengths of the individual member states were better individually taken advantage of.

The UK, perhaps more than most, has tended to look outwards. Is not that something which should provide an immense source of strength to other EC countries? Other member states, possibly those with histories strong in overseas interests, have similar strengths. Together, the EC member states have interests that span the world.

The road towards greater integration will take a long time to travel and will provide many an inconvenient moment. It may even upturn political parties of its day. Maastricht is only one milestone. Some of its goals are unrealistic; some of its priorities are wrong; but the bonding of a powerful whole must be persisted with. We are right to wade in there and refashion whatever we feel we must. Already, with the benefit of hindsight and, for some, foresight, some of Maastricht's inherent weaknesses have become plain. But let us not abort the journey. We in the EC must get our act together. Over the horizon other trading blocs are developing at a phenomenal rate. We have no time to lose.

12.13 a.m.

Lord Weidenfeld

My Lords, the case for Maastricht has been more exhaustively made than the case for the alternative—the risk of staying out. Or at least, that particular alternative has been sketched in broad black and white brush strokes. There is the naively optimistic view about Britain "going it" or, dare I say, "floating it" alone, and there is the apocalyptic view that non-alignment spells instant disaster.

I must admit that I lean more towards the latter view, even though the descent may be slow yet inevitable. The assumption that we could go on profiting by the single market, yet not be bound by any further conventions and refinements, may well be starry-eyed. A two-tiered Europe harbours many dangers. The leadership of the continent would be more firmly within the grasp of the Franco-German duopoly; the tenets of faith of a free market currently prevailing may easily be changed in favour of protectionism, which would hurt us badly.

The transatlantic special relationship with a Britain at the heart of Europe has a greater chance of surviving and playing an important and effective part than with a Britain that is out of Europe. That Britain could be easily marginalised and bypassed by the United States in favour of Bonn and Paris. There is also a danger of progressive attrition of the Atlantic alliance heightened by fragmentation in Europe. As for the Commonwealth, for the sake of which British Governments in the 1940s and 1950s gave up the chance of European leadership, this Commonwealth can scarcely be regarded as a coherent entity, and the Royal prefix in what were once the great dominions is not now in great demand.

There are those of us who were wary of the genesis of the treaty, the hectic pace of which, in my view, largely sprang from French malaise and German angst about the consequences of reunification of the two Germanys. But we should pause and reflect that by being at the heart of Europe, giving our counsel and co-determining policies, we have a truly worthwhile and beneficial role to play.

If we were full partners we could have a say about timetables and routes of the European journey. Some Euro-sceptics are alarmed because they fear that there is no scope for flexibility. I think that there is great scope. The ability of the Secretary of State for Employment to stave off the 48-hour week for a decade is a case in point. Why are we so fearful that on this and many other issues we could not rally to our side sympathetic voices in other European countries, stir up debate and change course? As Europe grows by the inclusion of new members the whole thrust will be for looser and not more rigid structures and procedures.

I cannot help feeling that below the surface, in the subconscious of many a Euro-sceptic, lies a sense of national inadequacy, a fear for Britain not being up to competing with clever Frenchmen, wily Italians and ruthless Germans, a fear that the products of the French Hautes Écoles, the boardroom buccaneers of the Ruhr, and above all the Brussels bureaucrats will outsmart and outshine their British counterparts. If we were ready to send our best people to Brussels, British influence in the Commission could be formidable. There are some Members of your Lordships' House whose past record and lasting influence is remarkable. The present ranking British Commissioner is renowned for his intellectual grasp and effective performance.

No, my Lords, Britain's reputation in Europe, West and East, is still very high. In spite of the calamitous waves, currents and campaigns of self-castigation and delegitimisation of our institutions and traditions we are still the envy of those who are short on legitimacy and tradition. As Europe widens and we look into the next century, Britain's role could indeed be increasingly important. But it must be played within the council chamber and not from the ante-chamber!

When this treaty is ratified the primary objective of British foreign policy should be to try to extend the Franco-German axis into an Anglo-French German triangle. Better and closer relations with the Federal Republic is a priority. However, the premise must be that the genuine understanding between France and Germany is unshakeable and is an axiom. Our credentials for shared leadership in Europe is our status as a nuclear power, our seat on the Security Council, our bridging role in the English-speaking world and our distinction of having the oldest and, on balance, the stablest political democratic system in the world. Hence I believe that we should unhesitatingly and massively, on all sides of your Lordships' House, grant the Government the mandate to ratify the Treaty of Maastricht.

12.20 a.m.

Lord Vivian

My Lords, I have listened carefully to most of the debate today but I must apologise to your Lordships for not being in my place until about a quarter to four this afternoon due to the fact that I was travelling back from Rome.

I am not in the league of all those who have and will have spoken in this debate, but I have been privileged to listen to many excellent speeches by your Lordships today. However, the aspects of the treaty that I was going to speak about have been covered a number of times by many of your Lordships and I do not intend to go over that same ground at so late an hour.

But there is the aspect of a common foreign and security policy which I would like to touch on very briefly. Concerns have been expressed about our national interests conflicting with a common foreign and security policy. I believe that they will not conflict because the Government ensured at Maastricht three provisions which they deemed to be absolutely vital. First, there is provision that unanimity will remain the rule in decision-making. Secondly, any decision to make a matter the subject of joint action requires unanimity; and, thirdly, any decision to allow implementation of such decision by qualified majority vote similarly requires unanimity. That means that if the United Kingdom felt that all decisions, however small, should be taken by unanimity, then they would be.

On the security and defence front in which, as some of your Lordships are aware, I take a particular interest, the Government have been keen to see a stronger European contribution to common defences. The treaty of Maastricht provides three basic requirements: first, that any new arrangement should respect NATO obligations and be compatible with the NATO framework; secondly, that defence issues should be dealt with by the Western European Union and not by the European Community; and thirdly, that the Western European Union should not be subordinate to the European Community.

However, I have to sound a word of warning at this stage concerning the proposed levels of United Kingdom Armed Forces, and that is that the future reduced levels will be too low. It is essential that we retain an army of around 130,000 if the United Kingdom is to support the Western European Union in any realistic way in the future. Overall, I do not agree that our national interest will conflict with a common foreign and security policy, but rather it ensures that we remain free to set our own priorities and are able to act independently in foreign and defence policy matters.

In summary, I can see many benefits for the United Kingdom which should come from the ratification of the treaty of Maastricht. There are the benefits of subsidiarity; the provision of fining member nations for non-compliance with legislation; the European Court of Auditors will have more power to fight fraud; there will be additional rights for the European citizen. The United Kingdom has opted out of the social chapter. Britain can decide whether and when to join a single currency; and, lastly, the two pillars for foreign and security policy and justice in home affairs based on inter-governmental co-operation are significant and important matters which will allow us to act independently whenever necessary.

I am convinced that the Treaty of Maastricht represents the best way forward for Britain and that the United Kingdom should take the lead and make its presence felt more in the European Community. We cannot be left out in the margin and there is no alternative to go to. The country benefits from the Treaty of Maastricht and I strongly support the ratification of the treaty.

12.25 a.m.

