European Communities (Amendment) Bill

HL Deb 08 June 1993 vol 546 cc710-920

11.58 a.m.

Second Reading debate resumed.

The Lord Chancellor (Lord Mackay of Clashfern)

My Lords, during yesterday and part of today we have listened to a most interesting debate in connection with the Second Reading of this Bill. Included in the privilege was hearing my noble friend Lord Parkinson deliver his maiden speech. Having worked closely with him in government, I expected a very fine speech and that expectation was fully fulfilled.

The Treaty of Rome committed the Community's founders to building "an ever closer union". In 1986, the commitment was reaffirmed in the Single European Act. It talked of the will: to transform relations as a whole [among member states] into a European Union". It is the Government's view that the Maastricht Treaty is a logical extension of that process. It is not, however, a process which this Government expect or intend to lead towards a European superstate. It is a development of existing forms of co-operation, both within the Community legal structure and outside it, designed to meet the current needs and aspirations of member states. In the 18 months of negotiations leading up to Maastricht others put forward proposals that would have led to all areas coming under the Community and the establishment of an entity more closely resembling a superstate. The Government successfully resisted these proposals and the pillared structure was established instead.

Thus, the treaty represents a further stage in the process of European integration. It is a unique construct and one used to encompass all the different forms of co-operation under Maastricht. By this I mean the inter-governmental co-operation under the common foreign and security policy and the justice and home affairs pillars, as well as the co-operation between member states within the existing Community—or more strictly three communities: the iron and steel community, the economic community and EURATOM. This wider union—the Community and these two pillars—does not have an international legal personality; it operates through its component parts. Thus it will continue to be the Community (which does enjoy legal personality under Article 210 of the Treaty of Rome) that concludes international agreements—for example, on trade—not the Union. In other areas, however, notably common foreign and security policy and justice and home affairs, it will be the member states that act and conclude any treaties that arise. In areas not covered by the treaties, member states remain free to conclude their own treaties, for example on arms control. Thus it is not true to assert that the Community or the Union have all the attributes of statehood. Their powers are limited and member states retain their own powers in many areas.

There is clearly a tension between the vision of Europe prevalent in some of the member states and that which prevails here. As has been said many times, the Government do not see that future as being a European superstate and we have worked hard to develop a position which is acceptable in Britain. We believe that we have achieved this, but the result is, it must be acknowledged, complicated and it is important to study the exact commitments and implications of the agreement. It is not sufficient to rely on assumptions drawn from the single word "union". this could be and has been misleading, since the word is used in this context to denote the wider framework of the Community and the two pillars, to which I shall refer later.

In understanding what is meant by union here it is not particularly helpful to draw analogies. The structure of the Union as it has now emerged, like that of the Community, which is one of its components, defies comparison with other structures.

The effect of the treaty on the constitution of the United Kingdom has already been discussed more than once in your Lordships' House. It is beyond dispute that major changes in the constitution of this country were brought about by the accession of the United Kingdom to the Community through the legislative instrument passed for that purpose, the European Communities Act 1972, the Act of accession. This gave effect to certain fundamental and innovative characteristics of the Community legal system—three in particular: first, the direct effect of Community law as part of the internal law of the member states; secondly, supremacy of Community law over internal law where the two came into conflict; and, thirdly, decisions of the European Court of Justice on Community law (and only on Community law) are binding upon courts and other institutions of the member states, the working out of these decisions being a matter for the legal systems of the member states (an early illustration of the principle of subsidiarity in action).

The subsequent Community treaties have built on this framework but they have not fundamentally changed it. The structure that was approved ultimately in the referendum of 1975 remains in place. Thus, the Single European Act, given effect by the European Communities (Amendment) Act 1986 in this country, increased the competence of the Community, most notably to establish a single market. This is a major area and one which we support and from which we gain major benefits. It also, among other things, increased the scope of qualified majority voting, added a new court of first instance attached to the European Court of Justice and codified the existing practices on European political co-operation outside the framework of the Community treaties. All these changes broadened the scope of Community activity and expanded co-operation among the member states outside the Community. But none of them made a substantial constitutional change in this country.

The same is true of the Maastricht Treaty. The treaty will make many changes both within and outside the Community treaties, some of them substantial. Some of these changes —particularly common foreign and security policy—are almost entirely a matter of inter-governmental relations. But while others will produce effects within the United Kingdom they do not substantially change the constitutional position as it was established in 1972. There is development but not substantial change in these arrangements.

Thus, as with the Single European Act, the increases in competence agreed at Maastricht will widen the area of application of the existing powers in the European Communities Act but will not change them. It is a difference of degree, not of kind. The constitutional relationship of our courts to the European Court of Justice remains the same. An area where there will be an important change in our law is the franchise. Under the citizenship provisions in the treaty there will be changes in the franchise for direct elections to the European Parliament and for local elections so as to give the right to vote and to stand as a candidate to nationals of other EC countries resident here. That will be a change but not, I suggest, a major one. The basic framework of Community law and its relationship to the law of this country will not change as a result of this or any other change brought about under the Maastricht Treaty; nor—and I touch on this again later —will the relationship between our Monarch and her subjects.

The Government have not pretended, and will not pretend, that the changes brought about by the Maastricht Treaty will be insignificant or of little effect. It may be a question of judgment as to how much importance they have. The noble Lord, Lord Cockfield, was inclined to think that perhaps they were not of major importance. What I hope I have shown, however, is that talk of major change in this country's constitutional law as a result of the treaty is simply wrong. I was heartened to hear yesterday a strong endorsement of this view from my noble and learned friend Lord Wilberforce, whose knowledge and experience in this area command universal respect.

I think it is right that I should now dwell on the principle of subsidiarity and explain as best I can what is a complicated safeguard but one that lies at the heart of the British position in relation to the development of the Community at Maastricht and beyond. The principle of subsidiarity is one of the key innovations of the Maastricht Treaty. Although not new, the principle will for the first time be given treaty form. As its low number indicates, Article 3b on subsidiarity will be inserted at the head of the Treaty of Rome. This part of the Maastricht Treaty is, of course, a textual amendment on the Treaty of Rome. It contains three elements. In the first paragraph an absolute limit on Community action is established, to answer the question: can the Community act? In the second paragraph there is a rule to answer the question: should the Community act? This paragraph applies to areas that do not fall within the Community's exclusive competence. And in the third paragraph a rule is set out to answer the question: what should be the nature or level of detail of the Community's action? This applies to any action within the Community's competence.

I understood the noble Lord, Lord Jay, to suggest yesterday that the latter parts of the article could not apply to areas within the exclusive competence of the Community. But I regret to say that he stopped reading before he read the whole of the article. That, of course, is something that one ought not to do if one is intending to give the full effect of an instrument of that kind. My noble friend Lord Beloff indicated that only those who spoke against the treaty referred to its terms. I seek to avoid that stricture also.

How will this work in practice? The first paragraph makes clear that there is an absolute limit on Community action. The second paragraph then establishes a rule that the Community shall act only if the objectives of the proposed action cannot be sufficiently achieved by the member states and can therefore be better achieved by the Community. The onus is on those wanting Community legislation to show that its object cannot be achieved by the member states acting individually or in co-operation.

The third paragraph deals with the nature or level of detail of Community action in the situation where the need for such action has been established either because the matter is within an area of exclusive Community competence or because the tests in the second paragraph have been fulfilled. I stress again, as I have done before, that this applies to any action of the Community in both areas. Under the subsidiarity principle, the lightest form of action which will achieve the desired objective should be chosen. The principle requires that the Community only go into the degree of detail necessary to achieve the objective—not a regulation if a directive would suffice; not a detailed directive if a framework directive will do. Thus, rules should be kept to the minimum possible, leaving individual member states to go further only if they wish to do so.

The principle of subsidiarity has been criticised as being vague and unenforceable. Our courts are well familiar with the application of concepts which are vague in themselves but very useful for determining disputes. For example, the common law has used with great effect the concept of the "reasonable man". I believe that anyone here who is asked to define the characteristics of that interesting gentleman would be hard put to it to do so.

The article is part of the treaty now, if Maastricht is approved, and the Court of Justice will be required under Article 164 of the Treaty of Rome to: ensure that in the interpretation and application of this Treaty, the law is observed". So that is enshrined in the law if Maastricht is approved and the Court of Justice will have an obligation to see that it is enforced on application being made to it. As my noble friend the Lord Privy Seal indicated, the principle of subsidiarity is already being put into effect at the political level; but at the legal level it will come into effect only when the treaty is ratified.

In this House we often hear criticisms of particular aspects of the Community. Some were made by my noble friend Lord Pearson of Rannoch in the early hours of this morning and, for example, we have often heard about Community fraud. One of the principles that we have to remember is that we, as a nation, are committed to a set of binding agreements. We have always sought fully to honour those agreements. Therefore, if a defect occurs in an agreement which we have entered of a binding character, the only way to deal with that difficulty is by securing a new agreement which remedies the defect. Therefore, in order to deal with fraud some agreement is required which increases the efficiency of the Community institutions to deal with it; hence the elevation of the Court of Auditors to an institution with an added status, asked for by the British Government and included in Maastricht. We also hear that the rules of the Community are observed in this country but not in other countries; hence the provision of the treaty, again asked for by the British Government, that the Court of Justice should have power if necessary to enforce its judgments.

I should now like to turn to another aspect of the treaty; namely, citizenship of the Union. Given the lack of understanding about the Union itself, it is not surprising that citizenship of the Union has also given rise to a degree of confusion. Let me try to explain. Union citizenship does not override national citizenship. On the contrary, it is dependent upon it: one cannot be a citizen of the Union without being a citizen of a member state. The noble Lord, Lord Thomson of Monifieth, put it well when, on 17th February, he expressed sentiments which I wholeheartedly echo: By nationality I am a Scot. I am a proud to he a British subject. By conviction I am a citizen of Europe and I see no conflict at all between those three propositions".—[Official Report, 17/2/93; col. 1201.] It is also important to remember that there is a distinction between the concepts of citizenship and of allegiance. We owe allegiance to Her Majesty the Queen. We will continue to do so when we are citizens of the Union. Citizenship of the Union differs from national citizenship, particularly in a monarchy like that of the United Kingdom. Here the citizen is also a subject. Maastricht will not make us subject to anyone other than Her Majesty and we shall not owe any allegiance to the European Union.

Some noble Lords have expressed concern that the Maastricht Treaty will affect Her Majesty's position. I can reassure them that the treaty in no way alters the Monarch's constitutional position in the United Kingdom. The concept of Union citizenship is benign. It confers rights of petition, appeal to an ombudsman and consular protection abroad. It confirms (subject to existing limitations such as those based on public security) the rights of free movement of residence currently in the treaty and legislation made under it. Importantly, it also gives rights to a European Community national resident in another member state, as I have mentioned already, and the rights to vote and stand as a candidate in local and European Parliament elections. I regard that as an important extension of democracy.

Some of your Lordships have asked whether Her Majesty would herself be entitled to exercise the rights conferred upon citizens of the Union. The answer is yes. But it would be a matter for Her Majesty's choice, on the advice of her Ministers, whether in any particular situation she did so.

Article 8 makes a reference to duties. But these are duties incumbent upon nationals and residents of the United Kingdom under the treaty. The treaty includes of course the Treaty of Rome, so that the duties in question in Article 8 are the duties which have been incumbent upon nationals and residents of the United Kingdom, as they have been since we joined the Community in 1972. In effect, that duty is to obey the laws of the Community so far as they have direct effect in national law and are binding on individuals.

The Maastricht Treaty represents a step towards a recognition that, as the Community develops—as it enlarges—it needs to become more responsive to the particular needs of a disparate membership. The Community was joined by the United Kingdom in the belief that the long-term interests of the United Kingdom and the long-term interests of the other member states of the Community were to be served by one another. There are short-term interests of a member state, such as the United Kingdom, which may appear to conflict with that longer-term aim. It must be the objective of leadership to convince citizens of the member states, including the United Kingdom, that the short-term interests must be viewed in the light of the longer term. That is basically why we are in the European Community.

As I said, when defects are perceived in the existing binding arrangements, the only way in which those can be remedied is by further binding arrangements. Those binding arrangements can only be secured by negotiation. Having agreed to a number of treaties, we cannot suddenly say, "Well, we do not like this part. We do not like the way that it is being operated and we are going to change it". We have to get our partners to agree to that change by a binding agreement. They have interests that they want to serve. They have aims that they want to fulfil. One has to seek by negotiation to accommodate them as best one can. I have illustrated two that are in the interests of the United Kingdom and are solutions to problems that have often been posed here.

The Treaty of Maastricht as a whole is, in my submission to your Lordships, a logical development of our membership of the Community, ultimately approved by the referendum in 1975, and is a development building on what was then agreed. It also takes account of matters that have occurred since then and seeks to accommodate those in a way that suits the concept of the development of the Community which the United Kingdom espouses.

For those reasons I very heartily endorse the Motion that was put to your Lordships by my noble friend the Lord Privy Seal: that your Lordships should agree to the Second Reading of the Bill. Just for clarity, I should perhaps say that the Government's view is that the Bill should be approved as it is—that is to say, without amendment and therefore including the amendments which were agreed in the other place after the introduction of the Bill, to which the noble Lord, Lord Richard, referred yesterday.

12.20 p.m.

Baroness Blackstone

My Lords, I hope that the noble and learned Lord the Lord Chancellor will forgive me if I do not cover the legal aspects of the Maastricht Treaty, grateful as I am to him for explaining them. In spite of having a good legal name, I am not a lawyer. I am therefore not qualified to debate those matters. Instead I want to focus on other aspects of the Bill and the treaty and to reinforce some of the points made by my noble friend Lord Richard in opening the debate for the Opposition yesterday.

One of the most unfortunate aspects of the discussion of the treaty has been that the ferocity of the debate has prevented balanced consideration of the treaty's strengths and weaknesses. If one is for it, it must be perfect; the indispensable foundation of a rosy European future. If one is against it, it must be fatally flawed; a threat to civilisation as we know it. We heard some of that in yesterday's debate and no doubt we shall hear more today.

That polarisation does us no credit. The treaty is much too important to be considered in such unthinking terms of black and white. Those who urge that we reject the treaty must include in their arguments what we would lose by doing so. Those who accept the treaty should be equally clear in regard to its flaws as well as its benefits. Its shortcomings must be addressed in the review planned for 1996 and, of course, it should be kept continuously under review as weaknesses become evident and changing circumstances require new approaches.

On balance the treaty is good for Britain and should be accepted now. It is an important step towards building a better structure for economic policy in Europe. It is an important step towards building a political structure which can be effectively accountable to the people of Europe. To reject the treaty would be a grave error, wrecking years of European co-operation. It is naive to believe that rejection could be the precursor to renegotiation. It would not. Instead it would throw Europe into disarray and sacrifice much of the progress towards co-operation which the Labour Party believes is vital to our search for peace and prosperity.

The assessment of the impact of the treaty has been hampered by the fact that the Government appear to have no policy of their own on the main elements of the treaty; they simply react to the policies of others. In doing so their reactions are guided not by any principle of economics, nor by any vision of Europe's future, but by what needs to be done to hold a deeply divided Conservative Party together.

When the Minister sums up perhaps she will tell us exactly what is the Government's monetary policy for Europe. We all know of the "opt-out" clause on monetary union of which the Prime Minister was so proud and the main effect of which is that there is now no chance of the European Central Bank being sited in London. But what is the Government's design for a European monetary future? Are they, or are they not, in favour of a single currency? What is the Government's social policy for Europe? We know that Ministers are against the social chapter and against improved working conditions for women and part-timers. But what are they for? Exactly how do the Government see the cost of European restructuring being borne? How do they believe that social dumping should be prevented? Perhaps the Minister will answer that question also.

Finally, what is the Government's policy for the political future of Europe? How would they overcome the democratic deficit at the centre of decision making? Alas, the Government have no vision of Europe. In all those areas there is no policy. Instead their position appears to be to hang on and hope for the best.

However, on one matter the Government have our support. They are right to reject calls for a referendum on Maastricht. We live in a parliamentary democracy and Parliament is the right place to scrutinise a treaty as complex as this. That is not just our view; it is the view of nine other member states which, like us, are ratifying the treaty through their parliamentary procedures. I need hardly remind your Lordships that there has already been a referendum on our membership of the European Community and it decided by two to one in favour.

Lord Pearson of Rannoch

My Lords, perhaps the noble Baroness will allow me to intervene. That was a point made on several occasions yesterday. I do not believe that there was a referendum in regard to our membership of the European Community. This Bill and this treaty drop the word "economic" from the European Economic Community. There was a referendum about our joining the European Common Market, which is a very different thing.

Baroness Blackstone

My Lords, I must reject what the noble Lord, Lord Pearson of Rannoch, says. We had a referendum on our involvement in a more integrated Europe. Unfortunately, it did not stop people like the noble Lord, Lord Pearson of Rannoch, campaigning for withdrawal and renewing their campaign soon after the referendum.

The most cogent reasons for rejecting calls for a referendum are, first, that the issues are too complex to be resolved by a simple "yes/no" question. Secondly, referenda on such complex questions frequently end up being about something else. In both Denmark and France the vote was as much about whether or not the electorate wished to support unpopular governments which had been in power for a long time as it was about what appeared on the ballot paper.

Dare I suggest that we too have a Government who have been in power for a long time and who are deeply unpopular? If the Government were to launch a referendum in favour of motherhood and apple pie, they would probably lose it. A referendum would lead to a long drawn-out, costly campaign. And because of the unpredictability of the consequences of a possible "No" vote, it would seriously damage any chance we have of economic recovery. In any case, is it not a strange paradox that those people who are asking Parliament to abdicate its sovereignty to a referendum result are the same people who are most concerned about sharing parliamentary sovereignty?

Let me turn to another aspect of democracy—the operation of European Community institutions. The Labour Party welcomes the changes in the treaty, which will lead to greater democratisation. Those changes are by no means perfect and in some respects they do not go far enough. For example, the treaty has failed to do much about the secrecy and unaccountability of the Council of Ministers, which wields the ultimate power in the European Community. If the Council of Ministers and the Commission are to be more accountable, the European Parliament must be strengthened. The treaty is right to give the Parliament some power to initiate legislation and to introduce a negative assent procedure although, regrettably, the machinery involved is over-complex and clumsy.

But the fact that Maastricht increases the European Parliament's powers of inquiry, that it provides it with some power to scrutinise the budget, and that it will approve the appointment of the Commission, all enhance the role of Europe's only directly-elected body and thereby increase democratic accountability. Unfortunately, the UK Government have a miserable record on the reform of Community institutions. They have obstructed rather than aided such reform. In 1996 we must hope for a more constructive approach.

Many times over the past 14 years the British Government, using their veto, have blocked progressive legislation. The introduction of qualified majority voting will prevent one government—our own—denying our citizens and the people of other EC countries the benefits of progressive legislation in areas such as the environment, transport, and equality between men and women.

Another significant democratic improvement provided by the treaty is the creation of a Committee of the Regions. That, too, was opposed by the Government, although eventually the Prime Minister was forced to cave in and give way to the good sense of our European partners, who do not share this Government's centrist ethos. The Committee of the Regions is the first formal acknowledgement of the role of local and regional centres in Europe's development and contributes to the principle of subsidiarity. Having been forced to concede, the Government then tried a different escape route. They came up with the disgraceful formula of stuffing the committee with their own political and business cronies. The defeat of the Government on that issue in another place was a victory for democracy in two senses; first, because Parliament was able to over-rule the Executive on a matter where its position was indefensible and, secondly, because it is intrinsically more democratic that a Committee of the Regions should be made up only of elected members of local authorities and should not include selected members of the Government's network of quangos.

As one of the minority of women Members of your Lordships' House, I should like to emphasise just how damaging the Government's sadly misguided opt-out of the social chapter will be for women workers in this country. Why, for example, should the gap in the pay of men and women manual workers be bigger than in any other European country? And why should part-time workers who are mainly women have to have worked for five years for the same employer before claiming unfair dismissal, when the period of entitlement for full-time workers is only two years? No other EC country discriminates against part-time workers in this way. The opt-out clause on the social chapter will mean that unfair anomalies of this kind continue to affect thousands of women workers in Britain.

Many men, too, will be denied employment rights, which will be available for their fellow workers in the other 11 countries, countries which in many cases have Conservative governments but which, unlike our Government, have taken a progressive view of the social chapter. They do not talk, as our Ministers do, in lurid language about the dire consequences of the social chapter. Instead they accept that its provisions will promote both long-term economic efficiency and social justice. They do not believe that inferior working conditions make for superior economic performance. Of course not. They realise that improvements in information for workers and more consultation, more opportunities for education and training, and equal treatment of women workers, will enhance economic performance. In moving away from commitments to modern working conditions in a modern economy, John Major and his Government are condemning British workers to second-class citizenship in Europe.

The Government's motives are clear. Ministers are seeking to gain a short-term competitive advantage over their European partners. There can be little doubt that other members of the EC are already aware that it is not in the interests of the Community for one country to operate as a cheap labour enclave with a sweat-shop economy.

The Treaty of Maastricht cannot be seen in isolation, as the noble and learned Lord the Lord Chancellor said. It is a direct development from the single market. The two treaties are interdependent. Neither makes sense without the other. While coherent argument might be made for rejecting both of them, and thus withdrawing from the European Community altogether—an argument which, though coherent, I believe to be profoundly wrong—there is no rational basis for accepting one and rejecting the other. I am sorry to see that the noble Baroness, Lady Thatcher, is not in her place. Given that the Single European Act was guillotined through another place by the government of the noble Baroness, is it not surprising that she should now be calling for a referendum and opposing the developments that derive directly from the single market, which she espoused so strongly just a few years ago?

But what that first treaty notably failed to provide was any effective framework for determining economic policy within the European-wide economic space which it created. Despite setting out consciously to create a single economy, the 1986 Act failed to create adequate institutions of economic management. Despite creating a single economy and a single market for money and capital, the 1986 Act provided no framework for the determination of monetary policy. Despite a programme for integrating markets for goods and services, and hence markets for jobs, the 1986 Act provided no framework for the co-ordination of fiscal policy. It is the great virtue of the Maastricht Treaty that it recognises the contradictions left by the Single European Act.

The importance of building that new European framework is today measured by 17 million people unemployed throughout the Community. It is measured by a Europe deep in recession, in which slow growth is undermining personal, corporate and national finances. It is measured by the impact of slow growth on the values of community, of social care, and of social peace.

Your Lordships will be aware that the Western economies as a whole have never recovered the rates of economic growth and levels of employment which they enjoyed before the Bretton Woods system of fixed exchange rates collapsed finally in 1973. The international instability which has followed imposed a powerful deflationary pressure on the West. Every country, fearing financial disruption, has pursued self-defeating conservative monetary and fiscal policies.

The creation of a single currency in Europe will not only free European countries from the deflationary curse of currency speculation, but create a framework within which co-ordinated fiscal expansion to tackle unemployment is most likely to succeed. Moreover, the creation of a single currency will overcome the economic nonsense of a monetary policy fixed by the authorities of one country being imposed on the rest of the Community for which it is entirely inappropriate. One of the greatest virtues of the treaty is that it would liberate Europe from the Bundesbank. That blinkered institution would be replaced by a bank charged with setting monetary policy in the interests of Europe as a whole.

That brings me to what I believe is a flaw in the treaty. There must be a forum in which the crucial political decisions on the balance of monetary and fiscal policy can be debated, assessed and implemented. That is why the Labour Party has consistently argued for the strengthening of ECOFIN as the political counterpart to the European Central Bank, and the focus for the co-ordination of fiscal policy. The amendment which Labour has introduced into this Bill in another place should ensure that the Government play their part in enhancing the cohesion between the central bank and ECOFIN.

The end of the cold war, the collapse of the Soviet Empire and the arrival of democratic governments in Central and Eastern Europe were all matters for celebration and seemed to signal a rosy new era in which foreign and security policies could be more positive and relaxed. The rise of nationalism, particularly in the former Yugoslavia, has shattered those hopes. From the start the way the Yugoslav question has been handled by the major countries of the EC has regrettably been little short of a fiasco. Those failures demonstrate only too clearly the need for new forms of co-operation.

I therefore welcome the proposals to build on European political co-operation with a strengthened commitment to the formation of common positions. Where the treaty has shortcomings is in the area of defence policy which is to be the responsibility of the Western European Union. The flaws relate to how the EC, WEU and NATO are to co-operate. The links are vague and ill-defined. The treaty is in places unclear and even confusing. Perhaps the Minister can tell us what are the UK Government's proposals to resolve this confusion.

I want to conclude on a positive note. The new European Community as set out in the Treaty of Maastricht provides Britain with many challenges. They are challenges to which we must rise. They are in any case ones from which we cannot escape. Britain is inextricably part of Europe, and has been now for nearly 20 years. For our young people, bringing down the barriers between the nation states of Europe is of profound importance and I believe that most of them will greatly welcome the new approaches to union citizenship embraced by the treaty. More and more they consider themselves to be not just British but also Europeans.

While I have made clear that the Maastricht Treaty is far from perfect, there is much to be enthusiastic about. Over the next years we must build on the foundations it has provided as well as deal with the shortcomings. To do that we need a government who wholeheartedly accept the facts of closer European integration rather than one who drag their feet, refuse to participate and then gracelessly accept what is forced on them as a result of co-operation and agreement among our European partners. Above all we must work for economic recovery and a peaceful solution to conflict in a Europe which is not just a market but also a community.

12.39 p.m.

Lord Thomson of Monifieth

My Lords, the noble Baroness, Lady Blackstone, who has just spoken, and the noble and learned Lord the Lord Chancellor, have both, in a welcome way, made speeches that look beyond the ratification of the Maastricht Treaty to what lies ahead for the development of the Community. The noble Baroness, Lady Blackstone, did so in the economic field, and, with great clarity, the noble and learned Lord the Lord Chancellor gave us immensely welcome guidance on the legal consequences of the Maastricht Treaty.

I welcome that forward-looking tone to the opening of the second day of this historic debate because, like many of those who spoke yesterday, I have an uncanny feeling of having been here before. I seem to have been taking part in debate about British membership of the Community for over 30 years. There have been times when it seems never-ending and as if we can never make up our minds finally about British membership.

However, I believe that that impression is in fact misleading. The truth emerged from our debate yesterday. It is that there is a minority in both Houses of Parliament who in their hearts remain sincerely opposed to British membership. As I believe the noble Earl, Lord Caithness, managed to smoke out from the noble Lord, Lord Pearson, in the early hours of this morning, the fundamental objection is not to the Treaty of Maastricht, but to the Treaty of Rome. The problem is that those who have that view can never make up their minds to be good democrats and to do what most of us have had to do in our political lives on issues on which we have held deep opinions, when time has passed and circumstances have changed, and we have had to accept the majority view.

I believe that the British people did make up their minds decisively about the basic question of membership as far back as the 1970s, during the debates on the Act when Britain acceded to the Community. That was made crystal clear in the result of the referendum in 1975. By a majority of 2:1 the British people decided that the Community was where Britain's future lay, and particularly, from my memories of that referendum, that was where the future of their children lay.

In my view the British people are not starry-eyed about the Community any more than they are about Westminster or Whitehall. As the noble Lord, Lord Carrington, said, some of the oddities which are said to come out of Brussels—and some do come out of Brussels—turn out to have come from closer at home, from Whitehall. Last night we heard from the Minister in replying that the poor people of the Falkland Islands, who were said to be having Brussels rules imposed on them in the beef that they ate, were in fact suffering from a piece of bureaucracy imposed on them by the Ministry of Defence.

So far as Parliament is concerned, the noble Lord, Lord Cockfield, showed irrefutably, in a devastating speech yesterday, that successive Conservative and Labour Governments have persuaded Parliament by massive majorities to accept the steady sharing of our economic and political sovereignty in the Community in the interests of Britain and of our neighbours in the Community. I believe that that remains the underlying reality. The noble Lord, Lord Cockfield, sent us all rushing to the Library yesterday for the Stuttgart Declaration. I confess I have never given it the study which it deserves. I shall content myself with mentioning the solemn commitment in the Single European Act signed by the noble Baroness, Lady Thatcher, in 1986 and enshrined, as the noble and learned Lord, Lord Howe, told us, in the Conservative election manifesto of 1989: on the basis of the Community Treaties to transform relations as a whole among their states into a European Union". In my book the idiosyncratic, and one might almost say schizophrenic approach to the Community by the noble Baroness, Lady Thatcher, initially served a useful purpose for Britain. I pay full credit to her for obtaining for us, by her obstinacy, a fairer budget deal as a late entrant. As her deepening hostility and lack of comprehension of the spirit of the Community became apparent, it did increasing damage to Britain's international interest. That is no doubt one reason why she sits in this House these days rather than continuing to be in another place.

When Mr. Major became Prime Minister and announced that he believed that Britain should be at the heart of Europe, that was widely welcomed across all parties in Westminster. For the first time decisive majorities in all the parties—even by the Scottish Nationalists—were all pro-Community. For the first time since entry there seemed a prospect of a positive role for Britain in the Community. Alas, Mr. Major's "heart of Europe" assertion and ambition now look rather tattered and forlorn after his long period of appeasement of the disgruntled minority of rebels in his own party. The best of them remain principled, but in my view unreconstructed, opponents of full British membership. I believe that the worst have wider political motives which sometimes make the Labour Party's militant faction seem like something out of a Sunday school.