Lord Pearson of Rannoch

My Lords, I had the great privilege of opening a debate in your Lordships' House on 17th February of this year about the constitutional effects of ratifying the Treaty on European Union signed at Maastricht. I was therefore then able to say most of what I have to say about this unfortunate treaty and so I do not propose to repeat it all again tonight.

Some of your Lordships may believe that I have been placed to speak last as a kind of punishment for being rebellious about this particular piece of government legislation. There may be some truth in that, but I think it is more the case that as the Government and Opposition Front Benches regrettably appear to agree with each other that the treaty should be ratified, it was felt that someone ought to try to sum up the position of those of us who believe that the treaty should be rejected or, at the very least, that the British people should be offered a referendum before it is ratified.

Obviously, with 52 of your Lordships speaking with such experienced eloquence for some nine and a half hours, this task would be difficult even for someone of much greater skill than me, and so I must ask your Lordships' indulgence for what you are about to hear. Perhaps the best that I can do is to identify some of the main themes which have run through our debate and invite my noble friend the Minister to explain the Government's position on them very clearly when he comes to sum up.

Before I do so, I would like to make a general point. The debate has been of a very high standard even for your Lordships' House. Apart from my noble friend Lady Thatcher herself as a former Prime Minister, an unusual number of former Foreign Secretaries, Cabinet Ministers, European Commissioners and other very senior bureaucrats have spoken. One might say, as my noble friend Lord Cockfield admitted, that they are the generation of people and, indeed, very largely the people themselves who have taken us to where we are now with Europe. I, of course, do not see that as a particularly healthy position. The expensive failure of the common agricultural policy comes to mind, as does the Community's inability to do much about the former Yugoslavia, as also does the EEC's declining share of world trade and its rising unemployment. Several noble Lords have referred to these matters and to the successful and growing markets elsewhere, particularly in China and the Far East.

But the thought which has struck me most forcibly listening to nearly all the debate, and to all the speeches from the political and bureaucratic great and good to whom I have referred, is that most of them spoke favourably of their deeds in bringing us to where we are now, and most of them spoke in favour of ratifying the treaty. But there were two notable exceptions to this self-satisfaction among our architects of modern Europe—and those two exceptions were my noble friend Lady Thatcher and my noble friend Lord Parkinson. I submit that because they had the courage to admit that Europe has not turned out as they had intended it should when they were in power, we should treat their speeches with much respect, and I trust that my noble friend the Minister will answer the points they made very carefully indeed. I would also like to pay what I think is the normal compliment to my noble friend Lord Parkinson for his maiden speech, but I do so on this occasion with unusual sincerity. I do think that sometimes we compliment people on maiden speeches —I am sure that it happened to myself when I made my maiden speech—and perhaps we do not think that it was all that great a speech. I happen to think that my noble friend Lord Parkinson's speech was a very great speech. That is what I mean.

So, the first of my themes concerns the further cession of our parliamentary sovereignty to Brussels. It is simply wrong of those who support this treaty and therefore this Bill to pretend that it is not a highly centralising measure. The famous subsidiarity clause in Article 3(b) is meaningless and unenforceable. If my noble friend the Minister does not agree with me, I am afraid that he must identify the areas which fall within the exclusive competence of the Community as Der that clause and those which do not. He must also explain how the Government dare to pretend that the subsidiarity clause in some way strengthens our independence when the conclusions of the Edinburgh Summit itself confirm that it does precisely the opposite. My noble friend Lady Thatcher quoted the paragraph in question which confirms what I have just said so I do not propose to repeat it now.

I am afraid that my noble friend must also say how the union treaty can be described as decentralising when it would introduce or extend the competence of the Council by qualified majority voting or by co-decision into areas of education, culture, public health, consumer protection, trans-European networks and development co-operation, transport research and technological development and the environment. There is also the question of social policy and whether or not we have really opted out of the Community's socialist dreams in this area. Our much-vaunted opt-out is already proving worthless, I would submit, as Brussels fires at us piecemeal what she may have failed to impose wholesale. The unfair competition provisions of the Treaty of Rome are also lurking in the background. I shall return to this area.

Although not within the strict ambit of the Bill, but it shows how Brussels's influence is seeping ever outwards, I would ask my noble friend whether he accepts or rejects the contentions that Titles V and VI further pool our sovereignty in the areas of foreign policy, defence, justice, and home affairs. The Foreign Office has said that these titles are to be bound by international law. I ask these questions again, because I put them to my noble friend Lady Chalker on 17th February and I did not get an answer at the time. I would be particularly grateful for the answer to two questions. They are these. First, under paragraphs J.8(2) and J.3(2) of Title V, could the Council prosecute military action, including British troops, by qualified majority vote? Secondly, what weight do the Goverment attach to the Declaration on Voting in the Field of Common Foreign and Security Policy which they have signed, whereby it is agreed that they will, and I quote: to the extent possible avoid preventing a unanimous decision where a qualified majority exists in favour of that decision"? Surely my noble friend must agree that handing over the control of our troops in action to qualified majority voting in the Council of Ministers—if that is what these clauses do—is a substantial cession of our sovereignty.

Most importantly to many of us, can I ask my noble friend whether the Government would agree that Her Majesty the Queen should be exempted from citizenship of the Union which is proposed by the treaty, or will the monarch be subject to the duties imposed thereby in Article 8.2? Indeed, since my noble friend Lady Chalker has said on more than one occasion from the Dispatch Box that there are in fact to be no duties imposed by our citizenship of the Union, although Article 8.2. clearly seems to say that there are, would the Government agree to remove the word "duties" from the treaty? Can my noble friend tell us exactly how the Government view Article 8, paragraphs 1 and 2?

Before leaving the issue of sovereignty, it would be wrong not to ask the Government if they really believe that we will be able to opt out of monetary union in 1999 if we have by then fulfilled our treaty obligations to meet the earlier stages of returning to the pernicious exchange rate mechanism and so on. I think it would be helpful if my noble friend were to answer the questions of the noble Lord, Lord Jay, particularly, in this regard, and the questions that he put about the creation of a European central bank. I think that the questions of my noble friend Lord Parkinson in this area also bear special interest.

It was interesting to me, too, that my noble friend Lord Gilmour of Craigmillar said that the EMU and so on were deeply flawed. He made it clear that he did not think that they would come about. So, if that is so, do the Government agree that Articles 102 to 109 of the treaty, like our duties under Article 8, are really so unrealistic that they do not mean anything either? If so, would it not be wiser to leave them out of the treaty?

I come then to the second theme which has been put forward by those who support this treaty, warts and all, and they all seem to agree that it is pretty well endowed with warts. This is that we shall in some way be disadvantaged commercially if we do not ratify it, because the other members of the Community will go ahead and set up their Utopia without us. They ask us what is the alternative strategy that we put forward. My noble friend Lord Pym put that forward very strongly. I have to say that my noble friend Lord Cockfield was interesting in that regard, because he said that he regarded the treaty as of little fundamental consequence. I felt that that went some way towards answering the question of my noble friend Lord Pym and others who asked what the alternative was. If it is of little fundamental consequence, it presumably does not matter if we do not ratify it.

If we fail to ratify this treaty we shall be left with the single market, as many of your Lordships have said, which was set up by the Single European Act. We should perhaps pause to reflect that the problems we already face from Europe flow from that Act. Indeed, my noble friend Lady Thatcher has described the Single European Act as burning our fingers. She has also rightly warned that to ratify the Treaty on European Union would be to put our head in the fire.

The 48-hour week; the acquired rights directive; young people at work; meat hygiene; works councils; the irrelevant compliance cost assessments; and the Merchant Shipping Act are just some of the ruinous measures upon which, as a result of the Single European Act, we can already be outvoted in Brussels or overruled by the Luxembourg court.

I should also mention fraud against the Community, which has been the subject of several debates in your Lordships' House and at least two very well informed reports. When the commissioner, Sir Leon Brittan, came to see us the other day he had to confess that he could not say to the nearest £5,000 million how much is being stolen annually from the Community's budget.

I could go on about carrots becoming fruits, the shape of cucumbers, the 29,000-word cauliflower directive when, I remind your Lordships, the Ten Commandments contain only 150 words, and so on. Perhaps that is a joke but when I look at it I begin to fear that I am looking at something very sick.

My noble friend Lord Alexander of Weedon and others went out of their way to quote a recent letter from the Confederation of British Industry. My noble friend Lord Pym said that the City of London is in favour of the treaty. I am afraid that I must disagree with that. I was extremely refreshed by the speech of my noble friend Lord Sharp of Grimsdyke. As soon as he began to speak I realised that we were listening to a genuine industrialist and not someone who had dealt merely in the theory of the animal that we are looking at. The noble Lord, Lord Harris of High Cross, also underlined my remarks.

A number of your Lordships have received a letter from the Confederation of British Industry, which is somewhat contradictory to say the least. I can tell your Lordships that you are about to receive another letter signed by seven of the country's leading industrialists and figures in the City of London. Between them they span a range of experience with which I need not trouble your Lordships; it covers all our overseas interests and all interests in the City of London. If time permitted I should like to quote more from the letter. However, I hope that your Lordships will read it when you receive it. It concludes by stating that, Maastricht is the symbol of a bureaucratic and protectionist approach which has accompanied an alarming decline in Europe's share of world trade". The letter states that for that, and other reasons, the majority of well informed businessmen privately look to the House of Lords as the last chance to reject a Treaty which has never commanded popular assent in the United Kingdom and is increasingly failing to do so in the Continent of Europe". To dismiss the suggestion that we might in some way be "left behind" by a multi-speed Europe I can to no better than ask the Government to refute the speeches made today by my noble friends Lord Parkinson and Lord Sharp of Grimsdyke and the noble Lord, Lord Harris of High Cross, among others. If the Government cannot say why these noble Lords are wrong, they cannot in good faith proceed with this treaty.

I hope that the Government will not answer in tune with three other themes which are played against those of us who oppose this treaty. The first of these themes points out that Clause 189 of the Treaty of Rome first required European law to be enacted in all member states. I believe that the noble and learned Lord, Lord Wilberforce, made that point most forcefully. Qualified majority voting is in the Single European Act. So, the theory goes, we cannot or should not start complaining about it all now. But the truth is that we are only beginning to realise the true nature of the beast to which the Treaty of Rome and the Single European Act gave birth. Surely even the Government must agree that when you have burnt your fingers, as my noble friend Lady Thatcher confessed that we did —and we did so, of course, somewhat under her guidance—you do your best to cure the resultant pain; you do not go ahead and put your head in the fire.

The second of these other themes suggests that we should ratify the treaty and then "get in and fight to put things right". We are supposed to do this from a new vantage point at the heart of Europe. Well, my experience on your Lordships' Select Committee leads me to opine that the European beast simply does not have a heart. It is a huge and growing bureaucracy; so it has an insatiable lust for power, but nothing resembling a heart.

I have also to point out that one of our main aims in 1972 was to get in and reform the common agricultural policy and that we have singularly failed to do so. I understand that in the United Kingdom it now adds about £250 per person per annum to the cost of our food.

Finally I must point out that Britain has only 10 votes out of 76 when it comes to counting the qualified majority of 54, and only 16 per cent. of the votes in the European Parliament. So it is pretty obvious that our prospects of slaying this dragon are indeed negligible.

The third theme that some of those who wish to ratify the union treaty advance to those of us who do not is not only illogical, it is also dishonourable. It goes like this: "Well, don't worry. The union treaty is so crazy that it cannot possibly work or at least a lot of it is going to take so long to bring about that it really is not worth bothering about, so let's ratify it to save the political careers of those who have been misguided enough to support it, and then it will just fall apart and we can all relax." I submit that that is not a solution which is honourably open to your Lordships' House. It is surely our duty to examine the treaty and the Bill—

Lord Bonham-Carter

My Lords, will the noble Lord tell the House who said that which he has just described? I should be interested to know to whom he ascribes those dishonourable sentiments.

Lord Pearson of Rannoch

My Lords, I was giving the gist of what has been said to me privately by a number of people on these Benches. A number of noble Lords who have spoken in the debate this evening have said that much of the treaty—for example, Articles 102 to 109—will not come about. They felt that the whole business of monetary union was very unlikely. I do not include my noble friend Lord Carrington in the category of my paraphrase of what other people have said to me; but my noble friend said that much that is contained in the treaty occurs too early and is unlikely to come about in the foreseeable future. No doubt we can look at Hansard and, if I am wrong, I shall be happy to apologise.

I submit that that is not a solution which is honourably open to us. It is surely our duty to examine this treaty and the Bill which proposes to import it into British law and to amend it in accordance with our consciences. Perhaps I may remind those who wish to take the line, or something like it, which I have just spelt out, that there were those who hoped that it was not worth taking the Bolsheviks seriously or, indeed, Hitler. I do not believe that we can afford to dismiss lightly the prospect of an unelected European super-state with all the attendant dangers which have been so ably defined by so many of your Lordships this evening.

Finally, there is an argument which is perhaps peculiar to those of us on the Conservative Benches and which is largely lying below the surface of our debate this evening, although at least one noble Lord touched on it. Some supporters of the treaty on these Benches have said to me, "No Maastricht means no Major and that means no Conservative Party". This cannot be true. If it was, surely the Labour Party would be supporting a referendum on the union treaty. After all, it supported one for Wales and another for Scotland. No my Lords. If your Lordships' House was to insist on a referendum, and if the British people rejected the treaty, and if the Prime Minister felt that he then had to resign—which I very much hope he would not—the Conservative majority in the House of Commons would hold and a new leader would be elected.

In the wake of a referendum, the Prime Minister or his successor would be leading a more united Conservative Party because we could all abide by the decision of the people. If noble Lords opposite do not agree, they have the solution. It is an insult to the British people to suggest that they would vote against the union treaty because they would really be voting against the Government, or that they would not understand it. A brief referendum campaign would explain to them exactly what it is about, even if they do not already have a pretty shrewd idea, which most British people do. I think that it would also explain the treaty to a number of your Lordships who have spoken tonight in its support but who, with the greatest respect, I am not entirely sure have read it. Some noble Lords have stated that it is too late to have a referendum on the union treaty. I would point out that the Danes had one only a fortnight ago.