I found it deeply humiliating that to appease those people the Prime Minister should have been ready to allow the people of Denmark to decide in practice whether it was in the British national interest to ratify the Treaty of Maastricht. For the life of me I shall never understand why the Prime Minister, who had emerged with all the authority of a general election victory last year, should not have given a disdainful Harold Macmillan shrug of the shoulders at the little local difficulty in Denmark, and, with all the authority of that election victory, proceeded to ratify the treaty last summer.

After so many months of debate in another place, Britain is now dragging her feet at the end of the ratification queue. I urge your Lordships' House to secure ratification of the treaty as speedily as possible. We all of course recognise the importance of the role of your Lordships' House in providing safeguards over another place against hasty constitutional change. But after two years of the Maastricht Treaty and 200 hours and more of Committee proceedings in another place, that can hardly be said to be the present situation.

As regards the referendum, there are many issues, of course, but I shall merely content myself with the view that it seems to me to be utterly wrong in principle that an unelected Chamber like ours should seek to impose a voting process which has been so decisively rejected as unnecessary by the elected Chamber. Once the treaty is ratified the debate should be, as the noble Baroness, Lady Blackstone, has said, about how Britain can resume her proper place as a leading player in Europe.

The vision (if that is the proper word) of the noble Baroness, Lady Thatcher, and of the noble Lord, Lord Tebbit, whom we look forward to hearing later today, is what appears to be a European free trade area stretching from Ulster to the Urals, without an economic, monetary or political union or without a sense of a civilising social dimension. Apart from other objections to it, that concept is in pure political cloud-cuckoo land. There is not the remotest possibility of converting the rest of our partners in the Community to such a concept.

For Britain there are in fact only three alternatives. One of them is now totally theoretical. It would be total withdrawal from the EC. The real choice is between being a positive participant in the shaping of the future European union or as a semi-detached critic, always grumbling on the periphery and seeking special opt-outs, seeking 10-year transitions, and so on. The former course would give us the chance to take our proper place alongside France and Germany —that historic European reconciliation—in shaping the future of Community Europe. The latter choice leaves us having to adapt in due course to policies taken by others in their interests and with scant regard for ours.

The noble Lord, Lord Carrington, spoke yesterday about the conflict between the continental conceptualists and the British pragmatists. I remember when I was going off to Brussels a very distinguished Foreign Office official (who did not in the least share my political views) told me wryly that I would learn lessons in pragmatism in Brussels that I had never dreamt of in the Fabian Society—and so it proved to be. The European Community in its methods needs both a vision and a concept to keep it going, but it is immensely pragmatic in the compromises that it makes gradually to seek to reach its goals.

On the opt-out from the social chapter, I wholly support what the noble Baroness, Lady Blackstone, has said. This is a case of the Government, not the European Community, being dogmatic. If one compares the social policy of the Treaty of Rome, as amended by the Single European Act and the social chapter that emerged during that period, with that which has emerged now by the Maastricht Treaty, one sees that there is precious little difference between them. There is certainly nothing to justify the kind of self-imposed isolation on which the Government have insisted. The Government seem in this to be espousing short-term "beggar-my-neighbour" policies disguised as doctrine.

The irony is that the Government have a perfectly good and important point about maintaining the international competitiveness of the European Community and its economy in an increasingly global economy. The President of the European Commission, Monsieur Delors, made a speech in the European Parliament the other day which might have been made by the Prime Minister of the United Kingdom. He pointed out that the Community's share of world exports has fallen from 21 per cent. to 16 per cent. since 1980, and that over the past 20 years our job creation record in the European Community has lagged a long way behind that of the Japanese and others.

That is an issue which the Government are perfectly right to raise, but the way to deal with it and the way to create an effective answer is to be there right in the inner councils of the European Community, helping to shape a civilised and sensible social element of policy for the European Community. For a nation such as Britain, with its major trade within the European single market, to be a grumbling country member of the club, opting out of major commitments, is a recipe for disaster.

Of course, the timetable for economic and monetary union has now been blown off course by the events of the past year or two, but that is par for the course for Community affairs. Will we never learn that Community timetables are designed to provide targets to aim for, to help to keep us on course and to give us the vision to keep us going rather than being set in tablets of stone on a calendar? Will we never learn that it is by opting in and not by opting out that we shall have our best influence on the way in which the Community develops?

Our dangerous new world—so different from the dangerous old world of the Cold War—requires a European Community that is a source of economic and political strength. The kind of Community that will best serve mankind in the 21st century will be one in which the provisions for intergovernmental co-operation, for a common foreign and for a common defence policy have been gradually strengthened and made more effective. I entirely agree with the noble and learned Lord the Lord Chancellor that, in effect, the Community is sui generis. As he said, there are no realistic comparisons to be made with other institutions. For my part, I think that the semantic arguments about federation and superstates are a bit of a waste of time. What is going to matter is the political will—and the political will of Britain should be a major element in trying to ensure that the European Community can have an effective foreign policy and an effective defence policy that will give us the real cutting edge that we deserve to have because of our role in the world and our experience in the past.

It is also right that there should be the new principle of subsidiarity, about which we heard with great clarity and most helpfully from the noble and learned Lord the Lord Chancellor in his opening speech. But if the European Union is to serve its citizens, it is equally important that at the highest level the democracy of the European Parliament should be enhanced. The increased role of the Members of the European Parliament in the Maastricht Treaty is welcome, but I agree with the noble Baroness, Lady Blackstone, that that does not go far enough. We in Westminster have not behaved well towards our own MEPs. I well remember when Britain first joined the Community the impact that the first British MEPs, led by the late Sir Peter Kirk, made on the European Parliament. They were a breath of fresh air and brought democratic reality into that somewhat stuffy institution. We have not built on that, and I hope that a priority task for the 1996 intergovernmental conference will be the strengthening of the democratic institutions and democratic aspects of the working of the community.

The world, particularly the former Soviet empire struggling to create free societies in the midst of national anarchy and ethnic bitterness, desperately needs more cohesion and more effective decision-making from the European Community, not less. I profoundly hope that once this long ratification trauma is behind us, the Government will be able to get a grip on their Community policies.

12.56 p.m.

Lord Simon of Glaisdale

My Lords, this debate has raised profoundly important issues on the political side going back in the tradition up to the Concert of Europe and on the other side to what is variously called "splendid isolation" or "little Englandism". Those great issues, and the economic issues which accompany them and which were so splendidly discussed by the noble Baroness, Lady Blackstone, have been matched by the authority and experience of those who have addressed your Lordships. Yesterday your Lordships heard from three former Foreign Secretaries, and one is going to follow shortly—although at the moment he has vacated his seat. When I start on that sort of enumeration, I always come up against the noble Lord, Lord Callaghan, who causes such trouble by involving one in double accounting. So I pass from that, sparing the blushes of the noble Viscount who is to follow me.

I do not propose to follow the speakers in those big issues; I want merely to concentrate on the question of the referendum, although as to that I agreed very largely with what the noble Baroness, Lady Blackstone, said. It is entirely the Government's fault if they are now met with populist clamour for a referendum. They have been warned repeatedly from all parts of your Lordships' House and elsewhere that there were some half a dozen important interrelated constitutional issues which demanded urgently the consideration of a Royal Commission on the Constitution. One of those was the referendum. The Government rather seemed to prefer to think that if they buried their head—and not only this Government, but their predecessors—sufficiently deeply in the sand not even the gale of the world would ruffle their tail feathers. If something less than the gale of the world has occurred in this debate, at any rate your Lordships have the next most powerful thing, a blast from the noble Baroness, Lady Thatcher.

I am by no means constitutionally opposed to a referendum in all circumstances, although I know that many eminent constitutional lawyers, including, I think, my noble and learned friend Lord Hailsham, are. They found themselves on the basic tenet of the British constitution that we are a parliamentary and not a plebiscitary democracy. Any referendum must be fitted into that constitutional context.

Failing guidance from a Royal Commission, it is difficult to think of circumstances more unlikely than those that arise on this treaty. It was before the electorate at a general election in which all three parties supported the treaty, although they differed in some respects as to its consequences. It received a Second Reading in the other place by a very large majority. There was a prolonged Committee stage, with a filibuster, and yet on Third Reading there was again a large majority. It is difficult to think of circumstances which render a referendum more unpropitious.

The question of a referendum is by no means as simple as it was in 1975. In 1975, the issue could be put in simple terms, and it was. Now there are no fewer than five questions which have to go before the electorate: do you want Maastricht with two opt outs? Do you want Maastricht with one opt out, but including the Social Chapter? Do you want Maastricht with one opt out, that being the Social Chapter, but going on to phase 3, which was evidently in the mind of the noble Baroness? Do you want Maastricht with both those matters that are at present opted out? Finally, do you not want Maastricht at any price? There are no fewer than five issues. It would be a recipe for muddle and confusion. So I conclude that, although I am in principle not always opposed to a referendum, this seems to me the last sort of occasion upon which we should engage in one, and also for the constitutional reason given by the noble Lord, Lord Thomson of Monifieth. It seems to me that the argument against a referendum on this issue is overwhelming.

1.4 p.m.

Viscount Whitelaw

My Lords, I am always encouraged in life when I find a lawyer who happens to believe in what I want to say. So I am immensely grateful to the noble and learned Lord, Lord Simon of Glaisdale, because he has given me some encouragement for a view that I hold for much humbler reasons, to which I shall come. My reasons for giving my fullest support to the Bill and the consequent ratification of the Maastricht Treaty, your Lordships will be pleased to hear, can be stated simply and briefly.

I am old enough to remember that short-lived saying of the 1920s about the war to end all wars. As I had lost my father in that war it had a specific meaning for me. My school and university life was dominated by the imminent danger of the next world war. My early adult life was spent fighting it. My political life has been dominated by the vital necessity to avoid another such war. Inevitably, all those facts are imprinted firmly in my memory. I accept at once the dangers of living in the past; nevertheless, experience can be a valuable guide to future action.

Two world wars in quick succession, each having their origin in Europe, rightly inspired post-war leaders to seek greater unity among their nations. At the start, I believed, in a humble way—I was not even a Member of Parliament then—that they were right. As the years have gone on, I have never changed my view. In fact, I feel more strongly than ever that the unity of Europe is very important to us all and that Britain should be a leading country in that union.

The history of European development in recent years requires no repetition. However, there has been one recurring problem. While, on the one hand, Britain has performed the role of a leading member of NATO with considerable success, our membership of the European Community has been beset by doubts and arguments. That, I believe, has made our country appear a reluctant and unsound member. It has not been altogether our fault.

Our trade links with the Commonwealth made it difficult for us to join at the beginning of the European Community. A new story, which worried me more, came from my noble friend Lord Thorneycroft whose Parliamentary Private Secretary I was many years ago. I was delighted to hear his excellent speech. He gave another reason for some of the difficulties that occurred in the early days of the Community. He also made clear how good were our efforts to join in the early 1960s under Harold Macmillan's government. Those efforts were frustrated by General de Gaulle who probably wished to keep us out of the Community basically for his own reasons.

Our successful entry in the early 1970s took place under Ted Heath's brave and determined leadership. No one can ever take away from him the bravery and determined leadership that he displayed for our country at that time. I was privileged to be the Leader of the other place then, although it did not seem to be much of a privilege bearing in mind the parliamentary battle that took place.

Of course, like all other battles when they are successful in the end, one looks back on them with some pleasure. While we were successful in the end, we still appeared to other European countries, after such a battle, to be something of a tentative member. That feeling was inevitably heightened by the referendum, called in 1975 by the noble Lord, Lord Wilson, which at that time my party opposed strongly. However, when the referendum took place, like many others in all parties, I worked for the "Yes" vote under the noble Lord, Lord Jenkins of Hillhead. His leadership was excellent. I give him every credit for it. I naturally welcomed the convincing "Yes" which we all hoped would put finally at rest the doubts about Britain's position. At the same time, I have to make it clear to your Lordships that that welcome result did not convert me to the nationwide referendum principle.

I happen to be one of the few people in history who have had the immense privilege of, first, being Leader of the other place; and, secondly, of being the Leader of your Lordships' House. Very few people can feel more proud of the two positions I have held than I do. I was also Chief Whip for my party in another place for six years, in, I believe, very different circumstances, because I was far more frightened of many of my senior Back-Benchers than they were of me. That seems to be different from what happens now.

As a result of that position, your Lordships cannot be surprised that I stick firmly to my belief in the value of parliamentary democracy as a means of taking decisions. Our parliamentary procedures, built up over generations, have stood the test of time. I am not in any way afraid of changes but I dislike intensely the idea of changing the procedures on a short-term opportune basis.

The Conservative government which came to power in 1979 under my noble friend Lady Thatcher contained my noble friend Lord Carrington, who made such an excellent speech to this House yesterday, and my noble friend Lord Howe, who subsequently was also Foreign Secretary and who again showed considerable courage in seeking to achieve European union for our country. That government negotiated initially very firmly and successfully in Britain's interest while always maintaining our position in the Community. It reflects considerable credit on the way in which my noble friend Lady Thatcher conducted her position at that time. That was true in particular of the passage of the Single European Act which she signed.

Now opponents of the Maastricht Treaty have decided to raise doubts about Britain's commitment all over again. I agree with the noble Lord, Lord Thomson, who spoke very well of one's terrible dismay that this should be happening again, with all the upset and difficulties for our position in Europe that it brings. I believe that those opponents are taking a narrow-minded view when a broad approach is required in the major interests of world peace. Europe needs Britain and Britain needs Europe as we all work together, I hope, with the United States in NATO and of course through the United Nations for the preservation of peace. That is our role in Britain.

I do not believe that it would be possible for Britain to maintain its leading role in NATO unless it was seen to be a full and determined member of the European Community. Nor do I believe that half-hearted membership of the Community, constantly accompanied by carping criticism from the sidelines will do. Some of the criticism is perfectly justified but, goodness me, one can justify criticism of all kinds of institutions which one supports and believes in. Yet that will not do, and carping criticism from the sidelines can do Britain nothing but harm.

I want to see our country taking a leading role in the future development of the European Community, giving our businessmen and traders the opportunity fully to succeed in European markets. Without Britain, Europe would be much weaker, and Britain, without its connection with Europe, would be lonely and isolated. What a sad role for our once great country in these difficult and dangerous days.

So I find myself standing absolutely firm in the view which I have consistently taken from the earliest days of Britain's connection with the European Community. I trust that this Bill will pass and that the Maastricht Treaty will be ratified with Britain seen to be firmly at the centre of Europe and firmly at the centre of the conduct of world affairs.

1.14 p.m.

Lord Callaghan of Cardiff

My Lords, it is a pleasure to follow the noble Viscount, Lord Whitelaw, on this matter. As regards subsidiarity on which he touched I have what I suppose the police would call "form" and I must therefore be a little careful. Like the noble and learned Lord, Lord Simon of Glaisdale, I have no particular constitutional revulsion against such referenda. I did not notice that any particular damage to our constitution was done in 1975. It certainly helped to solidify the Labour Party. According to Mr. Disraeli, one of the objects of a Prime Minister is to keep his party together. Therefore, I cannot take a strong view about the matter, but I am ready to go along with what was said by the noble and learned Lord and to say that on this occasion, especially as the Commons have rejected it, it is not for us to say anything different.

Yesterday's debate was largely taken up with the economic consequences of the treaty. Thanks to my noble friend Lady Blackstone and the noble Viscount, Lord Whitelaw, today we have concentrated a little more on the political aspects of the treaty. Although the consequences of the treaty lie mainly in the economic field its origins and purposes are mainly political. We should not seek to fail to defend it on those grounds. When we are deciding our attitude we need to take the political elements most seriously.

I wish to follow the noble Viscount in going back into the history of this matter. The break-up of the Soviet system sent pieces flying in all directions with the effect of a centrifugal force. First, the nations of Eastern Europe broke away. That was followed by the demise of the Soviet-Asian empire. It now begins to look possible that the Russian Federation might begin to break up. That has a great impact on what happens in middle Europe, especially in regard to Germany.

For 100 years Germany has always been a little hesitant about her destiny and where it lies. Since the days when Bismarck spoke of the necessity from his point of view of keeping one foot in Europe, Germany has always been concerned about where its real interests lie. When its unification took place it seemed to me that that was the path of wisdom, following the disintegration of the Soviet empire and, therefore, the prospect of a new constellation of forces forming. It was the path of wisdom on the part of Chancellor Kohl to see the danger and to decide firmly to tie the new united Germany into the West—irrevocably, if you like—to have its economy, its industrial machine and its financial strength harnessed to the European Economic Community and to turn it into a European union. I believe that that was the path of wisdom. Therefore, I say to the sceptics, wherever they may sit, that that consideration certainly influences me quite as much as the economic side of the issue as regards where we should turn and what our attitudes should be in deciding whether to ratify the Maastricht Treaty. It was the child of the thinking of the leaders of Germany at the time when the Soviet empire broke up.

When Mr. Gromyko was President of the Soviet Union I had a discussion with him in the Kremlin a short while before his death. We spoke about the future of Europe—he could be very unbuttoned during those later months and years as president. He said to me, "No, I don't think the situation reflects a pre-1939 position. It reminds me much more of the period leading up to 1914". My Lords, 1914—think of the period leading up to then! It was a period when alliances formed, dissolved themselves and reformed again. The Austrian-Hungarian Empire was propped up by Germany, Britain and France put the Ottoman Empire on a life-support machine and there was suspicion, mistrust and the Balkan wars. This was the fate of a divided Europe pre-1914. When I had the conversation with Mr. Gromyko in 1988, I do not know whether he had those consequences in mind but I believe that it is not unfair to say that they should be in our minds today.

We have had an illustration of what could happen already in the former Yugoslavia. I agree with the noble Baroness, Lady Thatcher, that that is a real symbol of shame and frustration as regards what the West has failed to do in that situation, especially when I remember what we undertook at Helsinki in 1975. My noble friend Lord Wilson and I went there to sign the Helsinki Agreement. Thirty-five nations of Europe together with the United States and Canada made a declaration of principles which said: All states' frontiers are inviolable. They can be changed only in accordance with international agreement and by peaceful means". Apply that to the former Yugoslavia today with all the misery that it is going through and one can see how far timid and fearful European and Western leadership has failed to live up to that situation. Let us consider the consequences of failing to live up to it.

Some of us foresaw that. I attended a meeting of former heads of government in Prague in June 1990 when Yugoslavia had just lost its head of state and before any part of Yugoslavia had split up, and before arms had been gathered and purchased. All that was still to take place, and on 2nd June 1991 a group of us called on the CSCE to apply all possible means to avert an unnecessary tragedy and bloodshed which would have serious repercussions for other parts of Europe. Who can say that we were wrong? At that time this country should have taken a lead. We should have attempted to involve the United States in former Yugoslavia with firm leadership. We could have had a great vision and taken a lead as regards that matter, but we failed to do it.

What troubles me is that for every Yugoslavia there is another waiting to happen. There is hardly a frontier in central and eastern Europe which some displaced group cannot challenge today. Ours is a continent of ethnic minorities and of second, third and fourth generations of refugees who cling to their history. That is the reality in considering the Maastricht Treaty and its consequences which some of us seem to be in danger of forgetting.

As we have seen, there is a rising tide of nationalism and racism in its ugliest form lurking just beneath the surface. Former Yugoslavia has provided an example of how those emotions can be played upon by those who take their duties as irresponsibly as Mr. Milosevic. To reject this treaty —and this is where I begin—would throw Europe into further disorder. There would be further prospects and possibilities of all those bubbling troubles which lurk beneath the surface coming again to the surface.

I turn now to the question of economic and monetary union. I agree with those who say that the timetable is impossibly short. I forecast that monetary union, following this timetable, will not see the light of day this century. For a comparison on a much smaller scale I recall my problems with the decimalisation of the currency. That was one currency to be decimalised using much the same coins—certainly there was to be no vital change—which I announced in the Budget of 1965. The period of proper preparation (and even then some complained that it was not complete) of education and of getting the job done took six years from 1965 to 1971 before finally coming into force.

Those so-called technicians in Brussels will not merely be decimalising one currency in one country but they will merge and amalgamate 12 different currencies based on 12 different economies from 12 different cultures in five and a half years. I know that they are much better than I could ever have been as regards handling that problem but I doubt whether they are as good as that. The probability is that as the 12 member states begin to approach final decisions at those various stopping points, political and economic realities will begin to impose themselves upon Ministers and governments. That improbable time-table will be forgotten.

Some member states will be quite unable to live up to the twin criteria laid down for Stage 3; that is, 3 per cent. of GDP and 60 per cent. for a Government deficit. At present there is some doubt as to whether one or two countries satisfy the requirements. I believe that it is only Luxembourg that does so. I am delighted to hear that and I pay great tribute to Luxembourg, but even Luxembourg would hardly claim to be the sheet anchor around which the whole of economic and monetary union is likely to swing in due course.

Stage 2 is about to begin on 1st January 1994. I say to the noble Baroness, Lady Thatcher, and the noble Lord, Lord Tebbit, that if we were to fail to ratify, we should not be there. If we are not there, the decisions to be taken will be decisions in which we have played no part. However, when the noble Lord, Lord Tebbit, replies I ask him to tell the House whether or not he understands that even if we take no part in those decisions, they will intimately affect our economic life and prospects. Is it better for us to be absent? Has he learned nothing from the 1950s? Has he learned nothing from the time when we said that we should not take part on those issues, with the result that Europe was formed without us having any word to say about it? We then had to join later on the terms laid down by those who had created the structure. No, my Lords. Stage 2 is an essential stage and we should be there and take full part in it.

Although this is not an argument that I should advance, it is an argument that can be put forward by those who are sceptics. I say to the noble Lord, Lord Tebbit, that if he wishes, he still has an escape route because he would have the opportunity of a second bite at the cherry when Parliament comes to take the final decision.

Lord Tebbit

My Lords, I am grateful to the noble Lord, Lord Callaghan, for giving way. The question to which he must address his mind is whether a single currency is practical, achievable and, were it to be achieved, whether it would be in the best interests of the European Community. I believe that the answers to those questions are the ones to which he should address himself. As Chancellor Kohl has explained, a single currency requires a single government.

Lord Callaghan of Cardiff

My Lords, I have addressed myself to that question, but I somehow think that I shall not have to give an answer to it for many years to come. It is a long way ahead. One of the mistakes which has been made by the authors of the treaty is to try to pretend that the kind of system proposed can be instituted within a short period of time. But, in the end, if we are talking about the year 2025—I shall do my best to be here, but I find it difficult to think that I shall be I cannot forecast what will be the attitude of our people at that time to such a proposition.

I know, and it is quite clear, that as a medium-sized economy we cannot dissociate ourselves from what is now taking place. I know that it is quite clear that either we have to drag along behind Europeans who are moving forward because of the size of our economy and the consequences upon us of what we do, or we must take a more constructive part and play a more constructive role to find initiatives which suit us as well as the rest of Europe in this regard. I blame myself among others for that situation. I believe that we have always been unnecessarily defensive. We have always allowed the French to propose the initiatives. Quite frankly, I cannot remember any great idea for creating and promoting a family of Europe that has come from our side of the House. I am as much to blame for that as our past Conservative Governments.

I say to the noble Lord, Lord Tebbit, that that is the way we must attack the future. We must ourselves be taking the initiative and taking the lead. What I find so wretched about his approach is that I can see no alternative. The noble Lord knows as well as I do (having served in Cabinet) that it is impossible to insulate ourselves from the effects of what is taking place. So what is his real alternative? What is it that he is going to put to the people of Europe and to the nations of Europe that at the same time will bind them together in such a way that all those lurking subterranean problems which are just under the surface will be prevented from taking place through a political structure and, at the same time, enable us to play our full part? That is the real question.

I am sorry to have spoken for so long, but I promise now to be very brief. The major objective on the economic side is to keep inflation down. All right, I agree that it is very important; indeed, we all have it burned on ourselves because of our experiences in the 1970s and the 1980s. For years I have been recalling to anyone who would listen‐and there are not many of them—that the objective of economic policy and the measure of its success is not just to keep down the level of inflation. Instead, it is to keep four interdependent elements in equilibrium; namely, low inflation, a high level of employment, a balance in our overseas payments and a sustained rate of growth. Time after time, experience has shown us that one or two of those elements would get out of synchronisation at intervals. There is never absolute stability—they are always floating, with one doing better than the other and one doing worse. The successful management of the economy means the weight is switched to bear down on the one that is out of step. It demands continuous oversight and a readiness to adjust your targets. I readily admit that governments have not been very good at that, but it is unwise to give up the attempt.

When I am told that we shall be losing our economic sovereignty, I ask myself, where is our sovereignty today in fixing the level of sterling and its exchange rate? In 1972 it stood at 9 deutschmarks to the pound whereas yesterday, I suppose, it was round about 2.45 deutschmarks to the pound. But where is our sovereignty in fixing our own levels of interest rates? I do not know. Incidentally, I hope that the Chancellor of the Exchequer has by now read the Maastricht Treaty, because he will have a lot on his plate when he does. I am sure that he will feel that his freedom of manoeuvre is very much limited by it. But where is our sovereignty now that we have signed to the single European market?

The question is not whether European nations should yield up their sovereignty, for that is disappearing fast—that is, where it has not already gone. The question is whether by amalgamating our joint sovereignties we can recover together the economic independence which we individually lost and, at the same time, maintain our distinctive national cultures.

Certainly there are genuine criticisms to be made of the treaty. However, if I am right about the extreme unlikelihood of its timetable being kept, then I repeat that events themselves (facing the reality of doing what is set down in the treaty) together with British policy, could and should be combined—that is, if we can get the leadership from this Government who have so far been fearfully timid about some of those issues—to flatten out the excrescences. I hope that our Government will seize the opportunities as they arise.

However, whether I am right or wrong, when every criticism has been made the imperative that compels the treaty is the overriding necessity to preserve the peace and security of the European mainland and, hence, of the British Isles. That is a prize which I believe the treaty goes some way towards securing. It is a prize against which all other issues are second-order problems. For that reason, the treaty should be ratified.

1.35 p.m.

Lord Gladwyn

My Lords, I do not often agree with the Euro-sceptics, but on one point I believe that they are right. Since 1989—the bicentenary of the French Revolution—the whole situation in Europe has completely changed, as the noble Lord, Lord Callaghan, said. In other words, the Treaty of Maastricht—though for reasons that I shall advance it must be ratified—is now largely out of date.

The treaty is out of date because, inter alia, the unification of Germany has rendered the achievement of a common currency and monetary union more remote, at least for the time being; because the ravages of the recession on the Continent have made governments more hesitant about giving effect to any further measures for, for instance, the abolition of border controls; but, above all, because the end of the cold war has resulted (as Bosnia has shown) in a new necessity for a review of European defence within the North Atlantic Alliance, which itself may well be confronted before long by a yet further withdrawal from Germany of many American troops.

Why then is it still essential that the treaty be ratified by this country?—because it is only on the basis of an agreed text that we shall be able to negotiate, with our neighbours, these reforms that are now patently necessary owing to changed conditions, more especially when any enlargement of the Community is imminent. Are we really to be on the sidelines when perhaps the French and the Germans, with the Low Countries, and quite likely the 11 EEC members as a whole, agree to some adaptation of Maastricht involving, perhaps, rather increased power for the European Parliament, a new role for the Council of Ministers and the Commission and the selection of a single centre necessarily come under consideration? God forbid.

But we must stay out, say the Euro-sceptics, because if we accept Maastricht we shall inevitably lose our national identity in a united states of Europe on the lines of the United States of America. This, frankly, is absurd. Whatever form a future European union may take, it will be nothing like the United States of America. There will never be an elected president of Europe; never elected governors of the various states, replacing existing monarchs or presidents; never a conscripted European army; and never a European police or FBI.

There remains the fear that we may somehow be "ruled by foreigners" in the shape of the Commission. We are no more likely to be ruled by foreigners than the foreigners are likely to be ruled by us. M. Jacques Delors has been built up by the Euro-sceptics into a bogey, but for the most part he is only trying to remove all impediments to the free movement of goods.

It is true that of late the Commission has gone much too far in insisting on the rationalisation of some technically unjustified national practices which have no real adverse effect on the Common Market. However, I believe that those measures have already been modified to some extent and should for the most part disappear owing to the application of the principle of subsidiarity which is prescribed in the treaty itself.

We have, of course, opted out of the Social Chapter, though I believe that it will anyhow be accepted by the next British Government. Apart from the desirability of the Social Chapter itself, it is clearly wrong that its non-acceptance by us should favour our exports at the expense of all our partners in a common market. When the matter again comes before the other place the Government, while presumably maintaining their point of view, should certainly leave the proposal to a free vote in the House.

Those opposed to ratification have one last hope —a referendum. This, they believe, with some reason, given the immense publicity recently attending their cause, might well result in an outburst of nationalistic sentiment which would blow the treaty sky high. There are also others, not so minded, who genuinely feel that "the people" and not their representatives should be given the last say in a matter affecting their destiny. However, as has so often been said during this debate, the trouble with referenda is that votes are often cast for the wrong reasons. As we know, the French referendum was largely a vote for or against M. Mitterrand.

Peering rather further into the future, I believe that we must consider the probable effect on our European democracies of tremendous developments in the Far East and the so-called Pacific rim. De Gaulle used to say of China: "c'est un géont qui dont: laisse-le dormir". But now, whether we like it or not, it would seem that the giant has at last woken up. The industrialisation on western lines of that vast country of well over a billion people is certain to pose challenges to Europe which demand a common policy if they are to be met.