There is another good reason why this issue uniquely deserves a referendum as I mentioned on 17th February. Most of us who dislike referenda do so because we trust our system of parliamentary democracy to take our national decisions for us, but that trust can no longer hold when the decision in question would undermine the very system of parliamentary democracy upon which we otherwise rely. A decision to ratify the treaty would undermine that system in precisely that way and it could not be very long before our parliamentary democracy collapsed. Therefore, in my view, which is shared with many others of your Lordships, the people should be consulted on this issue.

For all these reasons, I hope that your Lordships will find it in your hearts to amend the Bill and the treaty upon which it rests, and I hope that you will have the courage to test the opinion of the British people before the Treaty on European Union signed at Maastricht is ratified.

12.45 a.m.

Lord Holme of Cheltenham

My Lords, with the winding-up speeches we are now approaching the end of this epic debate. There have been nearly 10 hours of speeches today, although we have another day tomorrow, as the Chief Whip is reminding me by his visible body language even at this hour of night.

There has barely been a contribution that has not in one way or another held your Lordships' attention. I was very struck by the noble Lord, Lord Pym, who categorised your Lordships as critics or creators. "Critic" is a fair description because most of those who oppose the Bill rest their case on negative arguments. On the other hand, "Creators" is a fair description too, because those in favour of Maastricht recognise that it cannot be an end in itself and that it will need following up. It will need following up for the 1996 IGC and, in the case of monetary union and a common security and defence policy, it will need following up a great deal more urgently.

Of the creators in tonight's debate it is right for me to start by mentioning noble Lords from these Benches, not only the noble Lord, Lord Jenkins of Hillhead - and I am sure the noble Lord, Lord Beloff, will wish to notice the persistence of the leader of my party in being here until the very end of the debate -but also the noble Lords, Lord Beaumont, Lord Ezra and Lord Cobbold; and in particular the admirable speech of my noble friend Lady Williams of Crosby. From other Benches, we heard the contributions of the noble Lords, Lord Richard, Lord Carrington, Lord Cockfield, Lord Hayhoe, Lord Howe, Lord Thorneycroft and Lord Rawlinson.

On the side of the critics a moving speech was made by Lord Tonypandy, a characteristically exuberant speech by the noble Lord, Lord Beloff, a much trailed, but I am bound to say, to me, slightly disappointing, speech from the noble Baroness, Lady Thatcher, and a most notable maiden speech from the noble Lord, Lord Parkinson. I owe the noble Lord an apology. Although slightly late into the Chamber, so anxious was I to hear him that I took my place while he was speaking. I am glad that I did, as it turned out, because I felt some tension. I can rarely remember a speech which I admired so much both for its construction and for its delivery while disagreeing with almost every word said.

It was difficult to avoid the impression at times that we were discussing not just the future of Britain in Europe but also the future of the Conservative Party. Who can doubt, looking back, that the opt-out on the Social Chapter, which has its merits and demerits, has far more to do with attempting to unite a party which today, as on other occasions, has been visibly divided, than it has to do with the merits of the case? We now know that on this issue, and maybe on others, the party is looking to different leaders and different whips. I read in the public prints that the noble Lord, Lord Pearson of Rannoch, whose very interesting speech preceded my own, is the whip of the dissident tendency on the Benches opposite. Having heard his speech, I cannot imagine that the dissident tendency could be in more appropriate hands than his.

Lord Pearson of Rannoch

My Lords, I am sure that the noble Lord does not believe everything he reads in the newspapers. My position has simply come about because of the debate in my name of 17th February. I can assure the noble Lord that my position is nearer to that of a fag running between some noble Lords who are interested in some of these issues.

Lord Holme of Cheltenham

My Lords, I will have to accept that the noble Lord's role is more humble than I had thought from reading the newspapers. The question of the referendum has been mentioned throughout the debate. The noble Lord, Lord Blake, referred to that matter in a typically fair and appropriate manner. I believe that there is a strong case that has to answered for a referendum on constitutional issues and this is a constitutional issue. But I, like the noble Lord, Lord Beaumont, who spoke from our Benches, and indeed the noble Lord, Lord Gilmour, believe that if there were a time for a referendum on the issue of sharing British sovereignty —a constitutional issue—it was some 10 years ago and it is now too late.

Now is not the time to hold such a referendum for another very practical reason. The whole of Europe is waiting with growing impatience for us to make up our minds in this country and to get on. So both for the constitutional reasons which have been prayed in aid and for the practical reason that the future of the European Community is now waiting on us, I have come to the conclusion that the referendum is a displacement activity for those who oppose the Maastricht Treaty and who seek to find backdoor means of doing what they fear they are not able to do by the front door.

However, one of the reasons that the case for a referendum attracts some public resonance—a reason that we in this House should accept—is that there has been a notable gap between the governors and the governed on the issue of Europe ever since the days of the first referendum campaign which many of us in this House took part in. There is a gulf in understanding and in consent. One does not have to subscribe to the conspiracy theory put forward by the noble Lord, Lord Beloff, to think that there is a problem of leadership and a democratic deficit which it is up to the political classes of all parties to try to bridge by every means that they can.

One thing that the Government could do once the Maastricht Treaty is through—I believe that it will not be long delayed—is to ensure that in the run up to the IGC in 1996 this is not treated wholly and solely as a matter to be discussed within the governing party but that there is some kind of national debate. The Prime Minister has opened the door to this and we on these Benches would respond positively to the idea that there is an alternative version of Europe which could command far wider agreement than could possibly be reached solely and unilaterally within the Conservative Party. I think, for instance, that there is a widespread perception that the Europe of the future should be more democratic. There is a fairly general agreement that subsidiarity should be made to mean something and there is fairly general support for the proposition that Europe should be less bureaucratic and more democratic. That might mean that we would have to look at the electoral system for the European Parliament and that we should be prepared to give the European Parliament more power rather than less power and make in some measure the Commission and the Commissioners more responsible to it. It would certainly mean that we would have to progress the idea of citizenships, rights and duties of one kind or another in Europe.

But in looking to subsidiarity as part of the solution the Government in particular should recognise—perhaps the noble Earl would care to respond to this in his summing up —that subsidiarity cuts both ways. It is not simply a matter of dragging back from Brussels things that should be done more appropriately at the level of the nation state. It means recognising, as every other country in Europe does, that many things done at the level of the nation state should be done by local government and should be done in Scotland and Wales because subsidiarity is about the dispersal of power and not about its monopolisation at the level of the nation state.

The noble Lord, Lord Carrington, in an exceptionally interesting speech referred to the idea that concepts are not really the British way of doing things. Of course we all know that that is the case. The British are famously pragmatic. I suspect that when dealing with constitutional matters concepts can be helpful, not only because we are dealing with European partners who are used to conceptual thinking and who are more familiar with concepts, in a way in which we pride ourselves that we are not, but because we are ourselves having to deal with them in order to work out what the constitution of the post-Maastricht Europe should be. To paraphrase Edith Cavell, pragmatism is not enough. In this country we have to think more about the future of Europe instead of emoting, we have to negotiate instead of declaiming and we have to look ahead instead of living so much in our own glorious past.

In his opening remarks the noble Lord the Leader of the House attacked the concept of federalism, and other noble Lords have leant on that. It is certainly true that federalism has been given a very bad name in Britain, not least through the leadership of the noble Baroness, Lady Thatcher. It has been interpreted as being synonymous with a European super state. That is not what federalism is. Federalism is a system of sharing and layering power between communities, between peoples, between nations and between regions. Speaking as an unreconstructed federalist from Benches which have traditionally been federalist, although giving the concept a different name if that makes it easier for the party opposite, I believe that in considering the post-Maastricht dispensation in Europe some of those ideas will prove extremely helpful.

Finally, in this debate today what we have really been talking about—and what has given a special character to the debate—has been Britain's future. Many noble Lords have spoken of Britain's economic future. I wonder whether there is any viable alternative for us as an offshore Hong Kong or Singapore. The noble Lord, Lord Alexander of Weedon, dealt with that concept well. However, I suspect that that vision of a service economy is a symptom of what has gone wrong with the British economy in the past 10 years. Insufficient emphasis has been put on manufacturing industry and the competitiveness it needs in order for us to succeed in today's world. The idea that we can be the Hong Kong or Singapore of Europe is an illusion.

We have also been talking about Britain's political future. Those of your Lordships who have pointed out that from the beginning the European Community has had a political dimension have been perfectly right. Anybody who has represented that it is wholly and solely a matter of economies and markets has been misleading the British people. It has never been so. The Community has always had a political dimension. Would it not be a great deal better to face up to that and try to shape that political future in a way which we British would find more congenial, in the direction of co-operation and partnership rather than of posturing? We should certainly avoid what will not be splendid isolation but will in reality be pathetic isolation if we choose to go the non-European route.

I accept the sincerity of those who fear some loss of autonomy and identity in moving forward with the European project. However, I remind those latter-day English nationalists—and on the whole they are English nationalists rather than Scottish and Welsh nationalists—of the old saw: What should they know of England who only England known?". I would certainly say to the Government that the time has come, to take the remarks of the noble Lord, Lord Ashburton, for the Government to get on with it. The Government should stop tiptoeing around on eggshells trying to appease those of their supporters who are still not happy. There is too much else to do in Britain and in Europe, and it needs to be done urgently. I believe that if they do get on with it and make plain their commitment to European progress the Government will be pleasantly surprised to find just how much support there is for them in this House and the whole country.

1 a.m.

Lord Clinton-Davis

My Lords, I echo the words of the noble Lord, Lord Holme, that this has been a remarkable debate. At the very outset I also wholeheartedly agree with him, and indeed, it is obvious, with the whole House, that the speech of the noble Lord, Lord Parkinson, was a joy to hear even though, like the noble Lord, Lord Holme, I hardly agreed with anything he said. His speech was fluent, well delivered and humorous, and I am delighted that he was able to express the views that he did in that way. As one whom he shadowed, and whom I later shadowed, it is very nice that he is present in this Chamber.

At the beginning of the debate, my noble friend Lord Richard referred to the substantial amendments to the Bill which had been carried in another place. I hope that in his reply the Minister will recognise the significance of those changes. They were changes that were undertaken at the initiative of the Opposition. I hope that he will confirm that there will be no further amendments suggested by the Government. I am sure that they would not be so unwise as to do that.

Of course, the difference between the Government and ourselves is that we support the treaty and we object to the opt-outs in the Bill. We recognise that the treaty is imperfect. It is a package. No package of measures can ever be ideal. But what really is at stake is whether Europe can be better motivated to deal with the huge problems which beset the Community and the United Kingdom—I refer to problems of unemployment and economic recession and problems affecting foreign policy—if we were to resile from the position adopted with regard to the treaty. I believe that the argument must go in favour of the treaty.

To risk losing the dynamic to the Community that Maastricht represents would not only be futile but positively dangerous from the point of view of this country. First, critics of the treaty urge that they support a wider conception of a community. Indeed, if they were to have their way, what would be put at risk is accession by those very countries—Austria, Sweden, Finland and others—which have been shadowing the negotiations and have approved the result. We would put at risk our standing, and influence with the developing countries of the world which have put so much store on the Lome agreements which have been of enormous significance. They have been a major exemplary factor in dealing with developing countries of the world. We would put at risk the wider development of the European Community. It would diminish our ability to compete effectively and indeed efficiently; and we would be unable to assist those least favoured areas, communities and people who find the Community able to help them in many material respects today.

By no means least, what would be the attitude of the burgeoning democracies of Eastern and Central Europe? Would they find it attractive to have a community that was unable to achieve those results that were set for it by the internal market of which the noble Lord, Lord Cockfield, was a very significant architect? They would find that the position would be bleak and unhelpful to them.

The concept of community is based on the fact that the sovereign nations of the past can no longer solve the problems of the present. By living in an isolationist world —and in my submission that is the logic of the attitudes adopted by the noble Baroness, Lady Thatcher--how can those nations ensure their own progress or control their own future? It was amidst the changing scenery that the European idea was born and indeed lives on.

The concept that was perceived in the early 1970s, and indeed before that, has been matched by considerable achievement. Yes, there have been setbacks. There have been periods of great disappointment. There has been stagnation. But there has been considerable achievement too. The nations of Europe relinquished hostilities in favour of economic co-operation and interdependence. Today, as has been pointed out by a number of noble Lords, armed conflict between member states of the European Community is absolutely inconceivable. That confirms the remarkable progress and sense of collective interest that have come to permeate the European Community. The member states' initial integration in specific economic sectors has spilt over into a range of economic activities. We have had the internal market, largely completed now, albeit with some significant exceptions. Then we have also had the concept of European monetary union. I agree with those who say that the timetable for that is slipping, but it is not an idea that will go away. As the noble Lord, Lord Cockfield, will readily agree, I am sure, it is necessary to adopt timetables because that concentrates the mind. We did not succeed in having the entirety of the internal market in operation by 1992, as was originally envisaged. I think that progress is bound to be made on the EMU front in the not-too-distant future.

Over two decades, the EPC has matured into a recognisable common foreign and security policy and a commitment to political union. But however imprecisely defined, this concept is capable of being accomplished.

Of course, we must not be purblind about the difficulties that face us and I think that there was over-optimism in the early 1970s and further over-optimism with the Cecchini Report. But what happened in the referendum of June 1975. 18 years ago, is that two-thirds of the voters in Britain endorsed British membership of the European Community. They set the seal on what was already obvious, that the only choice for Great Britain was between accepting solitary decline or integration into a larger grouping. This effaced the illusions that dead realities leave in the minds of nations and of men.

Of course, what we witnessed from the noble Baroness, Lady Thatcher, is an extraordinary misunderstanding or misstatement of what the European Community is about. The Commission has piled on extra burdens, she said. The Commission does not have the power to do that. I should have thought that a former Prime Minister would recognise that. Then she decided to savage the European Court of Justice. She attacked the way in which the judges were chosen. I believe that her concept of the rule of law, of which she spoke, is that it is her concept that must be obeyed; anything else is unacceptable.

The Community was never just a technocratic idea; nor was it only about the creation of a single market, as the noble Lord, Lord Cockfield, said. It involves, and always has done, a form of economic growth that respects human values and human needs, which is represented by the extension of the Community's social and regional policies.