I conclude my remarks with one simple thought. If we ratify the Treaty of Maastricht we shall, for the time being at any rate, be no better off; but we shall soon be much worse off if we fail to ratify.

1.48 p.m.

Lord Amery of Lustleigh

My Lords, in venturing to address your Lordships for the first time I cannot help recalling that it was 43 years ago that I first lost my political virginity in another debate on Europe. As it happens it was in this Chamber, where the House of Commons was accommodated while its own Chamber was being rebuilt. So, like the hour in the Arabian legend, I have had my virginity miraculously renewed. In sacrificing it again I must crave your Lordships' indulgence if I overshoot in any way the noncontroversial pattern which I have been told is traditional in a maiden speech.

For my own part I have always been happy with the Maastricht Treaty because I thought that our negotiators had excised from it any potentially malignant parts. But I recognise that there is a strong body of opinion which fears that, even as it is today, a commitment to the treaty would lead us to a commitment to a European federation. I do not myself belief that that is likely, but there is a strong federal lobby. There are distinguished people who would like to see Europe evolve on the model of the United States of America, with the Commission becoming the government, the Council of Ministers becoming the Senate, the European Parliament becoming the House of Representatives and our own parliamentary institutions reduced to the status of state legislatures.

I am sceptical as to whether that will come about. As I read opinion in Europe today there is a strong revulsion against over-centralisation in Brussels. But even supposing it were true and the federal danger were as strong as some of my noble friends have represented, how should we respond to it? There are two options.

One option is to leave the table and refuse to ratify the treaty. Where would that lead us? The noble Lord, Lord Callaghan, alluded to the problems facing Germany and the way in which Germany will evolve. I cannot help thinking that if we were to withdraw from the Maastricht Treaty Germany would lead a smaller Europe. I have been taught by history that a Europe united without us could one day become a Europe united against us. Let us not run that risk unless we have to. There may come a point when we have to withdraw, but I see no reason for us to do so now. As the noble Lord said, we can have another bite at the cherry before we go for an economic Dunkirk.

The other alternative is to ratify the treaty and press on with our vision of a Europe of states. For that we are uniquely qualified. It is often forgotten that the federal idea was rather popular in Britain at the turn of the century. In 1902 the Balfour Government actually proposed to the colonial Prime Ministers that we should have a federation of the Empire with a federal government, a federal parliament, free trade between the different self-governing parts of the Empire and an imperial navy. They turned it down. Instead they offered us the closest co-operation in all spheres of government. They lived up to their word. In World War I they sent men and money. At Versailles their delegations worked closely with ours. When we went off the gold standard all except Canada adopted the sterling system. In World War II they were even more magnificent than they had been in World War I. And in the aftermath of the war, when the lend-lease had stopped, they stood by us. We could justly claim that the old Commonwealth was a superstate in almost every respect. Yet it was based entirely on intergovernmental co-operation. It was a union of states which had themselves rejected the federal idea.

The impact of all this during the war was not lost on General de Gaulle. It led him to say, in a characteristic boutade, as he watched the way in which the British Commonwealth nations worked together, that he wanted to see Europe develop on British lines, but, regrettably he added, preferably without the British.

I do not say that the old Commonwealth should be the model for European union but Europe is more likely to evolve in that direction than in the American direction. It may need stronger structures than the Commonwealth ever had. For my own part, I have little faith in blueprints. The European Union will grow in its own way—its own mysterious way—and it will only be when we look back on it in years to come that we shall be able to stick a label on it to say that it was federal, commonwealth or confederal. Meanwhile our task, I am convinced, is to be in there and to help the process in the light of our experience.

I was lucky enough to be with Sir Winston Churchill in the Autumn of 1946, along with Robert Boothby, Duncan Sandys and my father, Leo Amery, at the meeting at Chartwell at which the decision was taken to launch the European movement. It was only a few weeks after Churchill had made his speech in Zurich, and at lunch that day he opened his mind to us. His vision of Europe was not a shopkeepers' vision. Of course, he understood the importance of trade and financial co-operation, but he wanted a Europe which he believed to be political, military and cultural just as much as economic.

As he had at Zurich, he dwelt at length on the Franco-German reconciliation. There are moments when I think it was all too successful. However, he also attached great importance to bringing into Europe when the time came the nations of eastern Europe then occupied by Communism or the Red Army. Indeed, it was a constant theme in all his speeches in the European campaign. He was at pains to make sure, for example at the Hague Conference, that two rows of empty chairs were left to symbolise the nations which could not be with us.

The opportunity has now come to bring in the nations of eastern Europe. I believe that it is very necessary that we should. I do not believe that we can dare to leave them in a limbo between a renascent Germany and a very uncertain Russia and Ukraine. We need to bring them into our European union and family. I venture even to say that there will be no chance of a Yugoslav reconciliation except within the European family.

All that will not be easy to bring about. There are strong vested interests—agricultural and clerical—which will be uncertain as to whether they want to bring the east European countries in. The only way in which we can contribute is by being in the forefront of the European Community. If I may recoin a phrase, we need to be "one of them". We started the movement for European union. I hope that we shall be true to Churchill's vision and scorn to be guided by our fears.

1.53 p.m.

Lord Healey

My Lords, some happy conspiracy has contrived to require me always to follow maiden speakers who were colleagues of mine at Balliol in the 1930s. Only a few months ago I was paying a tribute to Lord Ridley, whose premature death we all deplore, and reminded the House that one Balliol man never eats another. I have never been tempted to eat the noble Lord, Lord Amery, because although we usually disagreed on domestic politics, we often found ourselves very close on matters of foreign policy. Indeed, in 1938 we campaigned together, along with Sir Edward Heath, to get the Master of Balliol elected as Member of Parliament for Oxford on the anti-appeasement ticket. We failed; but our failure launched the noble and learned Lord, Lord Hailsham, on his meteoric career.

After his distinguished war service in the Balkans, the noble Lord and I met again in 1949 at the Council of Europe and found ourselves in agreement. We met, of course, later in the House of Commons itself. Even the Suez campaign found us united side by side in attacking the Prime Minister but from somewhat different viewpoints: I, because the Prime Minister had started the war; and the noble Lord because he had not the resolution to win it.

The noble Lord will be alarmed to hear that I agreed with every single word of his maiden speech, so it must have been controversial. Nevertheless I congratulate him on behalf of the whole House. We look forward to hearing from him many times in the coming years.

On the Maastricht Treaty I expressed my own views in four minutes—a record for me—in the last debate. I agree with the noble Lord, Lord Cockfield, who spoke yesterday. It adds little of substance to the Single European Act and nothing to the Stuttgart Declaration. Indeed, it has almost nothing of real constitutional significance. I find it appalling that the Government have compelled Parliament to waste 18 months in repeating ritual incantations about the desirability in principle of Britain being a member of the European Community—incantations which we have heard continually for the past 45 years, although I am bound to say that some of the familiar faces which have spoken in the debate have argued from somewhat different positions and occasionally from different parties from those in which they took part earlier.

I wish therefore in my short speech now to look at the broader implications of a failure to ratify the treaty. Here I shall find myself following very much the line taken by my noble friend Lord Callaghan, because I find it particularly tragic that the civil war in Britain's Government Party over Maastricht has played a major role in deepening the crisis in Yugoslavia. I agree very much with the noble Lord, Lord Carrington, that by pretending that it had a common foreign policy over Yugoslavia, the Community produced consequences which were "catastrophic". The fact is that there was a deep division inside the Community when the Yugoslav crisis first broke. From the beginning, Germany and Italy, supported by Austria and Hungary—the members of the wartime Axis—made it clear that they wanted to see Yugoslavia break up and to restore a greater Croatia with roughly the boundaries in which it fought with them in the Second World War under a fascist leader, Anton Pavelic whose Ustashi killed at least half a million Serbs during that conflict.

I understand their position—it is a historic position and goes hack long before the Second World War mdash; although I deplore it. I deplore even more the fact that none of those four countries has made any contribution to the United Nations peacekeeping efforts in Yugoslavia although they continually tell us what we should be doing about it. However, I find it very difficult to understand, in this disagreement, which ranks the wartime Axis powers against France and Britain and their wartime allies in Northern Europe, how on earth the noble Baroness, Lady Thatcher, could have identified herself with the German position rather than the British one, especially, in the light of her well-known distrust of German policy in recent years. She told us, I recall, a year ago that President Tudjman was fighting for democracy. But his first act on becoming president was to restore the Ustashi flag, his soldiers are fighting now in Bosnia wearing SS uniforms, with swastikas on their helmets and giving the Nazi salute. President Tudjman himself, only four years ago—this was not an adolescent fantasy—published a book in Zagreb called Wastelands of Historical Reality, a book of such alarming anti-semitism that Simon Wiesenthal, the greatly respected campaigner against Nazism, has recently arranged to translate it into French and English.

President Tudjman's book declares that Hitler's new order was justified by the need to remove the Jews from Europe and to correct the historic wrongs which had been inflicted by Britain and France at Versailles. He went on to say that the Jewish people had always believed, as a matter of faith, in genocide.

I find that is somewhat odd company for the noble Baroness, Lady Thatcher, to keep; but perhaps she was unaware of all those facts. History has never been her strong point and literature is not her favourite hobby. However, she has always shown an astonishing capacity to ignore facts which contradict her prejudices. The psychiatrist would, I believe, describe the condition as cognitive dissonance. I hope that the noble Lord, Lord Tebbit, acting once more as her Man Friday in winding up the case for the opposition in this debate, will make all plain.

I suspect, however, that the real reason why the noble Baroness supported President Tudjman is that the type of nationalism which she now espouses is essentially that which is tearing Yugoslavia apart and bids fair to tear apart at least a quarter of the world in the coming years. We must recall, as my noble friend said, that until Tudjman and Milosevic released the demons of this type of nationalism, Moslems, Croats, Serbs, Orthodox and Catholic people had been living together in perfect amity in Yugoslavia. The damage which that type of nationalism can do in the modern world needs no clearer proof than that.

The noble Lord, Lord Carrington, warned us and warned the Government that if they surrendered to Germany's demands that a Croatia established by military victory in violation —as my noble friend reminded us—of the Helsinki Treaty should he recognised unconditionally as a state, without giving any guarantees for the protection of the minorities there, if that were to happen then the whole of Yugoslavia would dissolve into conflict between the various ethnic and religious groups fighting to establish states of their own.

Then, suddenly, without any explanation, the British Government, which had been fighting Germany on the recognition of Croatia, surrendered. I have been led by conversations in recent weeks with some of those concerned to the conclusion that this astonishing and disastrous volte face was a pay-off to Germany in return for German support for the opt-outs during the Maastricht negotiations. The opt-outs in fact had no importance whatever because the German Parliament has already unilaterally given itself an opt-out on economic and monetary union by saying that it has the right to reject that union, if it feels it wise to do so and if it is put to it. Opt-outs from the social chapter are a futile and damaging fantasy and nothing proves that better, as the noble Lord will agree, than the embarrassed position of our Minister with responsibility for employment at the negotiations on the 48-hour week in Brussels only the other day. We gave away something of enormous importance with catastrophic consequences, in return for something of no importance whatever.

The only reason why the Government were so anxious to get these opt-outs was to appease the rebel fronde of anti-Europeans in their own party. They then made matters worse by recognising Bosnia as an independent state, just at the moment when the noble Lord, Lord Carrington, had the agreement of all three groups in Bosnia to have three separate ethnic areas. Of course, the moment that was done, Mr. Izetbegovic withdrew his agreement to the Carrington plan; and the Greek tragedy is still unfolding, looking gloomier and gloomier every single day.

Surely, we can all learn some lessons from this series of disasters. The first is that the noble Baroness's type of nationalism is the greatest single danger to peace in the modern world. The second is that the Prime Minister's failure to confront it head on as such a danger has made the civil war in the Government's party a danger to Britain and to Europe as a whole. As has been said on many occasions in the debate, the Prime Minister has no policy on Europe so far as we can discover. At one moment he wants Britain to be at the heart of Europe, the next he is boasting that he is the biggest Euro-sceptic of them all. Where on earth does he really stand? No one knows.

Yet the kind of problems which we have botched in such a disastrous way in Yugoslavia, as my noble friend pointed out, will confront us within weeks, maybe, in other parts of Eastern Europe. Hungary, for example, now has on its borders five new states which did not exist 12 months ago. In all those new states, there are sizeable Hungarian minorities. The problem of the Ukraine is probably the most dangerous single problem in the world at present with which the Americans are at last trying to get to grips. So far as I am aware, we have had almost nothing to do or say about it as a government.

How are we to accommodate this type of nationalism which is tearing so much of the world apart and which we have known often in our own island history—in Scotland, Ireland and Wales? How to accommodate that type of nationalism, without allowing it to destroy us is, in my belief, the major problem with which the world will have to wrestle in the next 100 years. I only pray that the Government will recover their nerve in time and argue their case for a different approach to nationalism with the same conviction and eloquence as the noble Lords, Lord Thorneycroft, Lord Carr, Lord Pym and the noble and learned Lord, Lord Howe, did for us yesterday. They put up the sort of case which the Government should have been putting up against the noble Baroness—but then of course they were all casualties of the noble Baroness's Government at one time or another.

Many years ago one of our Irish colleagues wrote unforgettably about the sort of world which we now face in a poem called The Second Coming. He was an Irish senator, a great hero of mine, Senator William Butler Yeats. In The Second Coming he said: Things fall apart; the centre cannot hold; Mere anarchy is loosed upon the world, The blood-dimmed tide is loosed, and everywhere The ceremony of innocence is drowned; The best lack all conviction, while the worst Are full of passionate intensity. That is quite a good description of the Government Party at the present time. But I warn the House that if the civil war inside the governing party continues, it will poison Britain's political life, corrupt the British Government's policy in every field and destroy Britain's influence both in Europe and in the world as a whole.

2.11 p.m.

Lord Moore of Wolvercote

My Lords, I should like to join the noble Lord, Lord Healey, in congratulating the noble Lord, Lord Amery, on his delightful maiden speech. I must apologise to the noble Lord the Leader of the House and to noble Lords for not being able to be present yesterday.

I have very little to add to what I said in this House in February when we had a short debate on the Maastricht Treaty. If Britain signs the treaty it will signify that we have accepted the prospect of a fundamental constitutional development in the history of our country. Such may or may not be the best course for Britain. But that being so surely there is an unanswerable case for holding a referendum. There is genuine and widespread doubt in Britain about Maastricht, as there was in France and Denmark, where referenda have been held. People are deeply concerned about the issue. Surely, in these circumstances, the correct course must be to give people the opportunity to express their view directly.

I have said that the Maastricht Treaty marks a major constitutional change. If anybody doubts that, please note the title Treaty on European Union. If anybody is still unconvinced, please note that Chancellor Kohl is reported to have said last week that once Maastricht has been ratified there should be an extraordinary summit to re-launch European union.

The objective of those who drafted the Maastricht Treaty was quite clearly to bring about eventually a federal European state. They made no secret of it then, and they make none now. The British people must surely be allowed to say unequivocally whether they endorse such an objective.

I have tried to understand the objections to a referendum and I have to confess that I find little substance in them. We are told that the people approved Maastricht because it was part of the Government's platform at the general election last year. But we all know that Maastricht was not an issue at the general election, since it was endorsed by all three political parties—and that was before Britain withdrew from the ERM. We are told that a referendum is undemocratic because it undermines the sovereignty of Parliament. But what can be more important than the will of the people? Finally, we are told that it would not be possible to explain the issues clearly to the electorate. My Lords, what an insult, both to the electorate and to the Government!

The real reason, of course, is that the Government and the Opposition parties fear that a referendum would produce a vote against Maastricht. I would not presume to hazard an opinion as to the result. Anyway, that is not the point. What is so very important today is that our people should be allowed to give their own decision on such a momentous issue.

2.15 p.m.

Baroness Young

My Lords, I should like to pay tribute to my noble friend Lord Amery of Lustleigh and to say how very much we all appreciated what he had to say based on his long political experience. I hope that we shall hear from him on many occasions in the future.

I have hesitated to speak today because there are so many speakers on the list. But I do so because I believe that this is one of the most important debates to he held in this House. I made my maiden speech in support of the principle of Britain's entry into the European Community; and I was the Foreign Office Minister responsible for taking the Single European Act through this House. One of the more dismaying features of the debate so far has been the repetition of so many of the arguments against Europe which were spoken to over the Single European Act, as stated in 1973.

Yesterday my noble friend Baroness Thatcher used the analogy of a European train. Many of us thought that in 1973 Britain had boarded the train. Like most trains—and my experience of travelling by railway is considerable—it goes faster at some times than at others. But speaking as a passenger, if there is one thing worse than being stranded at Crewe, it is to stand by an open door wondering whether or not one should jump off—a situation which is at best dangerous and at worst suicidal. If one wishes to influence the direction in which the train is going it is essential to stay with it.

I am like almost all the other speakers in this debate in that there are many things which I do not particularly like about the European Community, or, indeed, about the Maastricht Treaty. They have been well rehearsed, and I will not repeat them. But that situation is hardly surprising. Any treaty drawn up by 12 independent countries with very different histories is bound to have some disadvantages for us, as indeed it has for other countries. Any treaty means by definition a loss of sovereignty for a greater good.

I found myself in agreement with much of what my noble friend Lord Carrington said yesterday when he spoke of the centralists and the pragmatists. I am a pragmatist. I do not want a federal Europe, and I think it unlikely that we shall get one. I agree with those who think that the timetable set down in regard to Maastricht is one that is difficult to achieve and that it probably sets too rapid a pace. I believe too that we have suffered from too many directives from Brussels, on top of which we have frequently imposed our own particular version. But what is important at the end of the day is to weigh the balance of advantage in either ratifying the treaty or staying outside.

Future historians will, I believe, regard the establishment of the European Community as one of the most successful political and economic achievements in the post-war world—far more successful than could have been imagined when it was established—and it has been a major contributor towards the longest period of peace in Europe this century.

My noble friend Lord Whitelaw, with whose remarks I am so much in agreement, referred to his influences on this matter. I too recall that my father was one of the few British survivors of the Battle of the Somme. When I was a small child he very rarely, if ever, spoke of his experience because it was all so terrible, except to say at the end of the war, "I hadn't a friend left". I think that that was the effect of that war on a whole generation of people. How fortunate it is for the young that they have never had to experience anything like it. And that is partly the result of the European Community. It is, after all, a Community that has strengthened democracy in Spain, Portugal and Greece. It is an organisation which other countries of EFTA and eastern Europe wish to join. Even Switzerland, surely one of the most successful countries in terms of economic prosperity and political stability, has considered joining. It is the largest free market in the world with immense opportunities for our businesses, as was so well set out yesterday by my noble friend Lord Alexander.

Perhaps there is anxiety and confusion about the European Community at this time. As my noble friend Lord Cockfield said, in many instances people have identified the Community with recession. Things are not going well and it is easy to look for and find others to blame. It is true that some things do not help our economy. Moreover, the ending of the external threat from communism has meant that it is all too easy to argue among ourselves. As the noble Lord, Lord Healey, pointed out, we have seen the very worst consequences of that in Yugoslavia. We must all pray that the conflict does not spread.

I shall vote in support of the Maastricht Treaty. In my view there is one reason above all for doing so. It is a political reason. Historically, Britain has always been opposed to any one country which has tried to dominate the Continent of Europe, whether that country was Spain, France or Germany. If we do not ratify this treaty, I believe that Europe—by which I mean the Continent of Europe—will be dominated by a Franco-German alliance. By not ratifying it, we will put ourselves in a position that we have sought to avoid throughout our history. We would be marginalised in Europe and a most powerful force would be established on the other side of the Channel.

The idea that somehow we would be able to obtain all the benefits of the single market while not accepting any of the political and economic changes is simply wishful thinking. Nor could one put back the clock to some bygone age. The Community would move on and quite probably in a direction that we did not like. Indeed, it is all too easy to see the effects of the recession in the Community leading to nationalism, demands for protectionism and a Fortress Europe. In those circumstances, no other country would be considered for joining the European Community, with all the dangers and disadvantages for Europe as a whole. In the outside world, we should be seen as a country which willingly signed a treaty which was hailed, rightly, as a success when presented to Parliament but which we failed to ratify. We should surely lose our influence because we should be regarded as at best uncertain if not unreliable.

I come to my last point. I believe that it is most important that the Government should now take the initiative on Europe. That is a point that has been made from all parts of the House. I recognise the great diplomatic achievements of my right honourable friends the Prime Minister and the Foreign Secretary in securing for us the treaty at Ma astricht, strengthening the clauses on subsidiarity and obtaining the opt-out of the social chapter as well as ensuring that we are not committed to a single currency. We have heard from my noble friend the Leader of the House and my noble and learned friend the Lord Chancellor today that there is already evidence that we are benefiting from those changes.

But we need to establish our own view of where we think the Community is going. We need to press ahead and widen the Community by the inclusion of the four EFTA countries which wish to join and, above all, by the implementation of the GATT round, which must be the most important issue facing the world. We shall only be able to achieve those important objectives by working from within after ratification of the treaty. We must now work to that end and ratify the treaty as quickly as possible so that we can move on to the pressing problems of Europe and the world.

2.25 p.m.

Baroness Castle of Blackburn

Fellow Peers, I shall vote against the Maastricht Treaty. However, I hope that no one in this House will pay me the discourtesy of calling me a Thatcherite. My reasons for opposing the treaty are very different from those of the noble Baroness, Lady Thatcher. Indeed, I believe that she is the last person in this House who on this issue should be flaunting the banner of national sovereignty and trying to appropriate that cause to herself. I thought that her speech yesterday was unnaturally muted for her. The reason is that some of the illogic of her situation and her opinion is beginning to be borne in on her. Indeed, after yesterday's debate I do not see how she can be left in any doubt about the inconsistency in her position now which is seen by most Members on both sides of the House.

There was the devastating speech by the noble Lord, Lord Jenkins. Then, we all enjoyed the reminder from the noble Lord, Lord Cockfield, of the far-reaching yet solemn Declaration of European Union that she signed at Stuttgart in 1983. At that time I was a Member of the European Parliament. I remember, as she came back with that declaration and it was reported to the Parliament, realising that we were engaged on a very slippery slope indeed. It was to precipitate Britain into an entirely different position constitutionally from any that we had ever known before.

Then there was the single market and the Single European Act. Again, the noble Lord, Lord Cockfield, is a very good witness. The noble Baroness claimed the Act as one of the flagships of her policy. "Oh", she said, "look how it sets all European trade free. It is real competition"—and the rest of it.

I was always in favour of the removal of administrative barriers to trade. In many respects the free trade area was a mockery. It had been created when the common market was set up. I know because as an MEP candidate I used to go round the firms in my constituency and ask them what membership of the Community meant to them. They used to say to me that it would add nothing to Britain's export trade. Try to export goods to Germany, they said, and she will slap on safety regulations or something which will keep our goods artificially out. Oh yes, I campaigned in the European Parliament for making effective the free trade area. I believe that we must be in a large market. We must not be Little Englanders by any means. The future of manufacturing in the modern world lies in the larger market. Certainly it does.

I want to impress on the House that the Single European Act is not just the removal of administrative barriers to trade. It is a whole new philosophy of European relationships. It transforms those relationships psychologically and economically. It is designed to do so. The noble Lord, Lord Cockfield, as he triumphantly pressed through the 300-odd directives, would have been the first to agree that it transforms the trading and other relationships of the Community.

It penetrated into our Euro-constituencies when we realised under the public purse routine the changes that had been made. A local Labour council could no longer just give preference to local labour when allocating contracts. That was out. I ask this House to realise that what the single market means is that in questions of jobs, setting up in a profession, settling in a country, and buying, taking over or creating firms there is to be no distinction whatsoever between the nationals of member states. That is common citizenship in de facto terms, is it not? Yet the noble Baroness, Lady Thatcher, has constantly quoted it as being one of her great achievements. Of course, she made the process of robbing us of our national sovereignty all the more precipitate by her policy of denationalisation of goods, services and firms here at home.

Privatisation is the Open Sesame to the takeover by European firms of whole areas of economic life in this country. For instance, our whole water supply industry is now privatised and could easily fall into the hands of the French—at one time it was rumoured that there were going to be French water companies. In the debate on the railways we are told that British Rail is not to be allowed to bid for one of the franchises in the privatised industries but that there is nothing to stop the French state railways coming in and taking them over. The noble Baroness, Lady Thatcher, has always been willing to give up economic sovereignty so long as business goes into private hands. And that is what is happening.

The noble Lord, Lord Cockfield, embraced that policy enthusiastically. He has always been logical in that regard. When I was in Europe he generously entertained me to lunch more than once; he was always extremely courteous and helpful and we used to admit our differences. I do not believe in order to obtain the advantages of a larger market or the economic advantages from our membership of the European Community that we need to pull down every one of our protective barriers.

What is interesting is that, although the noble Baroness was prepared to give up economic sovereignty, the other 11 member states said, "Hold on a minute. This completely free movement of persons, capital and goods can lead to tremendous problems in certain of the weaker areas of the Community". That was said not only by Jacques Delors but by people like Herr Pal when he was President of the Bundesbank. Any intelligent person can see the dangers of a free-for-all in a Community in which there are such great divergences in economic strength between the member states. I should have thought that that was child's arithmetic; the teaching of such common sense should be in the national curriculum.

The other member states said "Hold on, there are dangers to real unity in Europe from a free-for-all and therefore we must draw up a collective charter of social protection". The noble Baroness, Lady Thatcher, outraged, then said, "I will defend British sovereignty. I will defend our freedom to have a low-cost, sweated labour economy in this country whatever else Europe is trying to do".

As the noble Lord, Lord Cockfield, said—I have heard him say it in Europe—the changes that the noble Baroness introduced inevitably led on to something else. It was the enthusiasm with which he pursued that policy which began to alarm the noble Baroness when she was Prime Minister. She was concerned that the horse was running away with the cart and refused to reappoint him in January 1989, although he had been her treasured nominee for the European Commission.

What happened then? A month later, in a journal called European Affairs, the noble Lord, Lord Cockfield, further shocked the noble Baroness by pointing out that the empress was wearing federalist clothes and that what the internal market had set in train could not stop there. He said that it was not the end of the road; it was the beginning of a new road —a road to an economic Europe. We all know what that means. He said that to make it work we would have to have a single currency and a European bank.

The noble Lord therefore has always been consistent. He tells us today that compared with the internal market, the Maastricht Treaty is a small step indeed. The noble Baroness, Lady Thatcher, disgraced the name of this country by attacking the Social Charter, and her successor as British Prime Minister has been no more worthy in his behaviour towards the working people of this country.

But the rejection of the social chapter is not the only reason why I oppose the treaty. The biggest danger to European union—I prefer the word "unity"; "union" carries too many Thatcherite overtones—is unemployment. What will 17 million unemployed do to the unity and strength of Europe? What will it do for the resurrection of conflicts that we see on every hand? It has been estimated by the Community authorities that the figure will have risen to 22 million by the end of the decade. That is the challenge we should be facing. If we care at all for peace in Europe and, indeed, in the world, if we care to avoid the old splits, bitterness and conflicts, then that must be the main problem that we tackle. It should be given priority.

The Maastricht Treaty contains Article 2, to which lip service is paid. I know from first-hand experience that the European Community is very good at paying lip service to good principles. It says, "We need a high level of employment and a policy for growth". But in the economic instruments the treaty creates to give us economic and monetary union there is no mention of jobs; there is no mention of growth.

The current convergence criteria, which are set out as the conditions to be met in order to move to the next stage of economic and monetary union, are purely monetarist financial criteria. They concern the controlling of inflation, the stability of exchange rates and the cutting of government borrowing. We are constantly reminded that the situation faced by this country is faced by other countries throughout Europe. None of them helps to bring down the levels of unemployment which carry in them the seeds of future fascism and the danger of war.

We laugh at that at our peril. The signs are under our noses. As I think your Lordships realise, I have been in politics for a long time. I have been a Member of the House of Commons or in governments for many decades. Time and again I have seen the same mistake made of trying to force countries into financial strait-jackets, regardless of the effect on their real economy.

When I was a schoolgirl I remember Philip Snowden in the 1929 Labour Government clinging to the gold standard on which Winston Churchill had impaled us, deepening the recession and raising unemployment. It was not until that had destroyed the Labour Government and the national government had been set up that we went off the gold standard and, far from the heavens falling, we got recovery. That is exactly paralleled by what happened over Britain's membership of the ERM. The folly of trying to force this country into that kind of financial and exchange rate relationship at a currency value that our real economy could not sustain was one of the wickedest policies I had ever experienced in my long political life. I was against our joining the ERM on the conditions available.

We have to accept the facts as they are. I do not pretend for a moment that we can extricate ourselves from all the incubuses with which we have been burdened to a very great extent, though not exclusively, by Tory governments. In life and in politics we have to make the best of where we are. We are in Europe and we are linked very closely by trade directives. We cut other trade links, pretty recklessly in my view, and concentrated on that. The fact that I have to accept that adds all the more urgency to the need for the whole weight of this country's prestige and experience to be thrown behind the harnessing of the European Community and policies which alone make economic sense, not monetarist policies but expansionist and human policies—ones that arouse people's enthusiasm about Europe, which they certainly do not have at the present time. It is not a matter of being an anti-marketeer; it is being a current realist.

I read an interesting pamphlet produced the other day by a group of pro-market and pro-Maastricht Labour MPs. It was a very good, common sense analysis of Maastricht. It concluded that the Maastricht Treaty had many faults which as a matter of urgency had to be rectified. When do we start rectifying it? I will start to rectify it by voting against the terms of the treaty as they are now. I am tired of situations in which we are told that we will join and then we can change it from within. We were told that when the terms for Britain's entry were negotiated. When my noble friend Lord Callaghan valiantly tried to renegotiate those terms he could get nowhere in persuading the Community to do anything about the common agricultural policy. We were told, "Do not worry; they are reforming it. Just go inside and it will get reformed". How many years ago was that? I cannot see any evidence of that. I believe that we should use all the authority of this country and its institutions to say to Europe, "Yes, we will come when it represents an economic policy that can save Europe instead of endangering it".

2.42 p.m.

Lord Aldington

My Lords, the noble Baroness who has just spoken has eloquently commented on unemployment here and in the rest of Europe. She seemed to think that in some curious way it had been caused by a treaty not yet in operation. I find it very difficult to see the logic of her argument. I believe that in referring to the monetary clause of the Maastricht Treaty she has overlooked the provisions relating to economic union and economic policy. I will not follow her too deeply into the wider arguments that she put. I want to come back to the Maastricht Treaty and the Bill before us.

I start by saying that, like many of your Lordships, I consider it an enormous privilege to have listened to this debate for most of yesterday and so far today. Speeches of great importance to our future have been made with all the authority of noble Lords who have held high office. The message that I got from the former Prime Minister, the noble Lord, Lord Callaghan, and others was that we in Britain could not insulate ourselves from the effects of events, decisions and structures in Europe, whether economic or political. The message that I got from my noble friend Lady Young was that it has never been in the British interest for Europe to be united without us. The message that I got from my noble friend Lord Whitelaw was that Europe without Britain was nothing and Britain without Europe was nothing. All of those are important messages. There was a little sidewind of a message from the noble Lord, Lord Healey, which had nothing directly to do with Maastricht. He spoke from great personal experience of the danger of civil war in government parties. No one can know more about that than those involved in this matter. I hope that we all take to heart the lesson of which he spoke.

Like many of your Lordships, my early life drove me to accept that there must be unity in Europe for the peace and prosperity of Britain. My noble and learned friend Lord Rawlinson and my noble friend Lord Whitelaw have described their experiences. I shared those experiences. I also shared the experience of working with my noble friend Lord Thorneycroft when he was President of the Board of Trade in seeing what we could do about trying to join in Messina and-the results. More recently, I have had the valuable experience of working on your Lordships' European Select Committee seeing at close hand how the Community really works, warts and all—and there are some warts—and chairing a number of inquiries. I have learned that the best way to clear away fear, doubt and discord is to look at the facts. It is the facts and the evidence that form the basis of the reports to which the noble Lord, Lord Boston, kindly referred yesterday.

As has been said, this Bill is a manifesto Bill. It relates to a treaty that we cannot amend. It is all or nothing. Many noble Lords have described the effects of rejecting it. At the very least, even if we were able to effect a renegotiation of it—which I doubt—for a time we would be taken out of the heart of the Community's discussions and the Community would be back to the stage when all the complaints by your Lordships voiced today and on previous occasions arose. We would be back to the exact cause of the complaints about which anti-Europeans made so much fuss. One of the values of this debate is that at last those of us who believe in the Community and European union have had our voices heard. There has been too much criticism in the media. How are the public expected to form a judgment if, day after day, they hear little in favour of our membership of Europe and still less in favour of the treaty? This debate gives that chance. I wish that some of the reports and one in particular, of our debate yesterday had not just headlined all the criticisms of Maastricht but had as well headlined some of the arguments in favour.

I am a supporter of the treaty and of the Bill, not just because of the awful consequences of failing to ratify. I am an enthusiastic supporter because I believe that the treaty has positive merits. We should not doubt those merits just because some of our noble friends and some anti-Europeans do not like them. The noble and learned Lord, Lord Wilberforce, warned us to be careful of words. The word "union" in "European union" means different things to different people. To me, as was set out in the Select Committee report, it means a process, just as "closer political union" means, and has always meant, a process. It does not mean a defined constitutional structure. The steps to be taken, step by step, in that process can be taken only by unanimous agreement. We cannot be rushed too fast or too far unless we agree to go there.

There is nothing new about the commitment to closer political union or to closer economic and monetary union. We heard it in the Single European Act, at Stuttgart and even earlier still. The first merit of the treaty is that it puts the Community train on a much better defined track and it keeps it moving on that track. That track allows for different approaches in different policy areas; it allows for them two new pillars; and it allows for the further development of the single market and the old Community competences. That itself is a great advantage. That is not a federal track. The Union can advance step by step in bringing about the agreed aims. That indeed has been the purpose of the Community for some time.

My noble and learned friend on the Woolsack spoke about and helped us very much on subsidiarity. I was very glad that he made the point, which has always seemed important to me, that the last sentence of Article 3b applies to everything, whether it is done by the Community or whether it is in the exclusive jurisdiction field. The point has also been made that the Edinburgh Summit took it further and that all legislation is being re-examined with the subsidiarity point in mind.

Then there are the clauses and the articles which improve accountability—accountability to the European Parliament in particular. But also the practice will improve accountability of Ministers in the Council to national parliaments. They improve effectiveness through enforcement powers. They improve the financial control through European parliamentary arrangements and through the new status given to the Court of Auditors, which is also relevant to fraud which we have discussed before. They improve the role of the European Parliament. I agree with those who say that both this House and another place have given too little importance in past years to the role of the European Parliament.

The treaty provides the basis for enlargement. The clauses about enlargement refer to joining the Union. Four members of EFTA wish to accede. They are not satisfied with a free trade area. Other people talk as if we should be satisfied with going back to the free trade area. They are not satisfied with that, nor with the half-way house arrangements of the European Economic Space. They want to join the customs union; they want to join in fixing the rules; and they want to join in the political arrangements of the Union. Those four countries—Austria, Sweden, Finland and Norway—know and have studied the treaty. How extraordinary that this country at this time should be saying to them, "Oh, you want to join something that we have decided not only to cast doubt on but to leave or to become semi-detatched from".

Those are the merits. Some points of criticism have been made, mostly of what was happening in the Community before Maastricht. To my mind some extraordinary things have been said about the British deficit on trade with the Community. The figures given yesterday by the noble Viscount, Lord Tonypandy—we call him our noble friend; and he is my friend —about the deficit seemed to be mathematically gigantic. I have looked at the figures in Command Paper 2168. In 1991 the export-import ratio of British manufactured goods with the Community countries was 98 per cent. That is a good deal higher than anywhere else in the world—a deficit of £700 million. In 1979, as the noble Lord, Lord Callaghan, will remember, it was only 80 per cent. In 1984 it dropped to 69 per cent. So it has been improving. In 1992 it was 96 per cent..

That is a record of substantial success by the competitiveness of British industry. It is also a record of the thriving market into which we sell. Noble Lords do not need reminding that the United Kingdom's exports and imports as regards the Community are around 60 per cent. of our total trade. There are £49 billion of exports. That is a lot of money. I hope that the wider single market will reduce the large deficit that we have had with the EFTA countries because that is where we are seriously in deficit.

The point has been made that the CBI is incorrect and unrepresentative in backing the ratification of the treaty and the early passing of the Bill. I simply do not think that it is unrepresentative of businessmen and, in particular, of industrial leaders. I know that there are some who take a different view. My noble friend Lord Sharp is one of them. I know that some financiers take a different view. Noble Lords will have listened to my noble friend Lord Alexander of Weedon last night. They will know the view that he takes. What the CBI wants is to have Ministers and its own representatives in on the discussions for further improving the arrangements of the single market and in on the discussions about economic policy.

The CBI does not want to be sidelined. It thinks that if we do not ratify, and ratify quickly, we will become marginalised. And that is not in the interests of British industry. The CBI is concerned too with improving the industrial competitiveness of the whole of Europe. It has rightly been said that the competitiveness of the whole of Europe with the rest of the world has been falling. So there is a job to do and we can help in that job. It has also rightly been said that our influence is very important, with the other countries of the Community and the Union, in ensuring that we are outward-looking and not protectionist and that we are really believers in free trade in the world. For all those reasons the CBI—and I join with them—want us to ratify and to be at the heart of discussions and negotiations.

My final points refer first to the referendum. My noble friend Lord Blake made an interesting speech advocating a referendum. The noble and learned Lord, Lord Wilberforce, was much more persuasive. I agree with what other noble Lords have said against the idea of a referendum. If we trust the people—that is one of the cases for the referendum—I do not understand why we do not have trust in those who voted to put the Conservative Party in again at the last election and who knew when they were voting that they were voting for a man who had signed the treaty and who, in honour and in the British interest, intended to ratify that treaty. Every Conservative Member of Parliament who stood in his support must have known that that was his intention.

Lastly, I would mention the danger both to Europe and ourselves of marginalising Britain at this time by failure to ratify soon. I hope that we shall not be misled into any reasons for delaying ratification. I hope that we shall ratify soon and put Britain back into a position to play its full part in the discussions for the future of the Union and for enlargement, and for taking such initiatives as seem right.

3.2 p.m.

Lord Thurlow

My Lords, it is a privilege to follow the noble Lord, Lord Aldington, at whose feet I have sat in various of your Lordships' Select Committees. In passing perhaps I may recall what the noble Lord, Lord Boston, said yesterday; namely, that in 1990 the noble Lord, Lord Aldington, presided over the ad hoc committee in the run-up to Maastricht in which a very powerful committee of 20 of the most experienced members of your Lordships' House—that is, experienced apart from my humble self because I was a very feeble Member—came up with conclusions which were largely reflected in the position that the Government took at Maastricht. The Maastricht Treaty contains little of which your Lordships' Select Committee was not in favour.

We all know that it has defects. It was a matter of negotiation. I believe that most of your Lordships agree that the Prime Minister and the Foreign Secretary achieved a resounding success at Maastricht in getting the concessions from our partners that have significantly changed the framework previously set by the Treaty of Rome.

In earlier speeches today there has been focus on the political aspects of the Community and the future Union. We have heard of the dark horizon of danger that now confronts Europe and the world. We have heard that it is imperative, in this dangerous situation, that our Government should once again be free to concentrate on these major political issues and to help to give a lead, with our partners, in constructive policies to avoid the worst catastrophes that can so easily emerge.

What is preventing the Government from getting on with that? It is the continued delay in getting Maastricht out of the way. So for goodness sake let us do all that we can in this Chamber to reduce that delay and to help to get early ratification. There is common ground on all sides in the debate in the conviction that the existing mechanisms and operations of the EC need to be improved. Of course they do. We inherited a framework that will take years and years to improve. Noble Lords have catalogued many of the aspects on which work has been done by our Government in the past in securing improvements, and they will continue to seek to do so. The difference lies over the means to achieve the necessary improvements. In each area of negotiation there has to be careful policy formation. Painstaking and long negotiation confronts us and our partners.

The opponents of Maastricht offer no practical alternatives and no practical policies. As my noble friend Lord Bridges suggested yesterday, presumably they want to delay ratification until new assurances, opt-outs or whatever, can be obtained from our partners. What a hopeless prospect! It is just not on. What we are really talking about is a means of delaying, of holding up the matter, embarrassing the Government and preventing them getting on with the work that really needs to be done in Europe. Only by the speediest possible ratification can this country start to repair the damage and get on with the real, positive agenda for promoting British interests to which the noble Lord the Lord Privy Seal referred at the end of his speech yesterday.

There is now an opportunity in Europe. The tide of centralising is ebbing. We know that in both Germany and France attitudes have changed; that it will continue to take everything that we can muster to press the Anglo-Saxon case for greater democratic control and accountability. Those are words that we understand in our bones because our history has forged the institutions that make them a reality. Our major European partners do not share that history. They are used to bureaucratic government. How are we to gain support for the policies that the Government are no doubt preparing, with an eye on 1996, to improve the working of the Community? That can be done only by gaining the support of our partners.

Let us then stop indulging in dreams and illusions of outdated notions of sovereignty and independence and get on with what we are best at, which is practical work in the real world. The noble Lords, Lord Carrington and Lord Pym, indicated the way ahead. The noble Lord, Lord Cockfield, and the noble and learned Lord the Lord Chancellor helped to prick the balloon of the exaggerated distortions of the significance of the changes in the Maastricht Treaty. It has been shown that the Single European Act contained most of the seeds that sprouted at Maastricht.

Let the Government get on with the serious and challenging tasks that lie ahead to promote British interests by restoring our influence with our partners. There is a hard struggle ahead. It will never be a pushover. At Maastricht we had a great success with our partners. We cannot expect to achieve all our objects quickly. It will take years of effort, as the noble Lord, Lord Thorneycroft, said. We may fail at first, but if we work at it, make and keep friends, and build up our influence again, the Union framework can gradually be modified to satisfy our proven principles of democracy.

By supporting the Government in speedy ratification and rejecting the specious attractions of a referendum, this House can show that patriotism can best be demonstrated by pragmatic, positive policies rather than by striking gestures of independence and feeding illusions of restoring our powerful past. That has gone. But we can play an invaluable international role in helping, with our partners, to pilot the way to a constructive wider European future as a major world influence in concert with our Atlantic partners.

3.13 p.m.

The Earl of Donoughmore

My Lords, I submit to your Lordships that the underlying problem for people in this country, which is so divided on this subject, relates mainly to what has affected people personally, which is the increasing meddling in people's lives and in the businesses and other institutions of this country which is arising from the activities of the European Commission.

The Commission is, of course, unelected and such controls as there are on it have just not worked. If we ratify Maastricht, the Commission will have very much more power and people are, I think, genuinely worried that that extra power will mean much more meddling even than now. As I have said, the Commission is out of control. That is something which needs addressing, although it is not directly relevant to the Maastricht Bill itself except that the Bill widens the scope for such interference quite enormously, including in the areas of defence, foreign policy, asylum and many others that have been mentioned in the past few days.

Our Prime Minister did a wonderful job, in my opinion, at Maastricht in the sense that he negotiated the opt-outs and other things as best as he possibly could to satisfy the voters at home. However, I am afraid that those opt-outs and improvements are a little bit of an illusion. I do not believe, for example, that the terms of the subsidiarity clause will prove to be very effective. The noble Lord the Lord Privy Seal mentioned yesterday that the subsidiarity clause, which we have not yet passed, is already working and that the Commission has submitted about half as many new propositions in the past year as previously. I submit that that is a bit of an illusion because it is merely holding back in the hope that we will ratify in the first place. In the end, whatever the text may say, the opt-outs are really delays. If seven or eight countries have a common currency, do not your Lordships think that the pressure on us to join would become irresistible? It was with the ERM, and we joined it—and look at the trouble that we had from it.

I submit that one of the problems in all the discussions on Maastricht is that there are some hidden unstated assumptions with which we would not all agree. One is that there is a "Community spirit" and that each member should be prepared to forget his own interests in the interests of the Community as a whole. I suggest that that is a totally false assumption. I cannot think of any country which has genuinely behaved in that way. Each country fights its own corner, and the smaller, poorer countries have done wonderfully well out of the system. They get extra money or concessions in exchange for supporting a particular policy, but that is not "Community spirit", that is horse-trading. When genuine sacrifices are proposed, the volunteers suddenly become much fewer than 12 in number. I can think of one or two cases where there were only about two. How many countries sent troops to the Gulf or to Yugoslavia? Certainly not 12.

Another assumption is that any country that does not want to take a step forward by signing the next treaty in the series is a backslider and is somehow breaking the rules of the club by not signing. I cannot see why that should be. If there is always to be an obligation (moral or otherwise) to sign the next treaty just because we have signed the one before, where could it all end?

Perhaps we should vote for Maastricht. There are many advantages in it and there are many disadvantages. However, one thing which worries me considerably is how the Bill got through the other place. We saw awful things happening there in my view—Whips twisting arms, party manoeuvrings and Members voting against principles in which they apparently believed in order to get other provisions through. That does no one's reputation any good and merely reduces the activities of Parliament to something which the country derides. It was truly sordid in my opinion, and very sad to see. The arguments did not hit the papers as much as did all the tactics. That must be bad.

As all parties were in favour of the Bill, according to their election manifestos, the voter has clearly had no chance to have a say. In that other House neither did Members have a real chance to have a say. They were dragooned. This House has many functions, probably many more than a backwoodsman like myself knows. I believe that one of its most valuable jobs is to make that other place, and the whole country, think twice before making a major commitment. The commitment that we may be about to make is not one upon which we can afterwards go back. This Government have recently gone back on one or two decisions they have made on other subjects. I applaud them for making corrections and admitting their mistakes, but they will be unable to change this one. So the country needs to think very carefully before signing Maastricht.

The country is clearly deeply divided. Other European countries were clearly deeply divided as the referenda in those countries which permitted them have shown. At least 40 per cent. in each country wanted not to sign. The matter must be settled. We cannot go on arguing about it in this country. The argument has already lasted something like 18 months. As the Government did not allow a free vote in the other place, and presumably will not allow one if the Bill goes back there, I can see no way of settling the matter satisfactorily except by a referendum. That is something that I regret, because it means a further delay, but perhaps of two or three months only.

If voters in a referendum were to vote to ratify Maastricht, fair enough. But they might reject it. If they were to reject it, we would have to renegotiate and be part of that slow train which has been mentioned so often. I wonder whether that is such a terrible thing. What would have happened, as I said earlier, if we had not entered the ERM when we did? I believe that most people would agree that our recession would have been shorter and less severe, and our present job shortages and monetary difficulties would have been less bad. If we opt now to go slower, that may be a true advantage. I am in favour of being a Community member, but against ratifying Maastricht in its present form, at least until the country has had its chance to have a say.

We should do what we can to allow the voters of this country to settle the issue, as they have done on other major topics of a similar nature in the past. The Government have their problems at the moment. Granting a referendum would help to solve some of those problems and take some of the pressure off them. It would, after all, be a genuinely democratic thing to do.

3.24 p.m.

Lord Stoddart of Swindon

My Lords, it gives me the greatest of pleasure to congratulate the noble Earl, Lord Donoughmore, on his maiden speech. It was made obviously from a background of great knowledge, experience and understanding, not just of the Maastricht Treaty but of the whole edifice of the European Community: what it means; what it does; what horse trading goes on; and how in many respects it damages our trade. I hope sincerely that he will make many more speeches. If the speech that he has just made is of the quality that we can expect of backwoodsmen, please, backwoodsmen, let us have many more of you in the House! I congratulate him once again, and I hope that the House will hear from him on many future occasions.

I do not intend to go into the minute details of the treaty. I trust that there will be adequate time to do so at subsequent stages of the Bill. The treaty is called the Treaty on European Union, but unity is the last thing that it seems to be about. Those who signed it cannot agree whether it is a federalist, centralising treaty, or a decentralising anti-federalist treaty. Mr. Hurd and the Prime Minister believe the latter interpretation, whereas Herr Kohl and Monsieur Mitterrand believe the former. Unfortunately for Britain, the Kohls and the Mitterrands always have their way. Perhaps it is because they, unlike Mr. Hurd, read and understood the treaty before they signed. As Herr Kohl and Monsieur Mitterrand smell the blood of British ratification, they are already demanding more—not in 1996, but in 1993.

The treaty has also apparently shattered unity at home. The Tory Party is riven by strife over the treaty and its implications. The Opposition—let us make no mistake about it—themselves are also split. Because there is an all-party Front Bench consensus over the treaty, and a refusal by the Government and Opposition to have a referendum, there is a huge divide between political leaders and the people.

The British people feel only resentment, because they have been refused a say about how they should be governed in the future—let us make no mistake about it, that is what it is all about—and whether they should become citizens of a new state to which they will owe a duty. The noble and learned Lord the Lord Chancellor outlined the position of the Queen. He said that the Queen's position would not be changed; that she would be acting on the advice of her Ministers. But of course the advice of her Ministers is no longer their own advice. It will be the advice of the Queen's Ministers tempered by the advice of 11 other foreign potentates. They may indeed be giving advice with which they do not agree—for example, on the 48-hour week—but they will have to do it, because the 11 other potentates have said that they must. So the Queen becomes a vassal Queen of a vassal state.

A Noble Lord

No, no!

Lord Stoddart of Swindon

My Lords, oh, yes! Your Lordships should think about it, because the Queen will no longer be sovereign in her own land, for the reasons I have just given. Furthermore, ordinary people cannot see how the treaty, and the extension of the power of the European Union over decision making, helps them or the country. What they have seen of EC membership so far is only adverse—a trading regime in which Britain has a total balance of payments deficit on manufactures, as my noble friend Lord Tonypandy pointed out, of £81 billion. That is the figure—make no mistake about it. My noble friend was modest in talking about £13 billion in contributions across the exchanges. In fact our net contribution since we joined the Common Market has been £21 billion to assist developments in other countries which are denied to our own country; a new army of officials imposing vicious regulations which close down thousands of businesses; a farming regime which drives thousands and thousands of farmers from the land and keeps up food prices; and a fishing regime which not only causes many fishermen to be bankrupted and which tells those who are left in the industry how many days per year they can put to sea but drives them to desperate measures of blockading ports and occupying MAFF offices.

That is the situation which the people see. The only offset offered by the Euro-cranks against these and many other adverse consequences is that 50 per cent. of our non-oil trade is with the EC. But even this so-called benefit is questionable since the great trading opportunities of the future are likely to be in China, India, Japan, the Pacific rim and the Americas rather than at the failing heart of Europe. Despite all that, the Europhiles, including the Government, keep bleating about the need not to miss the Euro-train. But this Euro-train is being driven by Germany and France to a destination where the Government, not me, say they do not want to go; that is, a federal or unitary centralised Western European state. So why are we being urged to board that train? Are the Government gutless, tricky or just plain stupid? Or is there a hidden agenda that nobody has yet been able to fathom? One thing is absolutely certain; the British people are deeply suspicious of the treaty, its effect and the motives behind it.

I am the chairman of the Campaign for an Independent Britain, which is an all-party and cross-party organisation. It has Members of both parties and of no party from both the House of Commons and the House of Lords. Since the Maastricht Treaty the central membership of the organisation has quadrupled and branches now operate in many parts of the country. It is not only older people who are members; many young people are joining. I shall quote briefly from a letter which I received from Mr. Daniel Hannan, the chairman of the Oxford University branch of CIB, which is the second largest political grouping in that university. There are branches in other universities. He stated: Contrary to the specious lie perpetrated by the media, people under 25 are passionate believers in democracy and in self-government… This generation wants exactly the same heritage as that into which every previous generation has come: a polity administered by its own representatives, and a way of life based upon its own values". I doubt whether any Members of this House could have put it any better.

When I say that I am the chairman of the Campaign for an Independent Britain I find that the political sophists and the narrow elite who make the big decisions say, "How quaint". Yet these are the very same people who have demanded and are demanding independence for Latvia, Lithuania, Poland, Czechoslovakia, Croatia and even Bosnia, which has virtually never been a sovereign state. It really is odd that all these countries and a host of others should be thought capable of being independent and having an independent existence but that Britain can exist only in interdependence. What is the matter with this country? Is it the people of this country? I do not think so. I think that it is the leaders of this country who are undermining the confidence of the people of this country. If all those other countries can be independent, co-operating certainly, that is what we want as well.

I fear that we are seeing—and the speeches that I have heard appear to underline it—the birth of a new blocism driven not by the needs and desires of ordinary folk but by a combination of political big business and banking bureaucracies. Such a prospect is frightening not only because giantism and centralisation usher in superbureaucracy and drive out democracy, but also because they engender super rivalries which can in turn lead to super conflicts. One would have thought that the cold war of the past 45 years between the USSR and the Western powers would have made us wary of creating new power blocs.

Despite what has been said, this House has no less a duty than the House of Commons to examine this Bill in the closest detail. We should be able to do so in a measured way and should not be bullied and harried by the Government and the usual channels into rushing the Bill through your Lordships' House to suit the timetable dictated by Chancellor Kohl and M. Mitterrand and their minion, the Belgian presidency

Noble Lords

Hear, hear!

Lord Stoddart of Swindon

My Lords, oh yes, you are having it all this afternoon! We have seen too many Bills pass through Parliament without adequate consideration and a failure of the Government to listen to dissenting views, and we have seen them have disastrous consequences when put into operation. A little while ago the noble Lord, Lord Thurlow, said, "Let's get the Bill out of the way". I understand that the noble Lord, Lord Howe, said that the rearguard action being mounted by Euro-sceptics is damaging to Britain. I am of course reminded of the Single European Act. We have heard so many people criticising the noble Baroness, Lady Thatcher, for that Act. I did not support it; I spoke and voted against it. But of course it was thrust through another place on a guillotine motion and it went through this House on Fridays when practically no one was about. Now everybody says, "That was the Act which gave away our sovereignty". So ought we not to be very careful about pushing through this House measures which may do what the Single European Act has done, according to so many supporters of the EC? Let us be very, very careful. I shall not mention the Criminal Justice Bill in case I embarrass some of the Members opposite and perhaps Members in my own party, too!

But this Bill, which has far-reaching constitutional implications, must be properly discussed by this House. Above all, this House can put itself on side with the people by demanding that they should be consulted before the Bill is finally approved. If this House passes an amendment it is not saying to the House of Commons, "You must agree to a referendum"; it is asking the House of Commons to think again. If we cannot ask the House of Commons to think again, what on earth are we doing here?

Noble Lords

Hear, hear!

Lord Stoddart of Swindon

My Lords, we might as well pack up because we shall only be using the facilities of the car park, the bars and the dining room. And I do not see why the people should pay for that unless we are doing a useful job. Therefore, let us forget the idea that we are not entitled to ask the House of Commons to think again.

I heard the noble Lord, Lord Jenkins, and, unfortunately, my noble friend on the Front Bench today, saying that it would be bad if we had a referendum just now because the Government are in bad odour and people would vote against the treaty because they would be voting against the Government. Let us suppose that the Government were in good odour and highly popular. Would my noble friend and the noble Lord, Lord Jenkins, change their minds and say that we should have a referendum? I sincerely hope not because that would be most disreputable. Those are the facts. We are entitled to have a say and are entitled to pass an amendment.

I suppose that the most amazing thing, and what surprised me most of all, was to hear the noble Lord, Lord Jenkins, and the noble Lord, Lord Holme, last night say that the Liberal Party do not believe in having a referendum. I say that because I live in Reading which is just on the borders of the Newbury constituency. Of course, I received reports of the recent by-election there. I heard that the Liberal Party were in the van of the call for a referendum on Maastricht. Therefore, this morning I telephoned to see whether there is written evidence of that; and indeed there is. In the Liberal Party publication Focus issued in April 1993 which was delivered to 43,000 homes in Newbury just before the by-election—

Baroness Seear

My Lords, both in the House of Commons and in the Liberal Party as a whole, the question of a referendum has been left to a free vote.

Lord Stoddart of Swindon

My Lords, I am pleased to hear that. However, the noble Lords, Lord Jenkins and Lord Holme, were speaking from the Front Bench. Therefore, we can be forgiven for believing that that is official Liberal Party policy.

Perhaps I may quote from the publication. Page 3 states: We need a Maastricht referendum—some people think we should be playing a strong part in Europe. Others think we should have nothing to do with our European neighbours. But whatever your point of view most people agree that the final choice should rest with the people of this country. This is not a decision which can be left to the politicians shut away in Westminster. So it is no surprise that David Rendell", who was the candidate and who is now the MP, is leading the local campaign for a referendum". Mr. Rendell said: We should insist that our fellow citizens make up their own minds on such a fundamental issue". I shall not continue much longer because it is embarrassing, but the article goes on: Why is it that John Major will not give full facts about the Maastricht Treaty to the British people and let them make up their own minds? Does he think they are too stupid? That concludes the final lesson.

Finally, as the true intent of the Bill is understood through deep and detailed discussion in your Lordships' House I hope sincerely that your Lordships will realise that unless the people give their consent to this measure—a measure which has such enormous implications in regard to the way in which we are governed and the way in which the people are governed and for their living standards—the Maastricht Treaty and Europe will never stick.

3.45 p.m.

Lord Rees

My Lords, the noble Lord who has just sat down covered so very many points that I hope the House will forgive me if I do not attempt to pick up any of them. Perhaps I may adopt his earlier metaphor and say that at a certain point I am afraid that I rather lost the scent and to cast around may take a little time at this late stage of the debate.

I congratulate my noble friend Lord Donoughmore on his contribution. I am sure that we shall listen in future debates to him developing his rather special views at greater length. I congratulate also my noble friend Lord Amery for a particularly felicitous speech. It was good of him to remind us of the genesis of the European ideal in this country. He took us back to an earlier Sunday afternoon at Chartwell when Sir Winston Churchill perhaps formulated it in the most attractive and statesmanlike terms.

I wish that on subsequent occasions in the decade thereafter we had adopted a more constructive and imaginative posture in relation to the European Community than we did. I believe that my noble and learned friend Lord Rawlinson touched on the negotiations at Messina. It is a pity that we dismissed them as generating a European fantasy which was likely to dissolve when faced with the harsh realities of modern life. How wrong we were or how wrong were those who advised us.