These were bold concepts. Regional policy was needed to counteract the concentration of the Community's economic activities in key centres at the expense of the periphery, and the United Kingdom is at the periphery. It involves a transfer of Community resources from the most prosperous to the least favoured areas, based on need and not on a national quota. Social policy is designed to supplement, not to replace national social provisions. The European Community wishes to establish a consensus in matters of social justice, minority and women's rights and working conditions.

I turn from that to some of the myths, the caricatures and even misrepresentation of the Community, the echoes of Bruges, that we heard today. "Some sort of identikit European personality" was the argument at Bruges. That is a travesty of reality; it fails to acknowledge the historical basis of the Community experiment. There never has been an intent to end diversity; quite the reverse. It represents the rich thread of diversity that will benefit the European Community and influence the evolution of its powers. That is why we have to be full and not semi-detached members of the Community.

The positive developments are reflected in Maastricht and in other ways. Every citizen will have the right to petition the European Parliament and seek redress for maladministration through the ombudsman of the Parliament. Certain common electoral rights will be available. The right conferred on people by the European Court of Justice to be able to bring actions to correct breaches of Community directives and regulations by member states was established in the Francovitch case. There is a recognition, which is disliked by her; namely, that the court is the guardian of the treaty and it has done a good job in that regard.

So far as questions of sovereignty are concerned, one could not help feeling when listening to the noble Baroness that it was not the sovereignty of the people that she was concerned about, but the sovereignty as a former Prime Minister that she sought to enjoy in this country. She and others distort the concept of sovereignty. It is a fictional approach. It invents a sovereignty that no longer exists. This island is not in all respects an island any more. We have interdependence in trade, defence and foreign policy which is crucial to our political existence. The British courts are subordinate to the European Court of Justice.

The noble Baroness is a lawyer. She knew that. Today she complains about it. She helped to sign a treaty that did so much to qualify that very sovereignty and other ideas of which she speaks. To take a single example of what she signed up to, one has only to look at Article 118B: The Commission shall endeavour to develop the dialogue between management and labour at European level which could, if the two sides consider it desirable, lead to relations based on agreement". The very concept of consensuality to which she objected so strongly in government was something that she then subscribed to.

Then there is the pejorative use of the term "Brussels", frequently used by the press but also by politicians, which conjures up a picture of a monolithic leviathan controlling all aspects of everyday life in Europe—quite an achievement, I may say, for a bureaucracy of about 17,000 people, which is about the size of the Wandsworth borough in London.

I turn to the question of the opt-outs--the "game, set and match" notion of the Prime Minister, a true example of political astigmatism on a grand scale. Far from "game, set and match", I believe that the opt-outs are dangerously injurious to the interests of this country. They marginalise us in decisions which will vitally affect the growth of the Community. We shall lose whatever prospects we might otherwise have had of London becoming the base of the European Central Bank. We shall effectively be excluded from deliberations affecting the very issues of the common currency and the European monetary union which have concerned a number of noble Lords tonight. As my noble friend said at the very beginning of the debate, who can argue that we can be isolated miraculously from the effects of these conceptions?

As far as the Social Chapter opt-out is concerned, here again Britain will have no say. Governments, companies, trade unions and individuals in other member states will be able to have recourse to the European Court of Justice. It is not at all unlikely that litigation could arise in this country which will place us in a very difficult position. Eleven member states will be free, as a result of our voluntary exclusion, to develop a common communautaire social policy, establishing a framework for labour relations and social conditions which may be disparate from our own experience, but we shall have no hand in making any decisions about that.

I wonder what all the fuss is really about. Is the Social Chapter so radical? It is about equality for women; rights for ethnic minority communities; maternity benefits; maximum working time; annual holiday entitlement; rights for 3 million unemployed people; health and safety at work; protection of children and adults from exploitation at work; improved integration of people with disabilities. For us those are issues of principle. We wholly reject the policy which leads to the sort of advertisements about which my noble friend was talking before, which appeared in Germany and which sought to solicit investment in Britain on the basis that social charges and employment protection are significantly worse here than they are in Germany. We reject the idea of opt-out as barren, negative and harmful. We are not alone in that respect. The present President of the Board of Trade, in 1989 in an article in The Times, said: Our absence can only permit the self-interest of other nations. We paid a heavy price when others designed the CAP. It would be unforgivable to repeat that mistake in industrial and financial policies. The same argument applies to the social charter". That was from the President of the Board of Trade. We know that the former Prime Minister, Mr. Heath, accepts that view, too. We unhesitatingly support the Social Charter. We believe that the Bill as amended is better than it was. We shall seek to improve it further without endangering the question of ratification. We want to strengthen the idea of community—a strong, effective and attractive Community which will be capable of facing so many of the challenges that lie ahead.

Further political integration, which in my view is desirable, must be justified so far as national electorates are concerned. Recent uncertainties mean that we cannot take anything for granted. That is why Maastricht, stressing the important issue of accountability, needs to be taken further, not least as the European Community widens and indeed deepens its commitments.

I believe that what we have done to improve the Bill is something for which we should be applauded. I hope that the Minister will do that in his response.

Lord Pearson of Rannoch

My Lords, before the noble Lord sits down, in the absence of my noble friend Lady Thatcher I wonder whether I could refer him again to Article 1 18B, which he criticised her for signing. That article does indeed say: The Commission shall endeavour to develop the dialogue between management and labour at European level which could, if the two sides consider it desirable, lead to relations based on agreement". I want to ask the noble Lord whether he is putting that article in the same category as the recent directives on young people at work and works councils, to which this Government object, and even perhaps to the acquired rights directive. I do not think that that sentence is in the same category at all.

Lord Clinton-Davis

My Lords, I cannot take very long to deal with that point, but it was an obligation. The word "shall" is used. The point I made was that the noble Baroness, during her whole period in government, objected to the consensual nature that is implicit in the article in relations between management and labour. I believe that what is set out here was essentially based on that consensual element. It is remarkable that the article went on to say: if the two sides consider it desirable, lead to relations based on agreement". I do not know whether the noble Lord objects to that. I certainly do not. I believe that it was necessary to build on it. But I do not want to take up further time now.

1.17 a.m.

The Minister of State, Department of Transport (The Earl of Caithness)

My Lords, we have indeed been extremely privileged to take part in this quite fascinating debate today. It has shown the House at its very best and the quality of speeches has been immense. It has been a debate that everybody in the country should read. My mind went back to 1972 when I sat on the Cross-Benches and we were debating whether to join the European Community. My noble friend Lord Gray was persuaded by the good arguments that we should stay out; though highly sceptical, I was persuaded by the better arguments that we should be in. I think that the better of the arguments today has been that we should sign the Maastricht Treaty.

An abiding memory of today's debate will be the noble Lord, Lord Richard, looking absolutely steadfastly straight ahead and trying to portray that in fact the Labour Party was united on Europe. If he had had wing mirrors on the Dispatch Box he would not have seen any nods of the head. He would have seen but shakes of the head. In fact, he would have had as much support behind him then as he has now. He will recall that at Third Reading in another place the Leader of his party gave that great rallying cry, giving a great demonstration of leadership, "Abstain, fellow MPs, abstain". Yet four voted for and 66 voted against; 25 per cent. of the party defied the Leader's instructions.