As the Community developed in vigour and stature, we attempted to address or recover the situation by suggesting that its role should be limited to that of a free trade area. Not surprisingly, again with the advantage of hindsight, that demonstrates the lack of sensitivity which we adopted in those days to the aspirations of the European Community. The founder members would have nothing to do with the European Free Trade Area and again we were one of the first to abandon the concept when we saw that there was no advance on that front. In a sense our judgment has been confirmed by the surviving members of the free trade area which have now decided, almost totally, to throw in their lot with the European Community. It seems to me that those who are arguing most vigorously against the Treaty of Maastricht in this debate, in another place or outside Westminster altogether, are really harking back to a very limiting economic concept of that kind. Those of us who can recall, as I vividly recall, the debates on the Bill introduced into Westminster in 1972 to confirm our adherence to the European treaty will recognise that we were then debating it not in terms of a purely economic concept but of an economic and political union.

Lord Harmar-Nicholls

No, no.

Lord Rees

My noble friend will have an opportunity to speak later. He may have adopted a different view. I am afraid that I have not done him the courtesy of reading his contributions to the debates in Hansard.

Lord Harmar-Nicholls

I resigned.

Lord Rees

Well, my noble friend took an extremely honourable view. But the fact that he had to resign shows perhaps that he was not in sympathy with the majority of our party who saw the Bill to a successful conclusion. How grateful we were to my noble friend Lord Pym, who had the extremely difficult job of whipping us, in not too unfriendly a fashion, into the Lobbies on that occasion.

At that time we debated all the implications and possible developments of a European Community as it was then conceived. I beg to differ from my noble friend Lord Harmar-Nicholls because I would say that most of us saw it not just in terms of an economic community but rather as an economic and political grouping.

We touched on the subject again in the referendum in 1975. To those noble Lords who now advocate a further referendum I ask how many times we must go to the country to fortify our own judgment on this issue. Is the difference now so considerable that we are obliged to refer back to the electorate of this country? Indeed, is it really consistent with the constitutional practices that we have normally followed? It seems to me that referenda so far have been either a very slightly shabby political trick designed to solve problems and not necessarily the main issue submitted to the electorate, or reserved for—dare I say it?—my compatriots in the Principality of Wales on such issues as the opening of public houses on Sundays.

One noble Lord said that it would be relatively easy to devise the questions which should be submitted to the electorate, if we were minded to force the Government to offer a referendum to the country. I believe that it would be extremely difficult to find one simple, clear constitutional issue on which my noble friend Lady Thatcher suggested that a referendum was acceptable. She explained her reason for perhaps resiling a little from the position that she took on earlier occasions.

What single, simple constitutional issue emerges from the Treaty of Maastricht? For example, and at the risk of oversimplifying it, if I happen to be in favour of subsidiarity but against all the other provisions of the treaty, how do I vote in a referendum? That is something for which we must assume full responsibility in our capacity as legislators both here and in another place.

We have had another opportunity to consider the implications of our membership of the European Community, as has been pointed out by many speakers. I refer to the passage of the Single European Act. I hope that some noble Lord or noble Baroness who is proposing to speak later in the debate who was, perhaps, a member of the administration that commended the Act to both Houses of Parliament will explain how he or she was able to support the Single European Act but now recoils with horror and outrage from the Bill before the House today.

Again, like my noble friend Lord Cockfield, I too turn to the Stuttgart Declaration, which was exquisitely termed. It was designed to deepen the political and economic capacity of the European Community. It is clear—perhaps this will reassure my noble friend Lord Harmar-Nicholls—that the conceptions underlying the Community have broadened and deepened.

Perhaps I may turn to the Bill before the House. I believe that it follows naturally from all the various incidents which which I have perhaps wearied the House over the past few minutes. There is nothing of startling novelty; indeed, there is nothing of unique political consequence with which we should concern ourselves. However, be that as it may, we will have the chance to debate it at great length. No doubt we shall have a long Committee stage. Like most of us, I know that the noble Lord, Lord Stoddart, will not be one to be badgered or cajoled on those occasions. We shall be able to apply our individual judgments to the issues. I hope that we shall reach the conclusion that the Bill will see useful amendments. We should give credit to my right honourable friends the Prime Minister and the Foreign Secretary for bringing back from the negotiations something which will serve the purposes of this country well.

However, that is not to say that that will be the end of all further development of the Community or even all further debates about the nature and the development of the Community. It would be impossible to thwart the development of an institution like the Community at that particular stage—in other words, to freeze it. If that happened, I suspect that it would wither away like earlier European institutions such as the Holy Roman Empire which became an archaic recollection of the past.

We must envisage the possibility that the Community will develop. As the noble Baroness, Lady Blackstone, very properly reminded us, we must envisage the possibility that it will be necessary from time to time to amend the imperfections that show themselves as the years go by. But there will also be many major issues to which we shall have to address ourselves inside the institutional framework with which we are concerned. For example, we shall have to take account of the adherence of countries of Central and Eastern Europe. We must reflect upon the powers —and, indeed, the powers of initiation—of the Commission. If my noble friend Lord Donoughmore will allow me to correct him, the Commission has very limited powers of imposing its decisions on the Community. That must, at any rate for the foreseeable future, remain a matter for the Council of Ministers. However, I believe that it is right to reflect on the role of the Commission. It is possible that it has slightly exceeded over the past few years the conventions under which it operates.

We must also reflect—and here I agree with the noble Lord, Lord Thomson of Monifieth—on our relations with the European Parliament. We must reflect whether relations between the national legislatures and the European Parliament, especially between our own legislature and the European Parliament, are sufficiently close or sensitive. I have always felt that it would be right and proper to consider how we could somehow incorporate at least the British members of the European Parliament somewhere within the Palace of Westminster. In that way, they could get a little more closely the flavour or our debates and we could, perhaps, hear a little more directly what led them to some of the conclusions they reached.

When the Bill is passed, as I am sure it will be, I hope that each subsequent move to closer economic, monetary and political union will not generate another thrill of outrage and horror. I hope that we have moved beyond the earlier stages of our reception to the European Community and that we recognise that we are now central members of the Community and must continue to play a central and important part in it. I am bound to say that we are in danger of becoming the bores of Western Europe, living in the afterglow of the Victorian Empire. Before I generate any reaction, perhaps I may say that I personally enormously regret the passing of the empire. However, that is another question.

It is worth recalling that there are at least two other members of the European Community that are nation states of equal antiquity to our own; namely, France and Spain. They probably cherish many of their institutions in the same way that we cherish ours. I speak, I hope, with suitable deference and respect. All our institutions—the monarchy, the legislature and the Bank of England; noble Lords may well be able to think of many others—will have to adjust in time and in some measure, as they have done successfully in the past. We must bequeath to subsequent generations a worthwhile role for this country in the councils of Europe where we rightfully and by history belong. We must not sit sulking in our tents as ineffectual watchers of the tide of European events which we have put it out of our power fundamentally to affect.

3.58 p.m.

Lord Hunt of Tanworth

My Lords, today's debate is very special. We have been most fortunate in having two such distinguished maiden speeches. I congratulate both speakers. I feel rather like the not very good middle order batsman who suddenly finds himself playing not in a team or a match of 22 but in a match of over 100. With all the stylists who have gone before me and those who will follow, I think that a middle order batsman should make a short innings and a quick retreat to the pavilion on the Cross-Benches.

However, it seems to me that those of us, like myself, who argue for ratification of Maastricht, have something of a dilemma in pressing both the soft pedal and the loud pedal at the same time. The soft pedal suggests, as the noble and learned Lord, Lord Wilberforce, reminded the House yesterday, that there is no great constitutional quantum leap involved in Maastricht. As others said, putting it in less exalted language, it will all turn out differently on the night anyhow. On the other hand, the loud pedal indicates that it is vitally important to ratify the treaty. The dilemma is that both are right.

The treaty does not involve a quantum leap. Many aspects will turn out differently from how we envisage them now. It is clear that economic and monetary union will not proceed at the pace and exactly in the way expected. It is also clear that ever closer union means different things to different people. Again, the noble and learned Lord, Lord Wilberforce, rightly reminded us that that is a word which has been used in treaty language for some time and which to most people means no more than doing more together and doing it better.

The Community has always proceeded by setting goals. Those goals are not necessarily realistic and will not necessarily be achieved in precisely the way envisaged but they are part of the process of keeping the show on the road, or, to put it more elegantly, taking part in the construction of Europe and learning from experience. That is the soft pedal: the changes envisaged by Maastricht are less significant than they seem and certainly in terms of sovereignty are very much less significant than is argued by some people.

I also believe that the Community is at a crucial stage of its development. The EFTA countries are knocking on the door, and the countries of central Europe are not far behind them. Those of us who took part, under the chairmanship of the noble Lord, Lord Aldington, in the recent inquiry into the enlargement of the Community were left in no doubt about the wish of those countries to participate in the sort of Community which is being formed. It is vital to our interests that we ensure that that developing and enlarged Community is decentralist and non-protectionist.

Yesterday the noble Lord, Lord Sherfield, reminded your Lordships of Messina. We would be crazy if we believed that we could bring the ratification process to a full stop and then play a leading role in devising what should replace Maastricht or in the next inter-governmental conference on the structures of the Community in 1996, or secure all the advantages and fair play that we wish to see in the single European market.

Maastricht is not a perfect treaty, although I believe that it represents a significant advance in many respects. With the various opt-outs which the Government negotiated, I believe that it is fully acceptable.

To me the more difficult question is that of a referendum. One always hesitates to argue against something which seems thoroughly democratic. I do not argue against it solely on constitutional grounds, although it seems very strange to have a parliamentary system and then pop in a referendum occasionally to solve what are usually internal party difficulties. If one has a constitution like that of Switzerland in which the referendum plays a normal part the position is quite different, but I believe that one has to have one system or the other.

I would not argue against a referendum solely on the grounds that it is slightly bizarre for an unelected House to press an elected House to have a referendum. I would not even argue against it solely on the grounds of practicality, although I believe that the grounds of practicality are very serious. It is not merely a matter of how one frames the background to the question. One cannot simply ask whether people want Maastricht or not; one has to provide some background information. One also has to find a way of detaching the voter from all the other aspects, such as whether he likes the government of the day, whether he is feeling good or whether or not the economy is in recession. One saw that clearly in the case of the French referendum in which a large proportion of the "No" vote was not against Maastricht but against President Mitterrand.

The final point which I add to those is the volatility of public opinion, as evidenced in public opinion polls and in particular in the two Danish referenda, in which public opinion changed. Public opinion is a good guide to short-term issues, and where one is electing a government which can be thrown out, public opinion plays a decisive role. However, on a matter which is so complicated and of such long-term importance as the structure we are trying to build in Europe, I believe that Parliament should do its duty.

I hope that this House will pass the Bill rapidly. I emphasise the word "rapidly" because I feel that what is happening in certain quarters at present is bad for politics in this country and for our negotiating stance abroad. Therefore, I hope that the matter will be dealt with quickly.

4.6 p.m.

The Earl of Bessborough

My Lords, I have been advocating greater European integration for many years. I did so before the Second World War, when I supported those who were thinking about European union. I even supported some who believed in the creation of a world government, like the first Lord Attlee, who I felt was my friend. He was almost my only friend on that issue. That was when I worked in the League of Nations secretariat in the late 1930s.

After the Second World War I was a strong supporter of a United States of Europe as advocated by Sir Winston Churchill. However, whether Churchill would have endorsed Britain's entry into the Common Market is another matter. In his admirable speech, my noble friend Lord Amery made some interesting remarks on that question.

At that time I was secretary in our embassy in Paris and as such went to the very first meeting of the Consultative Assembly of the Council of Europe in Strasbourg. That must have been some 45 years ago. In the late 1950s and early 1960s I advocated greater European integration in speeches in your Lordships' House, and in particular European technological co-operation.

Then in 1963 I became Parliamentary Secretary to my noble and learned friend Lord Hailsham when he moved back to another place. I became his spokesman in your Lordships' House—a difficult task. I continued to use the same arguments for European integration while an opposition spokesman on science and technology as well as certain aspects of foreign and Commonwealth affairs, including Europe. After being a Member of the European Parliament I joined the European Communities Committee of your Lordships' House, recently so well led by my noble friend Lord Aldington. In view of that background, I do not wish to delay your Lordships too long in consideration of the Maastricht Treaty as it was specifically revised in Edinburgh.

I emphasise that I strongly support the views of my noble and learned friend the Lord Chancellor as well as those of my noble friends Lord Amery, Lord Thorneycroft and Lord Carrington, and my noble and learned friend Lord Howe of Aberavon and my noble friend Lord Whitelaw, to say nothing of those of the noble Lord, Lord Healey. I fully endorse what the noble Baroness, Lady Young, said. I fully endorse, too, the views that my right honourable friend Mr. Hurd expressed at Chatham House at the end of last month on the need to continue to play a pivotal role in European and global diplomacy and stressing that our partners in Europe, the United States and Japan expect that of us. There is no doubt that we in Britain must support a liberal outward-looking Community which acts as one in the world.

I agree with all that my right honourable friend the Foreign Secretary said about the completion of the single market, and the opening of enlargement negotiations with Austria, Finland, Norway and Sweden and the negotiations on agreements to prepare the way for possible future accession with, say, Hungary, Poland, Slovakia and the Czech lands which I shall be visiting later this week for a meeting with President Vaclav Havel.

But above all I must repeat that I strongly support and endorse our Foreign Secretary's views when he said that it is time to lift our eyes from the trenches and that we do need to show the British people that our membership of the Community brings solid advantages and opportunities for them.

I also agree with my right honourable friend when he says that we must start work preparing our ideas for the 1994 elections to the European Parliament. I feel very strongly about that. I shall not go into detail now because it is late in the debate. However, I was vice-president of the budget committee and of the organising committee of the Parliament. I was its first British vice-president. We must start preparing our ideas for the next review of the treaties in 1996.

I concur, too, with my right honourable friend Mr. Hurd that once the Maastricht Treaty has been ratified, the three main parties in this country will have a large expanse of common ground on which they can unite around the vision of a decentralised, wider, free-trading citizenship of Europe.

It is only too true that the world is full of problems beyond the scope of individual nation states. I sincerely believe that through working with our partners in the Community, we stand a better chance of tackling them successfully.

Whatever your Lordships may think about the social chapter, I believe that we must ratify the Maastricht Treaty. I was glad therefore to see from press reports later last month that now President Delors seems to accept that high social costs are an important factor in the European Community's high and rising levels of unemployment. I very much support the view that positive British ideas, as expressed by my noble friends who have been in the Foreign Office, can have a decisive impact on the future development of the Community.

Again, I seek to endorse what the Foreign Secretary said in his article last month after the Danish referendum; and I hope very much that the Germans, when a court decision is out of the way, will also ratify the treaty. Let us therefore support ratification as soon as possible and as rapidly as possible, as the noble Lord on the Cross-Benches said. Let us not delay progress by urging the need for another referendum. I took part in the first referendum in 1975. I thought that the noble Baroness, Lady Blackstone, made good points, as did the noble and learned Lord, Lord Simon of Glaisdale, and my noble friend Lord Whitelaw. I certainly agree with my right honourable friend the Prime Minister that Britain should be at the heart of Europe.

4.16 p.m.

Lord Dormand of Easington

My Lords, I am opposed to the Bill, in the first place and most importantly, because it will lead to a federal united states of Europe. Of course, there is nothing wrong in principle with federalism, but I do not believe, quite sincerely, that it would be applicable in this case. It is not just the sheer size of such a state, although that is a factor. More importantly, it is the huge variation, the diversity of the cultures, history and languages involved. A true and effective federalism cannot exist in such circumstances. It simply would not work and problems of all types would arise from it.

I stated that size was a factor. There is no doubt in my mind that the size of the European Community is a major factor in the massive corruption and fraud which now take place in the Community. The sheer volume of governmental machinery makes realistic control impossible. Few people who voted in 1975 to stay in the EEC (as it then was) would have conceived of the development which has taken place since that date. It has changed fundamentally over the period.

There are leaders in Europe—M. Delors may be the best and most obvious example, but there are others —whose explicit aim is to have a federal state. However, I am concerned that federalism may come about willy-nilly because of some of the developments which are now taking place. Some people, for reasons I find difficult to understand, seem to avoid the important aspects. But the single currency and the single bank are surely the central issues of the treaty. I am not sure that those two matters have been sufficiently discussed, fundamental though they are. However, I am sure that another aspect has not been properly debated: that is, the common citizenship which is in the treaty. That is an issue of great importance. My feeling and experience of it are that few people in this country would welcome it.

I wish that noble Lords could see the volume of correspondence that I have had with a man whose life appears to be taken up with the belief that his allegiance to the Queen is being destroyed by the way matters are going in the EC. That is a perfect illustration of the point raised by my noble friend Lord Stoddart of Swindon. I am sure that it is an indication of the way many people feel.

There may well be some support in the European Community for a federal state, although the Danish and French referenda do not show overwhelming support. But if the British people were to be faced with the facts, I doubt whether there would be much agreement with such an objective. That is one reason why we should have a referendum on the issue, a matter to which I shall turn in a few moments.

The economic and monetary union proposals in the treaty will bring about a massive shift of power over fiscal and monetary policies from democratically elected government to undemocratic Community institutions. Would it not mean that the Commission would have the authority to control and punish—I have read that in some documents—some elected governments who spend more on and borrow more for public services than is allowed under the arbitrary amounts laid down in the treaty? I fail to see how a Tory Government could agree to that, let alone a Labour Government.

The Community institutions would have a veto over the economic policies of elected governments, and economic policies inevitably include political decisions. I cannot believe that if our people were to understand these points they would accept them. Of course, some people will say that fears about federalism are unfounded: is there not this new concept of subsidiarity? It will ensure, they say, that things must be done on a national level which can best be done at that level. That definition of subsidiarity was given in another place on 12th May last year by the Prime Minister. It sounds good, but there are a number of points which might be made about it.

First, who is to decide what is done better at national level? The definition given by the Prime Minister is not one that is in the treaty. As I understand it, there is no definition of "subsidiarity" in the treaty, so that is an immediate difficulty. It is likely, I suppose, that if there is a dispute on the matter it will be resolved in the European Court of Justice. The fact that it would be dealt with by a European Community institution does not inspire me at least with confidence.

My final comment on subsidiarity is unscientific and irrational. It is that I just do not believe what is said about it because of the tremendous movement towards centralisation which has taken place since 1975. That centralisation, which grows apace almost daily, deals with everything from major decisions to trivialities. I have to say that the trivialities cause me anxiety and I am interested that, so far as I am aware, the matter has not yet been raised in the debate.

A few examples are the labelling of bottles and cans; the shape of some products; the amount of water—this is a good one—to be used in one flush of the lavatory. I had better say that I had some experience of that recently. The standardisation of some articles may be good, but regulations for 12 countries to be decided in Brussels?—preposterous!

At the last meeting of a development corporation of which I am a member we were told that a new EC directive had to be implemented. Would it not, we asked, take longer and require more staff, even though it was being done perfectly well? "Yes", was the answer, "but it has to be done".

One could go on with further examples but I find the whole business of that kind of control not only ludicrous but nightmarish. I am sure that some of the directives emanating from Brussels have a beneficial effect, but it is manifest that some are silly, bizarre and completely unnecessary. Perhaps the most important point is that they will in some cases bring the whole system into disrepute.

I turn to the question of a referendum. I am no lover of referenda, but where a major constitutional matter is concerned I believe that it is right to put it to the people. It was certainly right to put our membership of the EEC to the people in 1975. I believe that the present situation is even more important than 1975. I repeat what I said earlier because it is important. Most people who voted to stay in the Community in 1975 were not voting for the developments that have taken place in the 18 years since that referendum. All the evidence suggests that the electorate wants to have a referendum. I think that is the position because people realise that we are on the verge of momentous changes.

I find it arrogant in the extreme that some people say that the electorate does not and cannot understand what it will be voting for. Over the years I have come to respect the instincts of the British people. There are complex matters in the present situation; it would be foolish to deny that. But there are certain fundamental principles which are plain for everyone to see on which the voters ought to be heard. I also have to say that a referendum campaign would clarify many of the matters. It would be an education in the best and broadest sense.

I do not think that the people of this country want referenda every other week. They believe that most issues can be left to Parliament. Major constitutional matters, however, are the concern of the voters and none could be more important than what is happening now in the EC. I urge the Government to give the most serious consideration to the proposal.

I have heard all the arguments for not having a referendum and, indeed, I have used them myself in another place on a number of occasions. They are persuasive and my noble friend Lady Blackstone put them most eloquently today. However, some issues require a referendum. I say immediately that it is a matter for personal judgment and I make my personal judgment that in this case it is necessary at this time.

Perhaps I may refer briefly to an incident which may be an illustration of that. I was rushing to catch a train recently which was just pulling out of the station. I opened the nearest carriage door and jumped into the corner seat. When I had settled myself down—it was one of those closed compartments—I saw a sticker on the window which said: "This compartment reserved for patients from Haswell Hospital for disturbed patients". At that moment, a nurse came in with a white coat, white hat and so on, checking on her charges. She started counting, "One, two, three". She looked at me and said: "Who are you?" I said, "I'm from the House of Lords", and she continued, "four, five, six, seven", including me. I have to say that I am sure that the public do not hold your Lordships in that regard, but it may be that some people do. In those circumstances, it may be as well to refer such an important matter to the public.

I have a great affection for my country, but as a socialist I have always tried to look beyond our shores. I was a strong supporter of EFTA, I am a fervent supporter of the Commonwealth and, despite what is happening in the former Soviet Union, I have high hopes of a transformation in the way in which the new countries will be run. I thought that in the early stages of the European Community we were to make a considerable advance in international co-operation. I have shown my doubts, and could show more if time permitted, about the way it is developing. We have had many scare stories about what would happen to this little island of ours if we were to reject the Bill and the treaty. We would be isolated, on neither the fast train nor the slow train. Inward investment would dry up and be non-existent. In his admirable speech yesterday my noble friend Lord Jay said that this was pure fiction. I am surprised that it should have been used as one of the arguments in the debate.

My predecessor in another place and an old friend and highly respected former member of your Lordships' House, Manny Shinwell, put it thus: I am not against the Common Market. It is just that I want nothing to do with it". As with many things he said, he showed considerable foresight.

I conclude by saying that I do not believe that we can say now that we want nothing to do with the EC. However, we are at a watershed in the Community's development. I recognise only too well that we are the non-elected Chamber and that we could be in disagreement with the elected House. But we have a role to play and on some—very few—occasions this House should express a contrary view. I believe that that is a major part of the role of your Lordships' House and that this is one of those occasions.

4.30 p.m.

Lord Belhaven and Stenton

My Lords, having listened to your Lordships' observations on the Maastricht Treaty for the past two days, I have to say that the subject of our debate resembles the old agricultural pastime of catching the greased pig. It is the sort of pastime in which I have taken part myself. I suppose it is illegal now, like cultivating more than 80 per cent. of one's land. We have on the one hand my noble friend Lady Thatcher saying that the treaty involves irrevocable loss of sovereignty, an opinion with which I agree (and she ought to know what she is talking about); and on the other, many equally erudite and knowledgeable noble Lords saying that Britain's influence in the world depends upon ratification of the treaty. I ask noble Lords: what is a humble Back-Bench Peer to make of all this? The one clear thing in this debate is that the issues are unclear, though I believe they ought not to be so. It is deplorable that people understand so little of what is involved in the treaty, and I am inclined to say that I think all the leaders of the major parties are to some extent to blame for that.

My noble friend Lady Thatcher quoted from Title I, Article A of the treaty, which I believe is on the title page. Unfortunately, she stopped short half-way through the last sentence, so I shall quote it again: 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 among the peoples of Europe, in which decisions are taken as closely as possible to the citizen". That can only be a contradiction in terms. A super-state which takes power from national parliaments and arrogates them to itself is not taking decisions as closely as possible to the people.

One of my predecessors, something over 200 years ago in the Scottish Parliament, was one of the foremost opponents of the union between Scotland and England. He had an advantage over me in that he knew what was being proposed. There was no nonsense about it. It was an incorporating union for all time coming between Scotland and England. Was there a loss of sovereignty involved in that? The answer is emphatically "yes". No one was being fooled or soft-soaped about what was being proposed. So he could speak with justice and reason of our ancient mother Caledonia breathing out her last with an "et to quoque mei filii".

I do not know whether I can justly say the same of our ancient mother Britannia. A glance at the new plum-coloured passport which is inflicted these days upon Her Majesty's subjects might lead me to suppose that Britannia is indeed being slowly but inevitably murdered in our Parliament. Noble Lords will notice that the United Kingdom takes second place to the European Community on that passport. Her Majesty the Queen is a mere deputy of the Commission. Indeed, she is a "citizen". There are echoes here of the French Revolution and of Napoleon. She is a citizen of the European Community, owing a duty to it. As the noble Lord, Lord Stoddart, said, she will become a vassal queen.

From the advocates of the treaty we hear a lot about how we must go on and go forward; that the train might go on without us and we shall be left behind on the sidelines, etc. But I sometimes wonder where all these people have been these past few years. It is not so long ago, just six or seven years, since we were hearing about "the road to socialism". We ought to have learnt by now that the argument of historical inevitability is a trap. There is nothing inevitable in the future of our country and of Europe. Where men's minds try to construct a system of inevitability, they are nearly always wrong.

I should like to comment on the theory most eloquently put forward by my noble friend Lord Stockton that the process of ever closer union will make war nearly impossible. I believe that a federal union will make war more likely. One has only to look at Yugoslavia and the Soviet Union to see that federalism and peace do not always go together. The United States, which is frequently quoted as a paragon of the federal principle, endured a terrible civil war in the last century; indeed, it was one of the worst wars in the whole century.

So what happens if, let us say, Spain or France wishes to secede from the Union? I do not know. But I am sure that the result of such a decision by a member state or states would not be succeeded by a period of sweetness and light.

The ancient notion of England goes back a thousand years, and that of Scotland more than a thousand years. Her Majesty's ancestors have been rulers of a sovereign state in either country since the end of the dark ages. I believe that Her Majesty's Government are ending that happy situation by a process of "death by a thousand cuts". To deprive such an ancient nation of its independence ought to require either an act of conquest, or an act of consent. The nation has a right to be asked for its consent before it is deprived of that sovereignty for which our forefathers have fought, suffered and died for over a thousand years. In my view, Her Majesty's Government have no right to make a trade in the sovereignty of this nation without the consent of its people. This House, if it is the last thing it ever does, ought to act to give the British people the right to a referendum, a right which is currently denied to them by all the major parties in this country.

4.36 p.m.

Lord Rodgers of Quarry Bank

My Lords, until we heard the vigorous and entertaining speech of the noble Lord, Lord Stoddart of Swindon, I wondered how on earth we could be planning to spend four days in Committee. I had hoped that perhaps this afternoon we would have heard from the noble Lord, Lord Tebbit, and that he would have carried his banner boldly in the bright light of day. I regret that he will not be emerging from the shadows until this evening. But the intervention of the noble Lord, Lord Stoddart of Swindon, has certainly given a vigour to the debate which it seemed hitherto to lack.

I certainly note the noble Lord's threat that in Committee many amendments will come forward; though I still find it difficult to understand what is likely to be said that will be new. It has already been remarked in the course of the debate that much of what we are hearing now has been heard on previous occasions. Indeed, I felt very nostalgic listening to the speeches of the noble Viscount, Lord Tonypandy, and the noble Lord, Lord Jay. I heard them both speak on this issue 30 years ago. Twenty years ago the noble Viscount was silent for a period, but I heard him speak again today. I do not believe that the voices and the arguments, though very sincerely held, added anything to what was said by those who opposed the original legislation in 1972 and who have been opposed to it ever since.

Let us take, for example, the argument on the loss of sovereignty, put forward as if that were peculiar to Britain's relationship with Europe and was an unmitigated disaster. My noble friend Lady Williams commented on this point yesterday in relation to NATO. The loss of national identity referred to by the noble Viscount, Lord Tonypandy, is something much more subtle to do with England's green and pleasant land. Again, I see that none of the fearsome warnings we had 20 years ago has yet been realised.

Then we hear that Britain's national interest is quite distinct from the interests of the Community, as if Britain had not joined out of self-interest and had obtained no benefits from having done so. I was glad to hear the noble and learned Lord the Lord Chancellor refer this morning to our long-term interest as being the underlying factor which determined Britain to join and which persists as the most important issue today. These arguments are honest, but they are familiar and sound sometimes rather tired. My only regret was to hear the noble Baroness, Lady Thatcher, adopt them yesterday.

I remember the first speech that she made as Leader of her Party (I believe on 8th April 1975), and I heard it from the other side of the House. It was a good, straightforward speech. There was confident advocacy of the case for staying in, even if not a great deal of passionate enthusiasm. She referred to what she called a number of strategic posts and I thought that they were all valid. They were valid then and they are valid today.

Those who are frustrated by the processes of Parliament and the extent to which they feel themselves to be in a minority are hoping that it may be possible, with Parliament's consent, to appeal over Parliament's head to the public in a referendum. Like my noble friend Lord Jenkins of Hillhead, I find the idea of a referendum exhilarating. I greatly enjoyed the 1975 campaign and would enjoy another one today. But that is not a sufficient reason for being in favour of a referendum. Nor is it a sufficient reason to believe, as I do, that were a referendum to be held and a question to be devised which could fairly enable a proper answer to be given, the answer would be, yes.

There is a great deal of difference in voters complaining about the Common Market—sometimes with justification, on the lines of what was said by the noble Lord, Lord Dormand of Easington—and on sober reflection believing that it is either better to come out than stay in, or that it is better to stand still than move forward. Again, the country has bouts of fervent patriotism which occasionally may flare. But I do not believe that the British people, if they were asked the question, would feel that they had very little in common with the French, the Germans, the Italians, the Dutch and the Danes and did not want to move forward with them.

The noble Lord, Lord Stoddart of Swindon, had some fun with the Newbury by-election. I would not for a moment take away his debating triumph in that respect. However, perhaps I may remind him and the House that there were three candidates in that by-election who stood very clearly against Maastricht and/or in favour of a referendum. One obtained 601 votes; another got 338 votes; and a third had 84 votes. That was a total of 1,023 votes which was even fewer than the votes given for the Labour Party in the Newbury by-election. So we must not assume that, given the opportunity to vote on a single issue on an occasion of protest, the voters will take it. I make that point because it is quite a different matter voting for a whole combination of reasons when loyalties to party are strong in a general election, to voting in a by-election which, of all events, gives one an opportunity to protest. The opportunity was there, but the protest was not taken up.

Yesterday the noble Lord, Lord Blake, referred to the Campaign for a British Referendum, of which he is president. The noble Lord, Lord Stoddart, referred to an organisation, of which he was chairman, with what I understood were the same objectives. I confess that I had not heard of either of those organisations before. But nobody would argue that the campaign for a referendum is a mass movement. It is not the Anti-Corn Law League; it is not the Chartists; and it is not the Campaign for Nuclear Disarmament. It is not even the protest against Suez. Noble Lords did not squeeze into the entrance to the Parliament building today through crowds demanding a referendum.

The noble and learned Lord, Lord Simon of Glaisdale, referred to a popular clamour for a referendum. But I do not believe that there is a popular clamour. If voters were asked whether they would like the opportunity to vote on a complex issue in which they see what appear to be disadvantages, they would be very foolish to say, no. But, that having been said, I do not believe that the public at large want to take away from Parliament its duty in respect of the Maastricht Treaty.

However, and despite all those points, if I believed that a referendum might settle matters and might save us on future occasions from having two-day debates of this kind, however enjoyable, and four-day debates in Committee, and if it would call an end to the long and almost endless debate which at heart is about whether Britain should be in Europe at all, I would say: yes, let us have that referendum. But as the noble Baroness, Lady Blackstone, said this morning, the referendum of 1975 settled nothing. It was enjoyable; the outcome was plain but the debate went on. I do not believe that any noble Lord present today who is against the Maastricht Treaty would put his hand on his heart and say that in the event of a referendum finding in the treaty's favour, he would never again campaign against the issues that that referendum was meant to settle.

I do not approach the Bill with a song in my heart. I greatly regret the caution and lack of enthusiasm with which the Government have brought it forward. I looked at the Third Reading debate in another place on 20th May last. The Prime Minister managed to say "no" six times in a single sentence—twice as many, in what looked like calculated feebleness, as his predecessor uttered in a memorable moment of impromptu performance. That was the spirit in which the Bill was carried through another place: reluctance, looking over the shoulder and finding every reason for an opt-out litany which represented quite often an abdication from putting the real case for the Bill.

The noble Lord, Lord Carrington, in a speech to which others have quite rightly referred, devised the idea of conceptualists and pragmatists. It is not quite so simple a matter. But if we have to choose, I should certainly put myself in the latter category. Certainly I am not a conscious federalist. But as the noble Lord said, we must keep up the momentum of Europe. Even a pragmatist needs momentum and a sense of direction. One needs to set a goal, as the noble Lord, Lord Hunt of Tanworth, said, and one has to devise and retain a momentum towards it.

My noble friend Lady Williams referred yesterday to foreign and security policy. Indeed, the memorandum, which is a preamble to the Bill, makes clear that it is outside the Treaty of Rome, outside the competence of the Commission and wholly for agreement between governments on a case by case basis. That may be right. I do not for a moment complain. I do not ask for one of the pillars of European union to be brought within the treaty. But it is something to boast about if, as a result of closer co-operation with our partners in Europe, either outside or within the treaty, Europe can come to speak with a clearer, plainer and more influential voice in the world.

When the arguments, many of them about economic policy, began 30 years ago, we argued, perhaps not always with total justification, that entry to the European Community could only bring Britain good in that respect. But we also argued the political case. Empire was over and Britain was setting a new direction. My greatest regret over the years is that Britain has not accepted that opportunity for leadership in Europe once we had joined. As the noble Lord, Lord Sherfield, said, many were uncertain at the time of the Treaty of Messina and earlier during the Schuman Plan. Yes, there were arguments the other way and there were hard decisions to be made.

But having decided to join and having made that historic change of direction, no government since that time have shown the will or imagination to lead Europe to Britain's advantage, as British governments should have done. I greatly regret that. Although I support the Bill as the best Bill available to us, I wish deeply that it was urged upon us by this Government with a great deal more enthusiasm than they have so far shown.

4.50 p.m.

Lord Sanderson of Bowden

My Lords, we are asked to give a Second Reading—dare I say, at long last —to this Bill, which is a consequential provision of the Treaty on European Union signed all those months ago. Two questions arise. First, how best are we to influence European affairs, being a signed-up member of the Community? Secondly, where do our true interests now lie?

One thing is quite certain. We shall not be able to influence Europe by jumping off the train and allowing the other passengers to go on alone. Some have warned of the emergence of a super state. I heed that warning. But a union of nation states holds no terrors for me. As a Scot, I have spent my life in politics pointing out what dangers there can be in the break-up of any union. I am for building bridges, not for blowing them up. With political will we can avoid just that.

Some talk of the European Community being a major brake on free trade. By our signing of the Single European Act we have managed to break down many cosy arrangements and barriers. I am not willing to see those barriers re-erected, and that could well be the result of our failure to ratify the treaty. Through our Government's and our Prime Minister's persistence in achieving acceptance of Article 3b—on subsidiarity —we can now ensure that the Commission ceases to arrogate to itself more authority, taking it away from the nation states. How pleased I was that earlier today my noble and learned friend the Lord Chancellor spelt out the legal framework of that provision.

Furthermore, the powers now vested in the European Court of Justice to fine member states that fail to comply with legal obligations agreed by Ministers is a most satisfactory outcome. It is a positive response to many like myself who believe that in this country we generally play by the rules, but that some other countries only pay lip service to some of those rules. Therefore, our best chance of influencing affairs is to stand and fight our corner. We must be positive. We must not be destructive critics within the European Community.

Where do our true interests now lie? I emphasise the word "now". Some say that things should stop. I believe it was my noble friend Lady Thatcher who said, "We go thus far and no further". We ignore the precedent of the history of the common agricultural policy at our peril. In an excellent speech yesterday my noble friend Lord Thorneycroft reminded us that we treated the Messina conference leading up to the Treaty of Rome with indifference and, some say, with contempt. The result was that the Six went ahead with the common agricultural policy. It suited France, Germany and Italy. They used it as a powerful motor for the economic transformation of the south of France and Bavaria.

When we came along, the common agricultural policy was totally inappropriate. Only in recent years —I speak as somebody who, from the Front Bench, had to deal with agricultural matters—have the beef and sheep regimes become common to all 12 countries. How much better if we had been at the table earlier, influencing the reform of the common agricultural policy. Our interests now lie firmly in there, and we must have a strong voice. Have we learnt nothing from those early days? I do not believe that we should allow ourselves to be second-rate citizens within the European Community.

Many of those who criticise the Government for signing the treaty admit that our economic future lies in Europe. The GATT proposals are an essential for the future and for the furtherance of better trade relations throughout the world. The European Community can influence the United States. We must never forget that the United States is the most protectionist market in the whole of the developed world. It is a tough assignment but we must attain agreement quickly. We stand a far better chance if we act in a united way with our colleagues within the European Community.

I have heard the siren voices, but I reject out of hand the thought of a possible return to the trade barriers and isolationist policies of the past. The United Kingdom's prosperity depends heavily on continuing development of the single market. Maastricht is an important part of that process. Failure to ratify could put the single market at risk. I believe that that is fact and not fiction. I profoundly believe that and reject the arguments of those who say that the Maastricht negotiations, skilfully handled by our Prime Minister, are a step towards a centralised and federalist Europe.

If we discuss jobs and unemployment, as we do regularly in this House, we must never forget that we need customers and markets to enable more jobs and less unemployment to become a fact. If we do not ratify the treaty it will be akin to that famous train stopping at some windswept, barren, wayside station. I do not believe that the British people would thank us for dumping them there.

I shall say just a few words on the referendum. Yesterday, in that splendid speech, the noble and learned Lord, Lord Wilberforce, gave one or two pungent and far-reaching messages. He said that it was a logical step to move forward from the Single European Act. Certainly, extension was a forward move and, of course, a forward move is the right way to go. We do not want to stand still or go back. Then he said, However, I suggest that it is not a revision in a constitutional sense".—[Official Report, 7/6/93; col. 576.] I agree with that sentiment and for that reason, and because we have gone through every single possible process in a parliamentary democracy to reach a conclusion regarding the Maastricht Treaty, I do not believe that a referendum is the answer. And I certainly do not believe in passing the buck on the issue to the people.

4.57 p.m.

Lord Ewing of Kirkford

My Lords, perhaps I may begin my remarks by drawing to the attention of your Lordships' House, particularly those colleagues who have served for some time in another place, a remarkable incident that took place during the course of our debate this afternoon.

The noble Lord, Lord Amery, made an informative and expert maiden speech and was in the process of being warmly congratulated by my noble friend Lord Healey. Obviously struggling with a throat infection, my noble friend was handed a glass of water by the Government Chief Whip in order that he could continue to address your Lordships' House. Of those of us who served in another place for many years, I am fairly certain that none of us can ever remember any Chief Whip—even the kindest of them in the noble Viscount, Lord Whitelaw—handing any of the Members a glass of water in order that they could continue to address their colleagues in another place.

When I saw that incident I felt that it was a demonstration of the kindness displayed in your Lordships' House from one colleague to another. It was in marked difference to the attitudes that prevail in another place.

Yesterday my noble friend Lord Galpern said to me, "I see that you are speaking tomorrow. Will you have anything new to say?" I did not answer the question. But after 84 speeches the answer today is that I hope so, but I fear not.

I do not claim consistency on the matter. Indeed, in the late 1950s and early 1960s when the great debate was going on in the Labour Party regarding whether or not we should become part of the EEC at that time, I took a rather different view from many of my colleagues on either side of the debate. In those days I argued that we should be seeking an amalgamation of the European Free Trade Association which, at that time, consisted of 16 member states with the then five member states of the EC to form a 21 member state free trade association. I always argued that whilst I was anti-EC I was not anti-Europe because I appreciated that Europe was much bigger than the EC.

As time moved on the argument developed. In the debate on Maastricht—indeed, on the question whether or not we ought to be members of the EC —I have found three groups of opinion. There are those who, whatever is said, are against Britain's membership and no argument will persuade them otherwise. There are those who, whatever is said, are in favour of Britain's membership and no argument will ever persuade them otherwise. In the middle is a large group, of which I claim to be a leading member.

In 1975, during the referendum, I campaigned against membership of the EC. Events have moved on. I have seen the enlargement of the EC, amendments of the Treaty of Rome —it must be borne in mind that the Maastricht Treaty is an amendment of the Treaty of Rome and ought to be read in that context—and I have seen the widening of the horizons in Europe. I openly admit that I have been moved by the argument and have changed my mind. I am now firmly in favour of Britain being, as the present Prime Minister has said —though he has not followed his own words—at the heart of Europe.

I go back to the opening of the debate and pick up the point of my noble friend Lady Blackstone about the way in which the whole debate in the country in general and in another place in particular has been conducted. I choose my words carefully when I say that the debate has been conducted at a disgraceful level. It has been conducted in the most confrontational manner that I can ever remember on any great constitutional issue. The CBI write to us and say that we must endorse the Maastricht Treaty, otherwise British industry will be in serious trouble. As soon as that is said some other person says that if it will benefit the bosses it must be bad for the workers. Then a trade union writes to say that we must not endorse the Maastricht Treaty because it will damage workers' rights. As soon as that is said the employers say that if it will be bad for the workers it must be good for the bosses. The debate has gone on and on in that vein. The net result is that we have not had a constructive debate about the Maastricht Treaty on the one hand and British membership of the EC on the other.

I say as kindly as I can—there is no nice way to say it —that during this debate what the country has lacked is leadership. I read with interest the article by the noble Lord, Lord Rees-Mogg. I can understand what was behind his claim that at present the country lacked leadership. We look for scapegoats. At one time a certain Jacques Delors was the baddy or great bogeyman for Great Britain. Everything that Jacques Delors said was wrong. Suddenly, the Prime Minister, John Major, agreed to his reappointment. One can no longer criticise someone to whom one has just given another term of office. One has to look for another scapegoat, and this time it is Germany. Therein lies a danger. I hope that your Lordships' will take notice of the way in which the relationship between the United Kingdom and Germany is developing.

I listened with interest to the speech of the noble Lord, Lord Parkinson, yesterday. It was a very good maiden speech. Although I did not agree with a great deal of what he said, I recognised the sincerity and force with which it was said. It was not Chancellor Kohl or Herr Pal, President of the Bundesbank, who took us into the Exchange Rate Mechanism at a rate that the economy was too weak to sustain. It was the noble Baroness, Lady Thatcher, as Prime Minister, and the present Prime Minister as Chancellor who took us into the Exchange Rate Mechanism under those conditions. It is politically dishonest to blame Germany for the economic problems that we suffer at the minute. Was it Chancellor Kohl or Herr Pail who built up the massive debt that this country has at the moment? That was the misguided economic policy of the noble Baroness, Lady Thatcher, as Prime Minister, and the present Prime Minister as Chancellor.

The oldest trick in the book when you have problems at home is to divert people's attention by looking for an enemy abroad. Down through the ages politicians have played that card time and time again. The enemy that we have found is Germany. I say to your Lordships that Germany will have to receive some understanding. It faces massive problems. I hope that your Lordships will examine what has happened in Germany since unification. The old Federal Republic accepted responsibility for the building of 50,000 houses in the former Soviet Union (now the Commonwealth of Independent States) in order to repatriate Soviet troops stationed in East Germany. The Soviet troops are still in East Germany. The situation is difficult to contain, and that is what is causing all of the tension in that part of Eastern Europe. The Federal Republic never in any one year met the target house building programme that it had set itself at the point of unification.

I have reservations about another matter. I deeply regret the decision to transfer the Bundestag from Bonn to the Reichstag in Berlin. If your Lordships think that the emotion resulting from the demolition of the Berlin wall was high, wait until you see the first sitting of the German Parliament in the old Reichstag rebuilt after the war. From that date until the present every seat has remained empty. The saying in Germany was that every seat in the Reichstag would remain empty until it was occupied by the Parliament. To go into the Reichstag and see those empty seats is an eerie feeling. The emotion that that will generate may be uncontainable. The noble Baroness, Lady Thatcher, should understand better than most of us —certainly me—that we ought not to fan the flames of that kind of emotion. That is nationalism at its worst. Herr Willy Brandt, referring to the emergence of nationalism throughout Europe, made the famous remark that the graveyards of Europe were littered with the victims of nationalism. Will we never learn?

This brings me to my support for the Maastricht Treaty. With all its defects, I dearly wish that the Government had not opted out of the social compact. Why is it necessary to keep our workers' wages and working conditions so low and see the rest of Europe striding ahead? We have never had an explanation for that. Why oppose the 48-hour week? The 48-hour week has nothing to do with the fact that workers can work only 48 hours. Did it have something to do with the hours that junior doctors worked in the National Health Service? Was it seen to be a threat to the hours worked by those doctors? Why be so childish in seeking these opt-outs and—brave man that the Minister is—going to the Conservative Party's women's conference at the weekend to bang his chest and boast at what he has been able to do for them? He gets a four-minute traditional standing ovation. It is an insult to the people of Great Britain to argue that to opt out is an achievement.

All right, we built the Channel Tunnel. The noble Viscount, Lord Tonypandy, a dear friend of mine, whose speech yesterday was summed up by the noble and learned Lord, Lord Howe, as, "Thus far and no further", should understand—I say this with respect —that he will soon be able to get the train from Tonypandy to Toulouse. All right, he might have to change at Paddington, but we cannot stand in the way of progress. One hundred flights a day go from Britain to Paris. One cannot stand in the way of that kind of integration. One hundred flights a day go from Britain to Frankfurt. One has to integrate. We cannot stand in the way of that kind of development. But if it is to be managed, we have to be part of the management team. The time has long passed when we could sit on our hands and opt out.

I finish on this point. I shall give my support to the treaty because of the children of this country. I believe that we have a bounden duty to try to develop and secure their future in the best way possible. There is no sense in teaching them dual languages at school but then drawing ourselves back into this narrow nationalism. That is no good. Therefore I shall support the treaty when it comes to ratification.

5.11 p.m.

Lord Stewartby

My Lords, I must agree with one thing in particular that the noble Lord, Lord Ewing, said at the beginning of his speech. He said that he would set out very candidly what his own views were and how he had come to them. I admired him for that. I shall try to be honest and candid about my own views, even though I realise that it reflects rather badly upon me.

Most of the debate so far—I have tried to listen to many speeches and to read as many as possible of the others—has surprised me by the way in which so many of your Lordships appear to be so certain about the way they should regard this Bill. I have to confess—I accept that this is probably due to my own feebleness of mind—that I find myself almost totally convinced by each of the arguments both ways. That is the major dilemma which faces us when we consider a Bill and treaty of this kind.

When we are told that the treaty contains nonsensical provisions and provisions which could not be implemented and which will cause a great deal of friction in Europe, it is very difficult to disagree. Are we in Parliament to approve a Bill which will enable the United Kingdom to ratify a treaty which has such defects and which will cause such problems? On the other hand, if we did not enable the Government to ratify the treaty there would inevitably be widespread political and economic confusion in Europe from which we ourselves in this country could not hope to be exempt; and, indeed, because we would have been the proximate cause of the failure of the treaty, those problems would be focused in this country and would make it vastly more difficult for us to influence and shape in future the affairs of the Community to which we would still belong. I find each of those arguments very compelling. And so I have to look at the question from the point of view of the balance of disadvantages.

I recognise that for some of your Lordships that may sound a hopelessly negative way to approach the issue. But in my view, and from the perspective of someone who has been much engaged in different functions during my life in monetary and economic matters, the whole question of the Maastricht Treaty and the future of Europe now turns on this issue of monetary union. I am deeply disturbed by the way in which the concept of monetary union is now being promoted, or has been promoted in recent years, by so many of the political leaders in Europe. I simply do not believe that they have either understood, or, if they have understood, that they have been candid in explaining or recognising, the implications of monetary union, because monetary union cannot be sustained without political union.

Political union requires a whole different constitutional establishment from anything which has yet been put forward by the proponents of monetary union or the Maastricht Treaty. It is on this issue that I think we have to pause. The reason why I shall come down marginally in favour of approving the Bill and ratification of the treaty is simply because, first, I do not actually believe that in the foreseeable future monetary union could work, and, secondly, because this country, thanks to the negotiating ability of the Prime Minister and the former Chancellor of the Exchequer, has an opt out from the monetary union part of the treaty. That is a very negative basis on which to think that we ought to go forward with the Bill. But I think it is a clear one because the disadvantages of taking either course are considerable, and sometimes in political affairs, as in business or in one's personal life, one has to take difficult decisions according to which is the lesser of the evils. In my view, by a rather modest margin, the lesser of the evils is that the Bill should pass and that the treaty should be ratified.

I should like to call in aid one or two historical examples to illustrate what I mean by the dangers of monetary union. There have been only two—or perhaps two and a half—occasions in European history when European monetary union has persisted; first, at the height of the Roman Empire, when the Roman coinage and currency system spread not only throughout continental Europe but also throughout Britain; and, secondly, in the period around the year 800 and just afterwards, as a result of the conquests of Charlemagne. I said that there was another perhaps half case. In the post-Napoleonic period, a number of countries in Europe managed to stitch together a temporary monetary union which fell apart.

Those historical examples are of some relevance to the question before us today because the first two worked and the third did not. The first, under the Romans, was only secured by a very powerful form of political union enforced by the Roman legions. The second was only achieved by the armies of Charlemagne; and as soon as his military control over his empire weakened so the political control and monetary union disintegrated. The one which did not work at all, the 19th century post-Napoleonic one, did not work because it was not backed by political union and it was not enforced by the armies of any central political power.

The implications of this can be measured closer at home. I listened earlier to my noble friend Lord Belhaven who spoke about what happened at the Treaty of Union in 1707. But if we go back to the year 1603, when there was a political union between England and Scotland, it was not anything more than a union of the Crowns of England and Scotland. But it was followed immediately by monetary union. The two countries had had very different experiences over previous centuries. There had been a long and gradual monetary inflation in Scotland since the 14th century. There had been stability of prices generally in England until the middle of the 16th century, when Henry VIII went wild and achieved more inflation in about 10 years than the Scots had achieved in the previous 200. But when it came to 1603 the currencies were nowhere near in line with each other but it was decided to have a common currency.

It was introduced and they started making in Edinburgh and London coins of the same denomination. But it did not last, although it lasted after a fashion. It caused economic problems because the exchange rate was artificial and there was no government and political union to back it. It was only in 1707, when there was a union of the parliaments and the political systems, that there was an effective union of the currency and therefore the monetary union which has subsisted for the past 300 years between England and Scotland.

We ought to look at those examples from the history of Europe and of the United Kingdom to observe the dangers of trying to move to monetary union without political union, and trying to contemplate that, unless and until such time as those who would be part of that political union are sufficiently convinced of its virtues and dedicated to its success to ensure that the political tensions which would arise from it can be absorbed and managed to allow the economic and monetary union to continue.

Some of your Lordships may not have read the evidence which was given by my noble friend Lord Lawson of Blaby to the Foreign Affairs Committee of another place in February of this year. I recommend it very strongly to any of your Lordships who may be interested in this subject. He explained very clearly that there is no natural and inevitable path from a European monetary system with adjustable rates to a European monetary system with fixed rates and to a common or single currency as a natural progression, unless the political changes went with it or indeed preceded it.

I believe that that is the great gap in the thinking of those who propound the federalist case in Europe, not only in this country, but I am thinking more strongly of those in France, Germany, Belgium and others. They have not thought through what would be needed in the way of a unified political structure in order to implement the sort of monetary developments to which they have committed themselves in the Maastricht Treaty.

If there is one great lesson from this debate—which, as usual in this country, is being conducted with much greater vigour and much more to the point than in many others, and which I hope, if this treaty is ratified, British Ministers will be able to bring home to their continental colleagues —it is that if one tries to run economic and monetary policies according to political priorities and not according to economic priorities, one is bound to get into the deepest trouble unless one has first organised the political arrangements in a way which will support and protect those monetary arrangements rather than undermine them.

The lessons of the past few years and months illustrate vividly the dangers of trying to go too fast. I have always felt that the fate of this country was in membership of the European Community and that it could, over time, develop in a way which was positive for us and for our fellow members of the Community. But few people can doubt that the Maastricht Treaty has been the single most divisive event in the history of the Community for as long as most of us can remember. Yet it was meant to be a stage forward towards union. Instead it has aroused all kinds of concerns and instincts. It has set countries against each other and undoubtedly it has set back the progress which the Community was making in other directions. It has made it much more difficult to establish GATT. It has caused endless diplomatic problems and we are nowhere near through them yet. Even if the treaty were ratified there will still be enormous problems within the Community and as regards the Community's relations with the rest of the world, let alone with the rest of Europe, which will need to be solved.

I just hope that the debate in this country will in future enable British Ministers to emphasise to those who represent the other member states in the councils of the Community, that it really is no good trying to force the pace beyond what the democratic support in the member states will actually tolerate and support. If we do that and set unrealistic goals, it will always end in tears. It is bound to do so; it is no surprise that it has done so; it is a shame that it has done so, but it is always going to happen that way.

I very much regret the way the word "Euro-sceptic" has been adopted by people who are opposed to the Community and all its works. I am a Euro-sceptic but I hope that I am a constructive one. I am very sceptical about many of the things they get up to. I believe that anyone who has had to represent the United Kingdom in the councils of the European Community would be very sceptical about those things. But it is something which is so important for our future and that of Europe, that we must be prepared to make ourselves unpopular at times by pointing out the nonsense which is sometimes underlying the proposals which are brought forward: in this case the idea that monetary union is on a simple glide path from where we were or now are because that itself is bound to fail.

If we ratify Maastricht, in my view it will only be justifiable because we are not bound by the nonsensical assumption that monetary union is bound to follow. It will give us time in which we can hammer home the message that unless and until our partners explain how they think that they are going to operate the European political framework in which monetary union can survive, there is really no point in putting the idea forward at all.

5.26 p.m.

Lord Bruce of Donington

My Lords, late last night I was very moved to hear from the noble Lord, Lord Gray, his misgivings at having to express dissent from the leaders of his own party, of which he has been a member for quite a time. I am very much in the same position. It was 571 years ago that I first joined the North Paddington Divisional Labour Party. I have been a member of the Labour Party ever since. I did not join it on high. I addressed envelopes, walked the streets and spoke on street corners. I did a whole number of things which the ordinary rank and file constituency party member of the Conservative Party, the Liberal Democrat Party and my own party do from time to time. Therefore, I must apologise in advance to my own party for allowing occasionally soft words of dissent to pass my lips in very much the same way that the noble Lord, Lord Stewartby, seemed to be expressing some half-doubts as regards what he was about to do.

I hasten to give to my own Front Bench the assurance that I shall do nothing at all to disturb the unanimity of opinion which exists between themselves and the Government and indeed Members of the Liberal Democrat Party. I would not dream of doing so because this matter is not of recent vintage. My own leader will forgive me if I point out that it was the leader of my own party in another place who, three days before the Conservative Party conference of 1990, insisted that we should enter the exchange rate mechanism and at the then rate. So persuasive was he, with full party backing, that three days later the then Prime Minister agreed to what the Labour Party recommended to her and joined the exchange rate mechanism. That shows a development and solidity of view between the two Front Benches which I would not wish to disturb.

Today we are discussing and yesterday we discussed—or we were supposed to have been discussing—the Treaty of Maastricht, and an enabling Bill is before us that will incorporate the necessary portions of it into British law. I do not want to degrade its status by calling it a piece of paper; it is a collection of pieces of paper. That is what we are discussing.

It has appeared in several versions. One version was inadvertently leaked on 10th December 1991. It should not really have been leaked by the Dutch presidency but it was, and once the thing was out, it had to be rushed out in its rather crude form. There followed a series of consultations as to how it should eventually be initialled. On 7th February it was initialled and we were issued with a yellow document —a very thick one—which it took me some time to compare with the original blue version that had been issued and with the white version. There were considerable discrepancies which I ventured to ventilate in your Lordships' House at the time. I doubt whether they were worthy of your Lordships' attention and, frankly, I do not think that they registered, but it does not matter.

In the meantime, a general election happened. A couple of months after the election the. Government published their printed version of the treaty. How, therefore, the treaty could be an issue at the general election mystifies me unless politicians, particularly in the Liberal Party, had such powers of divination that they could eventually and instinctively determine what was to be in it. The Government, by the way, sold 4,500 copies at a price of, I believe, £13.40 per copy. Eventually Members of Parliament, recently elected, actually got a copy after the election.

This is all very good, but one thing that the Government did not do was to publish the amended Treaty of Rome. In fact, interpreting the Treaty of Maastricht without being able to go back and see how the Treaty of Rome is affected by it presents a difficult problem. To be quite frank, I do not think that many Ministers accomplished that. I am not blaming them over-much for that, but at least the present Chancellor of the Exchequer admitted that he had never read it.

That raises an interesting constitutional situation which I am quite sure that your Lordships will immediately appreciate. Here we have a very important document—mind you, it was downgraded in the course of its introduction yesterday—considered by a Cabinet, some members of which have never read the damn thing. Fair do's; I am not saying that no member has read it—no, that would be unjust, and it may have taken them some months to do so. But even as recently as a couple of months ago, if one reads the Daily Telegraph—as I occasionally do for my delectation, it not being a prominent supporter of my own party—one learnt on 26th March that: One of the worst jobs in politics is held by Laura Adshead, 26, a Tory researcher whose job it is to explain Maastricht to ministers". I do not see why that should be the worst job. I do not think that Ministers are dumb—many of them are personal friends of mine. However, that illustrates the degree of frivolity with which this whole matter has been dealt. After all, we are considering a series of pieces of paper. I trust, by the way, that Ministers have read the treaty by now in preparation for this debate.

One thing is quite notable and has, I think, been agreed on all sides of the House. I refer to a certain lack of enthusiasm with which the noble Lord the Leader of the House first introduced the Bill. I must say that, after making all allowances for the applause which the noble Lord received for his very agreeable presentation, the response from those behind him left some cause for misgiving about the true depth of the enthusiasm for this particular document. In short, there really is no enthusiasm for it.