Lord Richard

My Lords, perhaps the noble Earl will allow me to ask whether or not the Government want our support on the Bill.

The Earl of Caithness

My Lords, I always welcome the support of the noble Lord, Lord Richard, as he knows, but it was only right to put what he said in context. Perhaps he does not like that.

It is now over a year since the Treaty on European Union was signed at Maastricht. Debate has been intense, both in this country and in other parts of the Community. That is clearly as it should be, given the important issues raised by the treaty. Much has happened in Europe during that time. The single market is open. Enlargement negotiations have begun and the Community is pressing forward with deeper relations with the emerging democracies of Eastern and Central Europe. The Edinburgh European Council was the highlight of a successful UK presidency and included a milestone agreement settling the Community's finances until the end of the century.

All those achievements show the influence that we have in the Community—influence that we shall continue to build on when the treaty is ratified, and influence that we must not lose. As my noble friend Lord Hayhoe said, it is worth reminding ourselves of the Government's careful preparation before the treaty was signed. The issues received much more detailed attention both in Parliament and in the country before the Maastricht European Council than in other member states.

My right honourable friend the Prime Minister went to Maastricht having fully exposed his negotiating objectives to Parliament, and returned having achieved those objectives. As my noble friend Lord Cockfield reminded us, the treaty that was signed was not the high point of the centralising and federalising drive; others pushed for more. But it was the good work of my noble friend Lady Thatcher and my right honourable friend the Prime Minister that brought back a treaty that was much more realistic and suited to Britain's needs.

Just as your Lordships warmly endorsed the agreement when we debated it on 18th December 1991, I am confident that your Lordships will want to put us in a position to ratify the treaty as soon as practicable. What about discussion following the signing of the treaty? Parliamentary scrutiny in the United Kingdom has already taken over three times as long as the next member state. It may be that by the time we finish our discussions our procedures will have taken as long as all other member states put together. As the noble Lord, Lord Armstrong of Ilminster, said, we should bring that to a conclusion as soon as possible within the usual procedures of this House.

As I know that my noble friend Lady Chalker will want to respond tomorrow on many topics which your Lordships have raised, I intend to concentrate on the financial and economic aspects of the treaty, and also to answer some questions. Those aspects fall into two main areas: improvements in financial management and economic and monetary union.

An aspect of the treaty which has so far only received attention from my noble friend Lord Pearson of Rannoch is the improvements we secured on the Community's financial management and accountability arrangements. However, I know that that is quite rightly an issue of concern to a number of your Lordships. As a result of UK pressure, notably that of your Lordships, Maastricht marks the beginning of a sea change in attitudes to fraud. The treaty will reinforce the new political will to tackle fraud against the Community Budget; fraud against the Community taxpayer. However, having recently discussed those issues at length, I recognise that the House feels that more still needs to be done.

Therefore I turn to economic and monetary union. I intend to highlight the main features in the Government's approach because of their importance. But it may be helpful if I first remind your Lordships of the history of economic and monetary union in Europe. It is a long history. The noble Lord, Lord Ezra, mentioned it in detail so I have trimmed my remarks.

The Maastricht Treaty is far from being the first time that the idea of a single currency has been on the Community's agenda. It is worth recalling, particularly for the noble Lord, Lord Brooks of Tremorfa, who sadly is not in his place —I hoped that he would be because he seems to have forgotten—that in 1972 an agreement between heads of state and governments of existing and future member states, including the UK, agreed a timetable for full monetary union by 1980. We all knew about it because we agreed to it before we joined. We know now that it did not happen as planned, but the idea did not go away.

In January 1979 the European monetary system was created and most Community countries linked their currencies through the EMS to the ERM. This was designed at the outset as a means of making a zone of monetary stability. My noble friend Lady Thatcher quoted the preamble to Maastricht: a new stage in the process of creating an ever closer Union". Is that any more sinister than the Single European Act, which begins with a joint will to transform relations as a whole among their states into a European union? As the noble and learned Lord, Lord Wilberforce, reminded us, the Single European Act uses the word "union" more than once. Indeed, the title above Article 102a in the present treaty, as amended by the Single European Act, reads: Co-operation in Economic and Monetary Policy (Economic and Monetary Union)". But there is nothing new about the economic policy co-operation among member states. The Treaty of Rome required member states, to co-ordinate their economic policies", and to treat, policy with regard to rates of exchange as a matter of common concern". In 1974 the Council adopted a decision on economic convergence that provided for a heavier and more intense process of economic policy co-ordination than is contained in the Maastricht Treaty. The 1974 decision was replaced by a further decision on economic convergence in March 1990. This was one of the main texts establishing the first stage of EMU. And it contains, to a very large extent, the same arrangements for multilateral surveillance and co-ordination of economic policies as are now in the treaty. I put it to the House that there are three essential points to remember: the changes in the Maastricht Treaty do not represent a sea-change in economic policy co-operation; in both stages 2 and 3 of EMU, prime responsibility for economic policy remains firmly in national hands; and our present responsibility for monetary policy remains unchanged during stage 2 unless and until we decide to participate in stage 3.

The Government's policy on EMU is well known. It is based on three fundamental principles. Although the noble Lord, Lord Cobbold, spelt out some of its advantages, we do not believe that the present Community is ready for a single monetary policy and currency. Indeed my noble friend Lord Harding of Petherton felt that some member states would never be ready. We do not believe that we should rush into a rigid timetable for a single monetary policy some time in the future. For many of the reasons mentioned by my noble friend Lord Skidelsky, it is premature to decide on any timetable now. But equally we do not want to take a decision now which would once and for all cut ourselves off from developments with major implications for the economic and financial interests of this country. That is why we have been fully involved in the negotiations which led to the Maastricht Treaty and, contrary to what the noble Lord, Lord Clinton-Davis, implied, it is why we will continue to play a full part in stage 2. But, and reflecting some of the concerns mentioned by my noble friend Lord Ashburton, we negotiated the UK protocol—our opt-out clause.

The UK protocol provides full protection of our position. It explicitly allows us to take a further decision, nearer the time, on whether or not moving to the third stage of EMU is in our best interests. That decision, which is more important than anything in the present Bill, can only be taken in the light of all the circumstances at the time. And, as my noble friend Lord Donegal] reminded us and the Bill makes clear, Parliament will be fully involved in that decision.

I am aware of the argument that the UK protocol is effectively irrelevant because politically we shall be unable to avoid joining if enough other member states appear ready to move to stage 3. The noble Lord, Lord Richard, ran the argument that once the momentum for a single currency is sufficiently strong we shall be swept along and the views of Parliament will be swept aside. I have to disagree most forcefully with him. I believe that to be nonsense.

In fact, as in law, we have a real choice. In law our position is absolutely clear. The Bill explicitly requires a full Act of Parliament before we can notify the Council that we wish to participate in stage 3. In reaching that decision, Parliament will obviously take account of all relevant factors, both political and economic. The treaty is unambiguous. If we decide not to participate, we shall be exempt from the full range of stage 3 provisions listed in the UK protocol.

The Government's consistent approach has been to play a full role in preparing for EMU to ensure that the agreements reached are soundly based and workable. At the same time we have preserved our flexibility to decide, in the light of circumstances at the time, whether to join others in Stage 3. If we were to opt out now we would not only lose our influence in the Council but—and I put this to my noble friend Lord Parkinson, whose maiden speech we were privileged to hear—we would close off options unnecessarily.