I do not want to make my own Front Bench, the Liberals and the Government too nervous by suggesting to them some possibilities that might occur. When I can find the piece of paper, I shall illustrate the point. I see from the Daily Telegraph, again—where are my glasses?—no later than 1st June that a case is being brought before the German courts by a certain Herr Brunner, who was in the directorate bossed by none other than Herr Martin Bangemann. According to the Daily Telegraph, the case may result in the Germans being unable to ratify the treaty. Oh, my Lords, I detect an immediate shudder lest the treaty should not be ratified. Let us face it, I am not saying that that will be the result and I do not want to press the case too far. I do not want to make my colleagues too nervous as to the terrible eventuality of it not being ratified. I want to soften the blow if I can.

But what would happen in that event? We have not done anything at all. It is nothing to do with us, but what would happen? Is the Common Market suddenly going to come to a halt? Will goods cease to he sold by Germany to the United Kingdom? After all, we are Germany's biggest market. Will planes stop flying between Gatwick and Dusseldorf? Will the whole process of the Community stop because Maastricht has not been ratified? Are not Councils of Ministers to meet any more? Will they all stop? Will nobody go on the Brussels jet and back because, owing to the catastrophe of Maastricht not being ratified, everything is going to grind to a halt?

That is the case that those who believe in Maastricht have put to your Lordships' House during the past couple of days. They have said that it would be a disaster if Maastricht were not ratified. That is such real nonsense that I barely credit your Lordships with having even remotely believed that the non-ratification of Maastricht would produce all this catastrophe. Mail would still be sent; telephone calls would still be made and people would still fly over to the Continent and back. What would come to a grinding halt? The answer is that things would go on very much the same as they do at the moment. To try to terrify everyone here that a refusal to sign Maastricht would immediately produce a rupture of gigantic proportions is complete nonsense.

How is it, therefore, that all that arose in the first place? I have been completely baffled over the past few weeks by the whole attitude taken towards this document, because no one really likes it. Even on the Liberal Benches, last night one noble Lord was saying that the treaty was devised by politicians, and politicians should learn to do better things. The same point, in rather more grave terms, was made by my noble friend Lord Healey this afternoon, when he pointed, not to the fallibility of systems, but to the fallibility of politicians and the powers they have and the decisions they themselves make.

The problem is this: politicians have not failed in the slightest. They have merely been unable to operate. Over the past 20 years, members of governments have spent most of their time catching up with the material provided to them by their own bureaucrats. They all know it perfectly well—the pressure of the Boxes! First thing in the morning their day is filled by the diary secretary: they have got to do this; they have got to do that; they have got to do the other. That applies across the whole spectrum of government. Ministers are in the hands of their own civil servants. It is exactly the same in Europe.

What the treaty proposes—no one disagrees with this—is that effective power should be handed over to two classes of individual, neither section of which is accountable, democratically, to anyone. It should be handed over to bankers and bureaucrats. The Council of Ministers has no power to originate anything. It can act only on a proposal from the Commission. If verification is wanted, look through the treaty: the Council "shall" or "may", acting on a proposal from the Commission. It is always acting on a proposal. It is in Brussels that bureaucracy remains completely in charge. People may say, "Well, look, let's sign the treaty, get in, and then change it from within". Of course! Then, when the next stage comes, which may come in Belgium within the next couple of months if Herr Kohl has his way, we shall then be told, "Well, you signed Maastricht, what the heck are you objecting to?"

Lord Harmar-Nicholls

My Lords, that is right.

Lord Bruce of Donington

My Lords, the goal posts are moved ahead the whole of the time. There is a lesson for us all as politicians: never, never, never allow any bureaucrat, research assistant, speech writer or anyone else to do your thinking for you.

Noble Lords

Hear, hear!

Lord Bruce of Donington

That is what the Government have done. It is what Labour governments have done. Conservative governments are still doing it. The Liberals, if they ever get there, will do exactly the same. Governments allow civil servants (the bureaucrats), who are not evil people at all, to do that. Look ! We all know perfectly well that there is more in the famous series "Yes, Minister" than anyone really apprehended. Most Ministers will agree, even the noble Lord the Leader of the House, that there is quite a bit of truth in that programme: civil servants do the deals behind their Ministers' backs —"Your Minister will do this. I will get my Minister to do that". Ministers come in in the morning after being up until two o'clock reading through their Boxes. They come in bleary-eyed the following morning. The first thing they get is a series of memoranda from their civil servants saying, "The Minister might consider doing this … The Minister might reply that … The Minister might give consideration to this … The Minister might consider sending the following reply. Oh, and by the way, the Minister has got to be at number so-and-so by 12 o'clock or else". They all have it. We all do.

All that is really happening with this wretched treaty is that the bureaucrats have drafted it. Of course they have. The bureaucrats have been meeting about it for months and months and months. When the poor Members of the Council arrive at wherever they arrive to consider something, the whole thing has been sewn up anyway. They know that as well.

Just to illustrate the point, and without wishing to inject too much levity in these very solemn proceedings upon which we are engaged, perhaps I may draw your Lordships' attention to a recent work published by Mr. Alan Clark. He published some diaries over the weekend, and at great expense—I can assure your Lordships that it is well worth the money—I acquired a copy. He gave an account of proceedings at a Council of Ministers which will immediately strike a chord with every Member here who has ever been at the Council or at a meeting of ECOFIN, an Agriculture Council, or whatever else it may be in Brussels. Dealing with 18th February 1986, he says: This morning I reported early to the Council Chamber, and was soon closeted in the UK REP suite with officials. They were twitchy, but curious. Totally Europhile. Sole objective, as far as I could see, being to 'expedite business'—i.e., not make a fuss about anything, however monstrous. Or at least, you could make a fuss, but only a 'show' fuss in order to get kudos from, soon after, surrendering `in the interests of making progress'. I took against one in particular"— I shall omit her name for the moment— This female, after I had spent over an hour getting my speech notes beefed up by a few degrees, literally snatched them away five minutes before I was due to perform, and substituted a pencilled text of her own … All my points"— he continues— had been 'toned down' out of sight. It had come or, I should say, back had come, great slabs of Eurospeak—total gibberish to anyone not part of the cult. 'What's all this?' 'It's the new "Line to Take"!' `How do you mean, "New"?' 'There has just been' (plainly a lie as she wouldn't look at me) `a telegram from Number 10.' Not, really"— he goes on— that it makes the slightest difference to the conclusions of a meeting what Ministers say at it. Everything is decided, horse-traded off, by officials at COREPER, the Council of Permanent Representatives". There follows this part, and Members might like to switch off their sets because it might not be suitable for their ears: The Ministers arrive on the scene at the last minute, hot, tired, ill, or drunk (sometimes all of these together), read out their piece, and depart … Now what I should have done —what every Minister should have been doing—is after the 'Conference' to call the officials in, get fully briefed on the next subject to come before COREPER, and instruct them on their 'Line to Take'". There is a moral for us all as politicians on whatever side we may sit, however elevated or lowly we may be, whatever age we may be. We should all take a lesson from that. The experts should be on tap and never on top. The lessons for all politicians of all parties is not to allow themselves to be told by their researchers, speech writers, civil servants or anybody else what to say and do but to think for themselves. While thinking for themselves they must remember that they are still members and the leaders of one of the greatest nations on earth.

5.50 p.m.

Lord Mackay of Ardbrecknish

My Lords, when I saw the batting order I wondered why I had been placed after the noble Lord, Lord Bruce of Donington. For most of the day I have tried to work out in advance the line that he might take. I get no marks out of 10 for prophesying because I thought that he might, as he usually does, treat us to hair-curling expositions of the horrors of the European Community and make us fearful and almost afraid to go to bed tonight—if indeed we have the opportunity to go to bed tonight. But he did the opposite; he lulled us, dare I say, into a false sense of camaraderie with him. Underneath it all was his deep and long-held aversion to the European Community; not to the Treaty of Maastricht but to the European Community itself.

We saw that earlier in the speech of the noble Lord, Lord Stoddart of Swindon. The noble Lord, Lord Bruce of Donington, was a kind of jovial uncle, and in contrast the noble Lord, Lord Stoddart, was more of a frightening uncle. At one stage when he was describing how the Germans look upon us in the United Kingdom I thought that he was about to say, "Fee, fi, fo, fum, I smell the blood of an Englishman". He was extremely close to it, such was the blood-curdling picture that he was painting of the European Community.

Of course one can poke fun at government—dare I say to the noble Lord, Lord Bruce, at all governments at all levels —and at bureaucrats. But the reality is far different from the two pictures which both noble Lords painted. The reality is that this country is bound by ties of history, geography, economics and, above all, politics to the European Community; to the people on the Continent of Europe. Nothing that the Euro-sceptics can say today or have said in my political lifetime can get round these unfortunate facts.

Nothing that was said by any noble Lord to whom I have listened who has spoken against the Maastricht Bill indicated to me the alternative that they offer for this country. What are the alternatives? Some have all their lives been opposed to the European Community. Some have for three or four decades failed to tell us what our alternative is. I remember that when I began to be interested in politics we were told that we should stick to the Commonwealth. That is long gone—long gone. Then we tried EFTA. That too is long gone and, as the noble Lord said earlier, the countries of EFTA are now clambering to get into the European Community. That is excellent news, but would it not be daft, plain daft, if we were going out of the exit door at the same time as colleagues of ours in other parts of Europe presently outside the Community were actually coming in? I can think of nothing worse than our being left isolated outside the Common Market, or perhaps half in and half out, which would be the worst position.

Indeed, I listened to some people who seemed to be most uncertain of our position in the world, of our abilities and institutions. They seemed to believe that we should be overwhelmed by everything European. I wondered whether our European partners knew about Robert Burns—we know that some of them do. The words which I am about to quote went through my mind a number of times today and yesterday. I wonder whether they came to the minds of our European partners when looking at Britain and at the noble Lords who have spoken, with all due respect to them. Robert Burns said: Wee, sleekit, cow'rin', tim'rous beastie, O what a panic's in thy breastie!". Because that is what it is; it is a panic about having to stand on our own two feet inside the European Community. It is much easier to sit in our own little corner like Jack Horner and to get on with our own little world while ignoring the rest.

I do not believe that there is any future in the corner. I shall give two instances of the damage done to our country by being in the corner until it was too late. One was given at length by my noble friend Lord Sanderson of Bowden when he mentioned the common agriculture policy. I shall not go into the same detail, but, frankly, the faults which are in it exist partly because we had to accept what was there the day we joined. If we had been in at the beginning, dare 1 suggest, we might have had a slightly different common agriculture policy.

The other aspect that we had to accept on the day we joined was the budget. The tremendous service—one of the many services—which my noble friend Lady Thatcher did for this country was to renegotiate that budget. But it took a long time and it was difficult to renegotiate because we had gone in too late and had to accept the terms offered on the day we entered. If we return to the half-in/half-out position, or to the wholly-out position, we shall be in exactly the same position five, 10 and 15 years down the line. We shall not like what we see going on in Europe but will be profoundly influenced by it and will have to accept it without any ability to influence it ourselves. Can we really want that for our country?

Some buzz words have run through the whole debate on Maastricht. Indeed, I suppose that in their various forms some have for a long time run through the debate. I wish quickly to take three or four and, I hope, to conclude quicker than I might otherwise because this is an important subject. The first buzz word is the "Union". My goodness, this treaty contains words about the Union. I can do no better than to remind your Lordships' House—and Members who did not hear it should read it—what my noble friend Lord Cockfield said yesterday about the declaration signed at Stuttgart by no other person than my noble friend Lady Thatcher. He reminded us of the way in which the words "the Union" spread through that document as they do through the Single European Act. But words can have different meanings. That is not the same as to mean that we shall have a single European state. Anyone who does not believe me should look at the statutes in force and at the Acts of the English Parliament—perhaps the last Acts of the English and Scottish Parliaments—which put together this indissoluble Union. The words are hugely different, as is the meaning, and they are there for all to see.

I have no qualms about the words "closer European union". That is what we have been trying to achieve for many years and for good reasons. My noble friend Lord Whitelaw, from his long experience of two world wars—which being younger I do not have—and of their impact on him and on his family underlined the importance of co-operating in a closer and closer union with Europe in order that we do not see happening again some of the things that have happened so often in this century.

On the same subject as the Treaty of Union, we come to the second buzz word; that is "citizenship" of the Union. Some of my noble friends are close to apoplectic when they think of being citizens of the European union. How can that possibly square with being citizens of the United Kingdom? That is easy because, as my noble and learned clansman the Lord Chancellor said, quoting the noble Lord, Lord Thomson of Monifieth, on a previous occasion, we Scots are happy to be citizens of two countries. We are both Scots and British; the Welsh Peers here are both Welsh and British; the perhaps few English Peers who are here are English and British. We have managed that most successfully for 300 years. It does not give me schizophrenic crises about who I am. I know who I am; and I am also a European, as the noble Lord, Lord Thomson, said.

Another buzz word is "subsidiarity". I believe that this is a major step forward and acts as a counter-balance to the centralist tendencies which undoubtedly were in the Single European Act. I welcome that. I welcome the idea that we should look carefully at the rules and regulations being made on a Community basis and make sure that we put forward only those which are absolutely essential.

We have heard a lot of stories about the awful rules and regulations coming from Brussels; and, indeed, there are some. However, I must tell your Lordships that up and down Whitehall there are many other rules and regulations which pour out. They are often blamed on Brussels and they are every hit as bad. Perhaps we can all agree that fewer rules and regulations from Brussels and Whitehall might do a great deal of good.

The other buzz word is "referendum". That is the one which I find most difficult to understand because the people who put forward a referendum are telling us that they do not wish to see any of the powers of this Parliament moved to Brussels because they believe that the powers of this Parliament are supremely important. And yet on this vitally important issue they say,"Ah well, we do not think that the powers of this Parliament should be brought to bear on this issue. We think that we should have a referendum on it". I find that a contradictory argument.

The other interesting argument which we have heard was referred to by the noble Lord, Lord Callaghan, who unfortunately is not in his place. He said that the 1975 referendum kept the Labour Party together; but the noble Lord, Lord Jenkins, suggested something quite different. He suggested that the fractures caused by the referendum were the forerunners of the split in that party.

Therefore, I say to my noble friends here and to my friends on the Conservative Benches in the other place that they should be careful about the arguments for a referendum. The two referenda in the 1970s were both put into place because of divisions in the governing party. The blunt fact of the matter is that one of the reasons paraded for this referendum is that there are divisions on this side of the House. I say to my noble friends and to others who are listening that they should remember one thing: since the Labour Party used the referenda as the way to try to paper over cracks in the common market and on devolution, they have not won one single general election. Perhaps those of my noble friends who are keen on a referendum should pause to think about that little lesson of history.

I have always been in favour of the European Community. I do not know whether it is a feature of my generation, but I have always thought that that is the way that we should go. I was more than willing and happy to be a junior officer in the foot soldiers of my noble friend Lady Thatcher when we voted in favour of the Single European Act. I cannot remember any discussion about a referendum or about freedom of voting. All I can remember is some fairly severe whipping which was not directed at me but at some of my then colleagues. I was happy to do that. I went into that Lobby behind my noble friends Lady Thatcher, Lord Tebbit and Lord Parkinson. I now ask myself whether they were telling me the truth when we went into that Lobby or whether they were somehow fooled by those wily European bureaucrats who persuaded them that the treaty was something different from what it was. I do not believe that at all.

They have had some form of conversion on the road since the Single European Act. I suspect that that is more to do with the fact that they no longer hold the reins of power in the Conservative Party. But that is no reason for us to begin to turn our backs on our European colleagues and friends. I hope that we pass the Bill smartly, ratify the treaty and get on with the other and more important issues as regards building a prosperous and outward-looking European Community.

6.3 p.m.

Lord Monkswell

My Lords, I am glad to follow the last speaker and to take up a theme which the noble Lord raised. I believe that it was about four years ago that somebody asked me whether I was for or against Europe. It was in the run-up to the last European Parliamentary elections. My answer then was that it was a totally irrelevant question. I did not believe that the political realities of that time were whether one was in favour of or against Europe but rather the direction which Europe should take. I have not changed my views since then.

It is rather sad and unfortunate that the debate about Maastricht seems to be centring on whether a person is for or against Europe. That is debilitating. We must think about the development of Europe. I was quite struck by the contributions in the debate so far which suggested that the reason that we have had peace for the past 40 years is because we have had the European Community. What has happened to the atomic bomb? Did that not have some effect on peace in Europe? The point is that the relative peace which we have had in Europe for the past 40 years has been because of two factors: first, the innate common sense of the people of Europe and their previous experience in the two great wars; and also, the fact that for 35 of the past 40 years there has been the commitment to full employment. There have been rising living standards right across Europe. In the past 15 years or so that political commitment has disintegrated and as a result of that, we have seen instability.

There are three specific issues about which I should like to speak as regards the Maastricht Treaty. Two of those are comparatively good and one is rather bad. One of the good things is the introduction of the concept of European citizenship. If noble Lords have not read it, it is enshrined in Article 8 and in particular Article 8.b which confers the right of European citizens to stand and vote in local and European elections.

I said that that is positive, which is true; but one difficulty is that an opportunity was lost in that regard because it confers European citizenship only on those citizens of the individual nations of the European Community. Would it not have been that much more progressive, positive and humane to have included everyone who lives within the European Community as a citizen of the European Community?

In that respect, Britain has a comparatively good record compared with some of our continental neighbours. By and large, the immigrants and guest workers which came to this country in the 1950s and 1960s have UK citizenship. But one of the difficulties which beset Europe is that those immigrants and guest workers in Germany and France—Algerians in France and Turks and Yugoslays in Germany—do not have citizenship of those countries. Therefore, they are effectively without rights in our European Community even though they may have lived among us for many years. To confer citizenship on those people living within the European Community, unfortunately, is a lost opportunity.

Perhaps I may turn to one of the biggest problems of the Maastricht Treaty—that is, the way in which it enshrines the monetarist philosophy which we have seen do so much damage over the past 15 to 20 years. If one thinks in terms of the two depressions leading to mass unemployment in this country over the past 15 years—in the early 1980s and in the past few years —that has been as a result of a monetarist philosophy, a belief in sound money. It is like the old gold standard coming back. There has been an almost total disregard for human beings and the misery to which those policies give rise. It is a fundamental problem for the European Community that this Treaty of Maastricht enshrines effectively that philosophy of monetarism.

As I said earlier, for 35 years after the war there was a political consensus right across the political spectrum as regards full employment, cheap food, good housing, health care and education for all and adequate financial support for those unable to work because they were too young, too sick, disabled or too old. It is interesting to note that those aspirations are effectively enshrined in the social protocol. Bearing in mind the fact, as my noble friend Lord Bruce of Donington pointed out, that many people may not have read the Treaty of Maastricht, I should like to quote a short extract. It comes from Article 1 of the Agreement on Social Policy. It says: The Community and the Member States shall have as their objectives the promotion of employment, improved living and working conditions, proper social protection, dialogue between management and labour, the development of human resources with a view to lasting high employment and the combating of exclusion". By opting out of the Protocol on Social Policy, the Government of the United Kingdom have effectively said that they do not believe that it is an objective of their policy. I find it profoundly disturbing that a Government of the UK should say that it is not their policy to promote full employment, equitable working conditions and other benefits.

Over the past two days there has been some debate about a referendum on the subject of Maastricht. I believe it was the noble Lord, Lord Jenkins of Hillhead, who provided the most cogent argument in favour of a referendum. He explained that it would effectively tear the Tory Party apart. While I would welcome that happening—indeed, I think that it would be beneficial for the country—to upset the structures of democracy as they operate here in order to seek party advantage would not be a responsible attitude to take.

The other place in our Parliament is the national forum for democracy in this country. Although we cannot stand or vote for membership of that place, we have a responsibility. In fact, we are summoned to Parliament to give our advice: we are an advisory chamber. Our advice to the other place must be to resist calls for a referendum on this curate's egg of a treaty.

Rab Butler said: Politics is the Art of the Possible". As I said at the beginning of my remarks, I do not see the debate as being one about whether a person is in favour or anti Europe; I see it as a debate about the future of Europe. But without the commitment of the Government of this country and the people of this country to the human dimension of Europe contained in the Protocol on Social Policy, I do not think that we are fit to be members of the European Community.

6.14 p.m.

Lord Reay

My Lords, I firmly believe that we should ratify the Maastricht Treaty—the negotiation of which only 18 months ago was generally considered such a triumph for the Prime Minister. The treaty is not ideal for us of course. How could it be? It was negotiated with 11 other sovereign states, some of whom saw it—indeed, still see it—as a step towards a federal Europe; for them, of course, it was not ideal either. For us it was, I believe, an acceptable compromise. We succeeded in mitigating the effects of much of what we did not like and in negotiating our exclusion from what we liked least of all; namely, the Social Chapter and any commitment now to join the final stage of economic and monetary union.

In other respects we managed to turn the treaty to our advantage. As my noble and learned friend the Lord Chancellor explained, we were in favour of greater co-operation in foreign and security policy, in fighting cross-border crime and in immigration matters. That is something which can now be carried forward but on an inter-governmental basis, outside the framework of the Community's institutions.

We wanted to check the Community's centralising tendency. Article 3b on subsidiarity will for the first time place the onus on those who would advocate Community law to justify the necessity for it and provide a clear presumption in favour of national law as opposed to Community law.

We have long complained that other member states pass Community laws without having any intention of complying with them; the Court of Justice will now receive powers to fine member states if they fail to carry out their Community obligations. We constantly deplore, not least in the House, the prevalence of fraud on Community funds. The Court of Auditors' role is to be reinforced and treaty signatories are to renew a pledge to boost the fight against fraud. We lambaste the Commission for its unaccountability; it is to be made more—not much more but somewhat more—accountable to the European Parliament. In all those respects what exists after Maastricht will represent a solid improvement from our point of view over what existed before.

For us not to ratify now would, I believe, be madness. It would plunge Europe into chaos and confusion. It would stop the process of enlargement, of which we are in favour, dead in its tracks. It would anger the other member states and isolate us from them. It would be incomprehensible to them that at such an eleventh hour we could wilfully abandon the results of so much effort. But, above all, a decision not to ratify would be a choice to place ourselves outside Europe's decision-making process for the future. We would be back in the situation of being on the outside looking in—a situation we gradually discovered to be intolerable in the years after the war which led up to our original application to join the Community.

We would not only be putting ourselves back in that position —one that we spent some 15 years trying to get out of—but also into the position that today we see so many EFTA countries trying to get out of, as my noble friend Lord Mackay of Ardbrecknish pointed out, as, one after the other, they apply for Community membership. So much for EFTA as a viable alternative to the European Community, which was something we used to hear about in the past. Even though the single market is being extended under the European economic area to cover EFTA countries, still those countries want to join the Community.

Nothing could more clearly demonstrate the loneliness and sense of exclusion felt by those countries on the periphery of the Community as they look on while decisions are taken affecting their vital national interests (and, of course, the nature of those vital interests differs in each case) without them having a say in how those decisions are arrived at.

There is an enormous role for us in Europe—fighting for free trade against the very widespread and resilient forces of protection and fighting those same forces to keep open the Community towards Eastern Europe for trade, even for European Community membership, which will be a most difficult task, as other noble Lords have pointed out. We must join our influence to others who wish to make the Community's institutions open and accountable and keep in check the Commission. We must put and press our own proposals to the next inter-governmental conference and at the meeting before that. We must exert ourselves to the utmost to produce a common European foreign policy, and nowhere is that more necessary than in Yugoslavia. Nothing could be, or has been, more disastrous than separate national action by Western European countries in the Balkans. In those instances, and every other instance, our influence will not be maximised but will be reduced, perhaps drastically, if we refuse to ratify the Maastricht Treaty.

As regards a referendum, I join those who said yesterday that it was a little late to start thinking about that now. Moreover, from some of the debate one might have concluded that it was principles which generally decided such a matter. I have always understood that the 1975 referendum was a device to hold the Labour Party and the Labour Cabinet together, whatever its later effect. No doubt my right honourable friend the Prime Minister might have considered the same course of action if he had found himself in the same need. He did not, so he stuck to our traditional parliamentary way of doing things. I do not believe that we should seek to reverse that action now.

We should remember why we joined the Community in the first place. Surely we joined because we felt that we no longer had the power to afford to remain independent and detached from developments on the Continent of Europe. Behind the opposition to Maastricht I still sense the influence and the reflexes of those who instinctively feel that we should not become involved in Continental entanglements. We cannot, now less than ever, succeed in isolating ourselves splendidly from the rest of Europe. If we try to, Europe—as she always has—will return to present us with the outcome of developments far less appealing to us than if we had remained involved throughout.

In the 19th century, in the decades after the Congress of Vienna (and those other peace conferences presided over by Metternich and Castlereagh which sought to regulate the affairs of Europe) we turned our back on Europe and abandoned it to its devices. Henry Kissinger in his book A World Restored records the beginning of that process of withdrawal from Europe. He puts it thus: The death of Castlereagh (1822) marked a turning point in European Politics. Henceforth British policy became as insular as the mentality of its people". Eventually, of course, later in the century, we had to return to Europe to form desperate alliances as wars loomed.

Today it is not war but union with which we feel threatened. It is not an assault but an embrace which we are called upon to resist. That is progress. Because it is not war but union which threatens, once again the gap is exposed—as it has been ever since we applied to join the Community—between government policy on the one hand and the insular mentality referred to by Henry Kissinger on the other. That insular mentality is now much diminished. I believe that it has lost the power to affect the main orientation of this country's foreign policy, although I do not believe that it has lost the power to affect the enthusiasm and commitment with which any government are able to discharge that policy.

Like my noble friend Lord Cockfield, I look forward to the day—if one can describe oneself as looking forward to a day which one does not necessarily expect to arrive in one's own lifetime—when the existence of the insular mentality becomes insignificant and the energies of this country are released to play a full and constructive part in Europe's affairs, more constructive than any government have been able to play so far.

Today the insular element is not insignificant. It is alive and kicking, and preparing to amend. I fervently hope that it will not succeed in diminishing our influence in the councils of the Community, which I believe would be the effect if we refuse to ratify the Maastricht Treaty.

6.24 p.m.

Baroness O'Cathain

My Lords, I am sure that brevity will be highly commended in this marathon debate on the Second Reading of the European Communities (Amendment) Bill. It is also essential if the general stupor and indifference which the word Maastricht evokes outside Parliament is not to be mirrored inside Parliament.

To that end I shall make just four points. Those points have been made already in various ways by others Members of your Lordships' House. Indeed, I am indebted to the counting ability of the noble Lord, Lord Ewing of Kirkford, for alerting me to the fact I that I am speaker No. 91 in this debate.

Before I make my four points, and as an aside, I should like to state that constant references to how the Maastricht Treaty applies to Britain almost certainly irritate those other inhabitants of the United Kingdom who are not covered by the word "Britain". A great many noble Lords have fallen into that trap. Northern Ireland exists and is covered by the treaty, but it is not covered by the word "Britain".

I return to my four points. First, I believe that it is imperative that the United Kingdom reasserts its influence in Europe. We can only do that by being fully paid-up members of the Community, committed to its ideals and prepared to work to make the Community work.

Some months ago in this Chamber a noble Lord —and I fear I do not remember his name—made the point that we account for 1 per cent. of the world's population. That is a self-evident fact and a simple mathematical calculation could have made me aware of that many years ago. However, that statement set me thinking about where the United Kingdom scores disproportionately to its size in world terms. The areas are legion, but influencing world political events has to be the greatest.

The United Kingdom's influence spreads throughout the world and is most highly regarded. The United Kingdom's influence has been manifest within the Community ever since we joined. It must continue to be so. I believe that our influence worldwide is enhanced by being members of the European Community. That is the first reason why I list myself as being pro Maastricht.

My second point is that it is a brave person who stands up against all other members of an alliance, and that is what the Prime Minister did when he negotiated the opt-out clause concerning the social contract. Much has been said about that action during the course of the debate. It is a topic which evokes subjectivity bordering on hysteria from both sides of the Maastricht divide. I wish to quote a few statistics relating to the additional costs of social charges over and above basic wage costs.

Social charges in other European Community countries account for the following additional percentages on basic wage costs: in Germany, 75 per cent.; in France, 83 per cent.; in Italy, 98.4 per cent.; and in the Community as a whole, 70.9 per cent. By contrast, the figure for the United Kingdom is 35.8 per cent. For a most important trading competitor, the United States, it is 36.4 per cent.

In a speech to the CBI annual dinner last month, the president of the CBI, Sir Michael Angus, pointed out that within the past 12 years Europe as a whole has lost 20 per cent. of its previous share of world trade in manufactured goods. The point has already been made by the noble Lord, Lord Aldington, but I believe that the main reason has been the burden of social costs. Do we want our manufacturing industry to he as burdened as the manufacturing industries of Germany, France and Italy?

We have worked long and hard, and suffered genuine deprivation in terms of redundancies and increased unemployment, while making our industrial base more competitive in world terms. Do we want to throw all that away? I am sure that the answer is, "No". Hence, my second point is that we should resist every single attempt to make us adhere to the social chapter. A German friend put it much more succinctly: "The UK stand on the Social Charter is the only way".

And on a subsidiary point: it might not come amiss to give credit to the Prime Minister for a brilliant piece of negotiation in Maastricht. When all the endless discussion about Maastricht is ended, when we have taken our rightful place at the centre of the Community again, perhaps we should lean on other member states and convince them of the need to regain their competitiveness by reducing their social charges. I am not talking about a cheap, slave labour economy, as has been stated today. I am talking about taking a lead, reassessing influence, and ensuring that the advances made in our international competitiveness should be maintained, and indeed enhanced.