Because there are serious drawbacks in joining in monetary union—and here I am glad to have the support of the noble Lord, Lord Bridges—we pressed for demanding convergence criteria to be incorporated in the treaty. These criteria are based on the same fundamentals of free markets, low inflation and stable monetary conditions that form the basis of our own anti-inflationary economic strategy. Again, I was pleased to note what the noble Lord, Lord Ezra, had to say on the question of low inflation and stable monetary conditions. They are valid whether or not we take part in a monetary union.

So let me make it absolutely clear. We are not today deciding whether to join a single currency. I agree with my noble friend Lord Carrington that in the event of the Government proposing a move to Stage 3 we will need to be sure that we and the rest of the Community are ready. Only then will we be sure that we are on the right train and going in the right direction.

I turn briefly to subsidiarity. This whole question is a powerful expression of a new purpose and intention of the Maastricht treaty. I welcome what my noble friend Lady Perry of Southwark had to say. It is through subsidiarity that we can take into account the concerns of those from Muckle Flugga to Crete. Article 3(b) provides a specific treaty base and so gives the principle firm, legal footing. The detailed guidelines and procedures adopted at the Edinburgh European Council outlines how subsidiarity will in practice be applied. The Commission has said that from now on national action should be the rule and Community legislation the exception.

Furthermore, a comprehensive report will be made to the Council this December identifying legislation which could be dropped. Of course, I shall look into what my noble friend Lord Buxton said about lorries. What I can do is assure my noble friend just what an important part subsidiarity has already played in the transport sector. My right honourable friend John MacGregor, the Secretary of State for Transport, is at the moment at the Transport Council and I know that many of the proposals that were due to come forward to the June council have been amended because of subsidiarity. It is in fact already working.

I put it to my noble friend Lord Pearson and the noble Lord, Lord Palmer: would they actually prefer the present situation where there is no subsidiarity and no lever to check on what the Commission put forward, or would they prefer the Maastricht Treaty when at long last it does give Ministers acting in the Council a form of words and a positive weapon with which to try to pull back some of the things which have gone on in the past? I believe that if noble Lords really do consider that matter there is no question but that the provisions in the Maastricht Treaty are of great benefit to Ministers acting on behalf of Britain in the Council of Europe.

The campaign against Maastricht thrives on misrepresentation and it was my noble friend Lord Buxton who mentioned one. He said that the Army in Port Stanley had to use imported meat because the local abattoirs do not meet EC standards. That of course is rubbish. The Falkland Islands are not within the territorial scope of the EC treaties. In particular, EC meat hygiene rules do not apply there. It is in fact MoD policy which is in force and that is to supply service personnel overseas with food on an equivalent standard to that which they receive here. My noble friend might query that, but he must not query through the European Community. He must query it direct to the United Kingdom.

I turn to the important question of political union. I found that the discussions we have had this evening very revealing. I have known for many years that the noble Lord, Lord Jay, has been against the whole of the Community—against the Treaty of Rome. I was not so sure that that was the position of my noble friends Lord Pearson of Rannoch and Lord Beloff. What has clearly come out—and I am grateful to my noble friend Lord Pearson for his honesty—is that he is not just against the Treaty of Maastricht; he is against the Single European Act. I hope that he will make clear where he stands on the Treaty of Rome as well because that is essential if your Lordships are to consider this matter. We need to be absolutely clear whether it is the Treaty of Maastricht that is opposed or the whole of the Treaty of Rome as amended by the Single European Act.

Let us look at the situation of abandoning Maastricht and continuing with the status quo. It is not a feasible option to abandon Maastricht and to proceed as before on the basis of the Treaty of Rome as amended by the Single European Act as if nothing had happened. It is now evident that some of those opposed to the treaty do not want that situation; they want to go beyond it. The Community is not frozen in time, but is an evolving process. Nearly all our partners have already ratified the treaty. If it could not enter into force, they would not quietly abandon its objectives. That would, indeed, frustrate the question of enlargement, which was raised by the noble Lord, Lord Jenkins of Hillhead and the noble Baroness, Lady Williams of Crosby. My noble friend Lord Prentice was right that it would condemn the whole Community to a long period of introspection and in-fighting when Europe needs to be outward-looking.

Above all, I put it to the House that it would marginalise the United Kingdom, reducing our influence, our ability to shape our future and our prosperity. The noble Lord, Lord Weidenfeld, said that it would put at risk London's position as a financial centre and the United Kingdom's attractiveness to Japanese and US investment. Let us not forget, as my noble friend the Lord Privy Seal reminded us at the beginning of the debate, that in 1991 we received 41 per cent. of all Japanese and 36 per cent. of American investment in the EC. All my discussions in the Far East when I was Minister of State in the Foreign Office convinced me, just as they seem to have convinced my noble friend Lord Harmsworth that my noble friend Lord Sharp of Grimsdyke is wrong and my noble friend Lord Pym is right: we need to be in Europe in order to maintain the importance of London and the importance of that inward investment.

I turn to a further implication of not signing up for Maastricht, the influence on GATT. I agree with all those who say that this must be signed as soon as possible, but it is without question that we have been at the forefront in Europe in pressing for an early agreement to GATT. I do not believe that if we had not been within Europe we would have had the influence that we have had, and I do not believe that the Community would be as close to signing as it is now.

Let there be no illusions about the choice that my right honourable friend the Prime Minister faced at Maastricht and the choice that is now before Parliament. The Government have never tried to present the treaty as perfect, just as the Treaty of Rome, the Single European Act and other treaty changes have their shortcomings. However, we believe, that the treaty on offer at Maastricht was the best possible deal for Britain. The choice we face goes wider than simply whether or not to accept the Maastricht Treaty—it affects the whole future of our relations with Europe and our standing in the world.

Only with the treaty ratified can the Community turn to the next chapter in its development, a chapter which will be dominated by enlargement negotiations with the EFTA countries and deepening relations with Eastern Europe and the former Soviet Union. These are objectives which have long been UK priorities. They are now the Community's priorities. We are shaping the debate, at the centre of the argument. These are issues which could lead to fundamental changes in the structure of the Community, fundamental changes in the politics and the future stability of Europe. This Bill opens the way to that future and the UK's rightful place within it. I commend it to the House.

Lord Tebbit

My Lords, before my noble friend sits down, I wonder whether he will accept my apologies, but as regards what he said about monetary union, I missed or misunderstood somehow whether or not Her Majesty's Government are in favour of the creation of a single currency for the other members of the Community. He seemed to leave that unclear. Are we in favour of it in principle or not?

The Earl of Caithness

My Lords, clearly that is a decision for the other member states. They do not have the benefit of the opt-out clause that we have. That only goes to proves how sensible my right honourable friends the Prime Minister and the Chancellor of the Exchequer were in obtaining that opt-out clause. It might not suit us, but if they want to go down that road, that is a matter for them.

The Lord Chancellor

My Lords, I beg to move that the debate be adjourned to tomorrow.

Moved accordingly, and, on Question, Motion agreed to.

House adjourned at nineteen minutes before two o'clock.