My third point is this. A great deal of anxiety has been expressed since the Maastricht Treaty was signed to the effect that the Community was becoming more inward looking. Perhaps there is some justification for that assertion. One way of overcoming that worry is to push firmly for enlargement. The addition of the Scandinavian countries, Austria and Switzerland, would guarantee that the Community would be a truly major international grouping with the potential to become a major power bloc in the world—small in relative population size but huge in influence. With the United Kingdom playing a pivotal role in the Community, the enlargement would be both easier for those applicant countries and almost certainly more attractive. We need to be in there, running the show rather than over here on the sidelines carping and criticising.

As a subsidiary point again, would it be possible to ensure that we send our best civil servants to Brussels? I suggest that a posting to the Berlaymont should be regarded as a necessity for the advancement to the top jobs in this country. That should minimise the charges of, "Bureaucracy run wild".

My fourth and final point is this. What proportion of our citizenry has read and understood the treaty? What proportion of those in our Palace of Westminster has read and understood the treaty? That was expressed most beautifully by the noble Lord, Lord Bruce of Donington. Is it general apathy or is it our fault that we have not insisted that each household in the country should have an easy-to-understand document giving the salient points? The Republic of Ireland circulated such a document to every household. Why did we not do likewise? With hindsight, it might have avoided a lot of misinformed jingoistic comment throughout the country.

Whatever the reason for not ensuring that the population as a whole is as well informed as is possible, it is not disputed that the general public really does not have a clue about the treaty. To my astonishment, I have not met anyone unconnected with Parliament who realises that the treaty is an update of the single market Act which, in turn is an update of the Treaty of Rome. With that general level of lack of knowledge, it would be utterly foolhardy to subject the electorate to a referendum on the treaty. Parliament should, and must, decide. I pray that common sense prevails and that we can take our rightful place as the moulders of the new Europe. I echo the hope expressed by the noble and learned Lord the Lord Chancellor this afternoon that the Bill can proceed without further amendment.

6.33 p.m.

Lord Harmar-Nicholls

My Lords, I would not have missed the last two days for a great deal. It was like seeing the rerun of an old film with the same characters still appearing in it. We had Lionel Barrymore—noble Lords can fit their own figure with that—and Douglas Fairbanks with all his "go". But the theme did not reflect reality. I do not believe that the debate today has reflected the reality of our duty as parliamentarians. We have gone over all the deep meanings of the Treaty of Rome and what we believe that Maastricht might accomplish. But we have not concentrated on our duty as Members of Parliament who should have the ultimate say in the way that this country progresses.

I was rather disturbed to hear the noble and learned Lord the Lord Chancellor—he has no greater supporter in this House than myself—conclude his opening speech by stating that he wanted the Bill to go back without amendment. Does that mean that we do not have a Committee stage? What is the point, if we cannot carry to completion whatever decisions in debate we may think right because we cannot amend?

The Lord Chancellor

My Lords, I was referring to the speech of the noble Lord, Lord Richard. He asked whether the Government were seeking to propose amendments to the Bill as it has come from another place and whether, in particular, we were content with the way in which the Bill had been amended there. My answer to that question was, yes. It does not of course mean that there will not be a Committee stage. It means that so far as concerns the Government and myself, I am content with the Bill as it is. It does not preclude any noble Lord from putting forward amendments in Committee. I am sure that some of your Lordships may wish to do that. We shall have some argument about them. The House may then decide on an amendment either by voices or by votes. I do not believe that my noble friend need have any fear that his opportunities for further debate at the conclusion of speeches today will be in any way foreclosed.

Lord Harmar-Nicholls

My Lords, it is very kind of the noble and learned Lord to clarify that. The noble and learned Lord the Lord Chancellor, a Member of the Cabinet, a senior member of the Government, has made it perfectly clear that we are quite in order if we pass amendments in order to allow the House of Commons to have a second look at this important matter. Before that clarification, it was possible that he was advising the House that government would look with disfavour on any amendments.

We have had different views expressed which were obviously sincere, although different in their impact and meaning. They were based on much experience. I believe that it is vital that this House should use its powers to give the other place a chance for second thoughts. We cannot kill the Bill. It is not even right that we should try to do so. We have no power to stop the Bill. However, the other place has the power to amend the Bill if it believes that there are weaknesses in it. The debate has indicated that in the view of this House there is not a clear, clean bill of health with regard to the Maastricht Treaty. If there is real doubt expressed by sincere people who are trying hard to play their part as Members of Parliament I believe that that doubt should be taken into account.

I have attended in one or other of the Houses now for 43 years. I have never had experience of a Bill where the evidence indicates that this House ought to use its power to suggest that another place considers the issue again. At the end of the day we cannot tell another place what to do. It is its decision and it is right that it should be because its Members represent the people of this country. It is vital that they should be seen to have given proper thought to the matter.

We are saying to the other place in a large proportion of the contributions that have been made today: "We feel that in several parts of the Bill you have made a mistake; amendments could and should be made". We should use the full parliamentary procedure that is allowed to us. That is why there is a second Chamber, as I understand it. Our duty is to revise and amend where we can, but it is mainly to give the other place, which is the place of power—we have no wish to interfere with it—a chance to think again.

That is why I believe that when we reach the Committee stage it is vital that we should try our hardest to pass an amendment which will at least give the other place a chance for a second look. The amendment which I personally hoped for, because I believe it is fully justified by the evidence in the speeches which have been made, is the one suggesting that the other place ought to reconsider the possibility of a referendum. It is part of the armoury of Parliament. It is not used and ought not to be used often.

I am a great supporter of the system where Members of Parliament have the power of attorney from their constituents and are expected to delve deeper than normal people can to come to a conclusion. Like other noble Lords, I accept the advice that if someone is given power of attorney, by and large they accept it. That is why I believe that when we reach the amendments in Committee we should pass that proposal.

The noble and learned Lord said that we shall have a Committee stage and it is right that we should do so. I hope that when we reach it there will be no attempt to filibuster, no attempt at deliberately stretching out the arguments. I believe that there will be no attempt to pretend that we can kill the Bill; we cannot and ought not to wish to do so. We shall debate the clauses in the Bill and the amendments and I hope that we shall deal with them in the way in which we always deal with them. However, when we reach the amendment proposing a referendum, it would be a suggestion to the other place: "This is a matter which is worthy of a second look by you". I hope we shall succeed in getting that through.

I was interested when the noble Lord, Lord Jenkins of Hillhead, showed such a fatherly interest in the future welfare of the Tory Party. It was touching. He said that if we were not careful we would do things which would make it difficult for the Tory Party to win an election in the future. The last election which I fought was my 18th and I do not believe that anyone in either House has fought more. It is on that experience and evidence that I presume to say that the one thing which is likely to interfere with winning a seat is if we, the Tory Government, do not reconsider this.

If matters go wrong with Maastricht—and certain things may well go wrong because of events—and if there is a disgruntled feeling in the country as a consequence, it is the Government in power at the time when the Bill was passed who will be responsible. The fact that they had the support of the Opposition and Liberal Benches who egged them on will be forgotten. It is not without interest to me that on one or two occasions in the other place the Labour Party has abstained and on other occasions has gone half-way—very understandably, as politics is the art of the possible—and it has put itself in a position where it can say: "We didn't go along with that; we abstained". The full responsibility will be with the Tory Party because a Tory Government were in power and will be looked upon as responsible for the legislation.

From the experience of my elections—and that is the only reason I mention this—when one fights an election, wherever it is, because certain things have happened I can almost guarantee that people will say —and if they do not think of it themselves, they will be reminded to say it by the Opposition—"Ireland, Denmark and France can have a referendum, but that toffee-nosed Tory crowd don't have enough confidence in the British people being capable of holding an opinion of their own". That is what will be said, just as we are supposed to have no compassion. That has lost many an election. We have all the compassion of anyone else and we are supposed to be more efficient but not as compassionate. That has cost us dear. If we give the impression that we, the Tory Government, do not have enough confidence in the people of the country to have a view on something which will affect their lives more than anything that comes before Parliament for some time, I tell the noble Lord, Lord Jenkins, that it will have the worst effect on the electoral possibilities of the Government. That is the appeal I make to the Government.

It is only proper that we should think in terms of partnership with Europe. There is no doubt about that. It started with the Iron and Steel Community, which worked well. We were all in favour of that because it was confined to an area which was understood and was limited. The community had a specific job to do. Then, as has been pointed out in the debate, it is perfectly true that the wonderful idea of a unified Europe was brought up by Mr. Monnet. It came just at a time when we were losing the Empire and our general position in the world was not what it had been. Someone said that we had lost an empire and did not have a role. Yes, I suppose that the people in charge were looking round, saying: "Now we have not got a Commonwealth, we have no necessity for a great navy and all the powers we had before; Europe is a bright, poetic idea". It had great appeal after the war. People did not talk about the trading side to begin with. It was clearly put by my noble friend Lord Whitelaw but it had nothing to do with the treaty. That is not so. It was very attractive. His father and brother were killed. He was anti-war. Who was not anti-war? If one could produce any argument which made it look as though one was against war, it had to be attractive. It would be inhuman if it were not.

At that stage, we had to move from one thing to another and one or two of us—I can speak only for myself—wanted something new. I thought that the Atlantic alliance had a better prospect than the European alliance. Both ideas were sound. There was nothing against either. They were just two different points of view. One side said: "Europe is the best group to join and from which to develop"; the other said: "No, things are moving to the Pacific with the American, Canadian and even the Japanese developments". Those were different points of view.

My colleagues went for Europe but I did not think that was the right choice. When it was accepted as part of the official policy of the party—in those days I was a junior Minister and had been a Minister for eight years—I thought it was not right for me as a member of the Government to go along with that on a most important issue and I resigned. I did so in order to show that I was as ambitious as anyone else. I had been made a Minister after being in the House only four years, which was very good. I was interested. I made my plans in a way that would have made that all right. I thought the issue was big enough to make that proper gesture.

It was very interesting the way that Mr. Harold Macmillan (as he was then) dealt with it as compared with today. I admired him. We were good friends and did lots of things together. It was my 300,000 houses which helped to bring him right to the top when he was the Minister responsible. The day he accepted my resignation he had me gazetted as a baronet. That was the way it was dealt with in those days. It confused my constituents. They did not know what was happening. It gave them something to congratulate me on. That was the way it worked if you wanted to win. That was when one had people who knew the game, knew the politics and had the tactics.

I know the reason why Mr. Macmillan, who is the one who started it, wanted to get into Europe. He believed in it. He was one who genuinely came down on the side of Europe rather than the Atlantic alliance. He was an able and delightful man. One of his great attractions was that he enjoyed being the pioneer, the first one to do something new, and that sort of urge was one of the things that helped him along. I do not attack him for that. When one has the weapons, provided that they are legitimate and provided that they do not hurt anybody, one has a duty to use them.

So far as the Maastricht Treaty and this House are concerned, I believe that we have a duty to see that the Bill goes back again to the other place. I hope that we shall send it back on the basis of recommending a referendum. I remember, when I was coming to take my seat in 1950, travelling up with Stanley Evans. (Noble Lords look at the clock. They find the clock more important.) He said: "When you get there you will find a rarefied atmosphere. They all have their views and all the things which are important inside the House are not so important when you get out into the country". On this matter it is vital that the country should know what it is all about and that it should be in the position of having agreed to whatever line is taken.

With that in mind, I hope that the wealth of information and knowledge which comes from this debate will be taken into account by my noble friends and their colleagues, so that when we get to the Committee stage we shall have done our duty. I believe that as a consequence the country will be more tranquil about the things that may flow from it.

6.53 p.m.

Lord Ardwick

My Lords, I think it might be useful if I were to remind everybody and myself that we have now been debating for nearly seven hours and we are not yet half way through the list of speakers. In these circumstances it would be self-indulgent and a cruel, if not unusual, punishment of others if at this time of the night I tried to put more than the ghost of a case for supporting the Bill.

I was intimidated by the length of the list of speakers. But so many people asked me: "Are you taking part in the debate?" it became a kind of chic thing to do. So there is this magnificent number for the debate.

I cannot be silent because I was such a very early convert to the post-war European movement, and I have remained true to it ever since. In 1948 I covered the congress at The Hague for the Manchester Guardian, and heard Bertrand Russell say over dinner that the Russians could be at the Channel ports whenever they wished. Others round the table agreed. But for them the nascent European movement was the new beginning of a search for security. But the congress also had its moral and economic side. Europeanist eloquence knew no restraint. That kind of eloquence has almost passed from this Parliament. But we did have an example of it yesterday in the fervent speech of the noble Viscount, Lord Tonypandy. In Europe when one came to The Hague, almost everybody spoke like that but in foreign languages; and of course they said precisely the opposite of what the noble Viscount said. They were against nationalism and for the whole of Europe.

There were two camps, the functionalists and the federalists: those who were for European co-operation and those who were for integration. It is still that way 45 years later. Randolph Churchill, with his coarse wit, called the federalists the "federasts". But nobody had ever had a pejorative term for the functionalists except those who were against the whole thing. I myself have always been a cowardly functionalist, happily believing that as the functions developed they would inevitably require measures of federal integration. We reached that point long ago. But we never had the row about it that we have had in this country in 1993.

I rejoice that my old party has changed its policy. Our waverings over the years over Europe have caused me and other members of the Labour In Europe movement much pain and sometimes despair. But we stayed with the party. We worked for reform within the party. In those days, Labour, after deep thought and much debate was firmly committed to Europe and to Maastricht—Maastricht with the social chapter attached to it. This does not mean that we find the treaty perfect. Yesterday the noble Baroness, Lady Williams, put it correctly. Maastricht is but the beginning of a process, not the end. We shall have much to say on the long journey.

The noble and learned Lord, Lord Wilberforce, reminded us how we were bound 30 years ago by the Treaty of Rome to accede to regulations made by the Community. Now the endorsement by the noble Baroness, Lady Thatcher, of the Single European Act included the phrase: to transform relations as a whole among their states into a European Union". When we joined the Community it certainly had the will to union. It had then all the confidence of a Community that was enjoying full employment, economic growth, high investment and the Bretton Woods system of stable currency rates. There, side by side with all this, was the security provided by NATO, ensured by America's political and military firmness. It was a social market paradise, expected to have a single currency within a decade of our joining it.

Alas, as we committed ourselves to Europe the long post-war boom was coming to an end and the era of floating currencies had begun. Since then the Community has known years of stagnation and years of well being. But it can make genuine progress towards unity only when the economies are prosperous and confident governments enjoy the support of their electorates. It was in the hopeful years of the mid-1980s that the Single European Act was passed, and hopes were still there when the Maastricht Treaty was proposed, though they were fading on its completion.

The nature of the new treaty, as the noble and learned Lord, Lord Wilberforce, put it yesterday, was to give the Community new express powers in the place of the implied powers which had been exercised. There is in fact, for all the claims of its opponents, no vast constitutional change under the Maastricht Treaty. But the clouds are back—dark black clouds of unemployment, which threaten to reach 12 per cent. of the Community. There are threats to the stability of currencies. There is low investment, and now it appears that there will be contraction instead of economic growth. It is an age in which no national government within the Community is loved or its Prime Minister regarded as a hero. It is an anxious and troubled Community that the Scandinavians are poised to enter. It is a Community led by a Germany whose self-confidence has been undermined by the economic shock of absorbing East Germany. The first concern of the Community must be to wrestle with the problem of unemployment. Until that is dealt with, any idea of moving to a single currency is nonsense.

The Community needs new and strengthened institutions to meet the dangerous problems caused by the collapse of communism and the creation of a dangerous nationalism fired by ethnic hatred or by ethnic fear. Other Yugoslavias threaten.

Then there are the long transitional arrangements that we shall have to devise to help the countries of eastern Europe towards eventual full membership. We know where Europe begins. We still have no definition of where it ends. There is also a new partnership to be forged with the United States, whose relations with Europe and the European scene have been profoundly changed by the end of the communist threat. All those problems are matters far beyond the capacity of the mere free trade area. We shall have to look beyond Maastricht for a European Union that would enable Europe to have a wise and competent voice in an unstable world.

7.2 p.m.

Baroness Elles

My Lords, there is one fundamental question facing this House; namely, is it in the interests of Britain to ratify the Maastricht Treaty? To me that is the one question that we are being asked to consider and to which we are trying to find the right answer. In her concluding remarks, the noble Baroness, Lady Blackstone, referred to the end of the cold war and to the birth of democracy in eastern European states. There was also the fall of the Berlin Wall and other events such as the collapse of the Soviet Union and the creation of the CIS.

In a funny way, although it was the end of the cold war, those events created greater political instability than there was before. That collection of events, referred to as "the bonfire of certainties", left a gap in the certain political world that we had faced before and gave me some fears for the young friends mentioned by the noble Lord, Lord Stoddart, in his very interesting speech. I hope that I shall not misquote him but I believe that he referred to a letter from a young Oxford student saying that what he and his colleagues wanted was a return to the values of former generations.

I suppose that I can call myself a member of one of those former generations. In the war I spent four years in the forces. One of the conclusions to which I came in 1945, shared, I am sure, by many noble Lords, was that I would spend my life trying to stop such a war happening again. I happened to be at a place called Bletchley. I had to read telegrams by our former enemies and know what was happening in the countries which they occupied. It was not pleasant reading.

So when, in the late 1960s and in the 1970s, there was talk of our joining the European Community, as a mother I naturally thought about my children (and indeed all other children) and hoped that they would be spared the kind of horrors that had taken place between 1939 and 1945. We now seem to be repeating that discussion, although now I am speaking on behalf of my grandchildren rather than my children. However, my thoughts, convictions, and hopes remain the same. I trust that all noble Lords, whether or not they are in favour of ratifying the Maastricht Treaty, share those sentiments. I believe that they reflect the feelings of the vast majority of people in this country and in other countries of the Community.

Another fundamental point concerns the terminology expressed in "European union". One very senior politician, who shall be nameless, was quoted as saying, "I hate the term 'European union' because of all that it connotes. Is it a federal system or is it a United States of Europe?" As the noble and learned Lord, Lord Wilberforce, and my noble friend Lord Cockfield pointed out yesterday, the term "European union" has floated through vast numbers of documents connected with the European Community over past years. Certainly, it was in the Stuttgart Declaration of 1983 and it was enshrined in the Single European Act.

I thought it might be helpful to make four very brief comments on sectors, working within the terms of the European Union, which might give guidance towards the future direction of the Community. The first field that I should like to take as an example is that of European Community law where, over the past five years, in implementing the excellent programme of the noble Lord, Lord Cockfield, for the creation of a single European market, both this House, another place, 11 other national parliaments and the European Parliament have been considering the same legal texts, all of which have been adopted over those years in order to create the necessary legal order for establishing a single European market.

All those 250 pieces of legislation—there will be more—were concurrently introduced into the member states. Is that federalism? Is it a closer union? What is the technical, constitutional term for that legal order? My noble and learned friend the Lord Chancellor referred to the European Community legal order as sui generis, and I think that it. is. I believe that that is precisely how we have to look at the term "European union". We must try to get away from the anathema and doubt that is felt over that term.

Secondly, we have seen great economic integration within member states. We know that there has been a world recession and that things are not perfect with the economy either in this country or in other member states. We accept that. Nevertheless, if one looks at the relationship of the European Economic Community with other parts of the world, it will be seen that we have a standard of living which is probably among the highest. And we have the best welfare provisions. That is surely something of which we in the European Community can be proud. Of course, everything is not right. But there is no man-made organisation which can pretend that everything is perfect. Improvements can always be made.

However, why do the four EFTA countries, which have had such a successful existence, now want to join us? Why do the Eastern and Central European countries want to join the Community? If it is so dreadful, that would be the last thing they would want to do. It was the same with Greece, Spain and Portugal, which all had difficult political systems alien to ours. They wanted to be within the European Community to ensure that the democratic process was maintained. Even the European Parliament—often understandably despised—ensures that every five years democratic elections are held for membership. That is a guarantee, regardless of what happens in a member state, that democracy prevails throughout the European Community. We all know from our study of economics that it is only in successful democracies that one has the possibility of securing a successful economy, prosperity and individual freedom.

Even now, the European Community gives two-thirds of the total contribution to Central and Eastern European states in order to encourage their democracies to flourish and to help them to create infrastructures which will enable them to benefit from a democratic system. It is understandable that when one has a new democracy, one hopes to aspire to the economic standards of countries next door with democratic systems. As we all know, that is not something that happens overnight.

In an interesting article about Hong Kong yesterday, the noble Lord, Lord Rees-Mogg, pointed out that political power is always shaped by economic reality. We have the economic reality of the European Community and that is what has led to a development even within the European Union, or whatever one likes to call it. It has given political power—whether or not one likes it—to the European Community.

My noble friend Lord Gilmour referred yesterday to the shared foreign policy which started with the Davignon Report of 1970. It was later developed in the London Report of 1982—my noble friend Lord Carrington was Foreign Secretary at the time—when further opportunities were created for European member states to share foreign policy on issues of common concern. Of course, much of that came from external pressure. People will remember that in the early 1970s there was an oil crisis—a Middle East crisis —and a whole series of crises outside the Community which forced member states to try and adopt co-operative positions in order to deal with those problems.

There is no better example of that than what happened in the United Nations. In the early 1970s everybody would ask what the Soviet Union and its satellites were doing? What were the Seven doing? By the end of the 1970s, it was: what are the Nine doing? What are the European Economic Community countries doing, when they have got their act together, on well over 70 per cent. or 80 per cent. of the resolutions before the United Nations?

That was the beginning of the giving of more power and greater reality to the work of the United Nations, faced as it is with many global issues. It is co-operation between the member states that has enabled Europe to play a real role in global affairs through the United Nations and under its charter. Indeed, the first resolution of the UN, where Chapter 8 was concerned, referred to regional arrangements and the role of Europe in dealing with certain problems outside the European Community.

I know that many people blame the European Community for not being able to solve the former Yugoslavia's problems. In my view, nobody can solve them—except the former Yugoslays. Whatever else we do, we must help with humanitarian aid to the best of our ability. To blame any sector of world or regional government, or member state, for not being able to help the former Yugoslav peoples at this time is a useless and invalid criticism.

Lord Bruce of Donington

My Lords, I am most grateful to the noble Baroness for giving way. Perhaps I may press her further on the remark she made about the United Nations in connection with the development of the European Community. Is she in favour of the United Kingdom giving up its seat on the Security Council and substituting representatives from the European Community?

Baroness Elles

My Lords, I am very glad that the noble Lord, Lord Bruce of Donington, asks me that question. In no way would I consider it proper or right for the United Kingdom—or indeed France—to give up their seats. Those two member states were involved in the original setting up of the Security Council when the charter was drawn up, adopted and signed. Britain should be at the United Nations in its present and, I hope, continuing role.

To deal with common, foreign and security policy as far as Maastricht is concerned, I believe that the noble Lord, Lord Boston of Faversham, said that this was an advantage. The European Communities Select Committee of your Lordships' House is considering how to scrutinise this area of activity. It is a very welcome development. Under European political co-operation many things happened in foreign policy, of which national parliaments and the European Parliament were never informed and knew nothing.

The fourth area deals with home and justice affairs under Title VI, Article K, of the Maastricht Treaty. Again, under the able chairmanship of the noble Lord, Lord Boston of Faversham, a study is being made of how to ensure that that area of Community policy is scrutinised by our Parliament and other national parliaments. Many noble Lords will be aware that until the Maastricht Treaty is ratified and comes into force areas such as terrorism, drugs and immigration are dealt with in what I call secret conclave. Unless one happens to be within that secret conclave, no one knows what is going on and what is being decided. At last, thanks to the Maastricht Treaty, those documents will be made available to national parliaments for scrutiny. Whatever one's views about the treaty one must accept that this is advantageous from the point of view of reducing some of the democratic deficit.

I wish to refer to the declaration on the role of national parliaments in the European Union, if only to assure the noble Lord, Lord Bruce of Donington, that at least some of us have read some of the treaty. It provides that, the governments of the Member states will ensure, inter alia, that national Parliaments receive Commission proposals for legislation in good time for information or possible examination". This is the first time that the roles of national parliaments, together with that of the European Parliament, have been recognised as the rightful authority in the democratic system for the study of European Communit draft legislation before it comes into force. I am sure that all noble Lords, whatever their views on the treaty, will welcome that.

I believe that what has been done in the Community in those four sectors will provide a guideline to the future of the EC. Fear of the future and of the meaning of European union is understandable. But fear that prevents the commitment and ability of Britain to take part in the shaping of the future of Europe for our children, grandchildren and successors is both unforgiveable and, in my view, entirely incomprehensible.

7.18 p.m.

Lord Greenhill of Harrow

My Lords, I hope I may be spared a minute to speak about the tour de force of the noble Lord, Lord Bruce of Donington, on the relationship between civil servants and politicians. Whilst he spoke my first thought was to be thankful that he was not a Minister when I was in Whitehall. Then I thought that, if only I had his histrionic flair, what a reply I could give to him on civil servants' views of how politicians appeared to them. But I would have done that in good humour and omitted from any performance of mine any former Ministers who found themselves in this Chamber.

To my regret, by reason of an overriding commitment I have not been able each day to attend the debate in this House for more than a limited time. Sadly, I have been deprived of hearing at first hand or viva voce the views of the most authoritative Members of this House. However, I do not believe that they would have changed the nature of what I propose to say. I see from the Official Report that much of what I would have said has already been said over and over again—and much more eloquently than I could have said it. I shall therefore speak very briefly and make only three points. First, on whether to ratify the treaty or not; secondly, on the suitability of a referendum in the present circumstances; and, thirdly, on whether there are not more important issues than a headlong development of a European union, issues which our own and other governments ought urgently to address.

The European committees of this House, under the chairmanship of the noble Baroness, Lady Serota, the noble Lord, Lord Aldington, and others, have kept us aware of the hazards of various European policies. However, regrettably, party political conflicts have caused delay in decisions and we are now faced with the urgent question of whether to ratify the treaty now or seek some way of escape, perhaps by a referendum. I am satisfied myself that it is too late to change course. It would be right to ratify the treaty, imperfect as it is in certain respects. We are certainly destined to have a place in the future Europe and the shape of that destiny has yet to be decided. It would be a great mistake to rush it now on a fixed timetable.

As for a referendum, we should remind ourselves—the noble Lord, Lord Sherfield, referred to this point—of the French vote in relation to President Mitterrand, and also recall how the votes were cast at the last election in this country for the European Parliament. In both cases votes were cast not on the substance of the matter but on the public view of the President and the Prime Minister of the day. That would surely happen if we had a referendum now.

The Irish referendum was quoted by the noble Lord, Lord Blake, as an example which we might follow. But I suggest the fact that the Irish quickly grasped that the acceptance of the treaty meant more money for them reduced the conflict and the discussions to an absolute minimum. Other details were minor. For us ratification could in certain circumstances cost us dear. Ratification of the treaty is not the end of the story. Times are changing in Europe and will go on changing, and single-minded diplomacy on our part could still prevent unsuitable developments.

For example, the so-called deepening of the Union should not be allowed to get out of control. Widening is just as important to all members. The Union will not be healthy until it includes strong Scandinavian elements and ultimately some of the Eastern countries. I suggest that all this should be taken in a much more measured time. It is clear from speeches in Brussels and elsewhere that the disciples of the founding fathers, now so outdated in my view, will make a determined dash for their promised land before the full significance of what they ultimately intend is recognised by the people of member countries and future member countries.

Those who mocked at the British for missing the European train should be taking another look at this highly praised express. The Foreign Secretary believes that the attitude of the populations of existing members are coming nearer to our own. It certainly appears to be so even in some of the founding members. The French, for example, have made it absolutely clear that they will not tolerate proposals, in their own words, "unacceptable to their national interests", and others may be expected to do the same.

The noble Lord, Lord Cockfield, who is not in his place, presented a case that future British generations would be much more European minded than before. I expected that he was correct. But I had lunch today with the Vice-Chancellor at a provincial university of 6,000 students. I asked, "How many of your young people are European enthusiasts?" He said, "One in 50 at the most". That rather surprised me. What would he confidently say about the same significant number of German young people? Incidentally, I thought that the noble Lord, Lord Cockfield, in his description of British attitudes down the century, should have referred to 1939 and the 1940s when we took the lead in resisting development which could have changed out of all recognition the European scene which we are now considering. To my mind it is clearly desirable to take all the questions outstanding at a slower speed. In that way lasting and mutually beneficial solutions can best be reached.

But there are other dangers which it is appropriate to mention in this debate. I am glad that the noble Baroness, Lady Elles, has spoken of the UN. The Community countries have squandered a great deal of time and effort on their own affairs. During that time global problems of greater international importance have gradually and stealthily developed. First and foremost is the future of the United Nations. After the acclaimed end of the Cold War and victory in the Gulf War, there was talk of a new world order; the inference being that the United Nations would at last be able to add some authoritative military enforcement to its armoury of persuasive weapons.

Members of the House may by chance have heard the brilliant talk in the BBC World Service given by Sir Anthony Parsons a week or so ago. He pointed out where we are in fact now, not more than two years later. The painful facts are that the United Nations organisation is making itself ridiculous in the Balkans and incurring huge costs worldwide which it is difficult to see how they can be met. Are we so sure that the Cold War is in fact safely over? The future of a re-organised Soviet Union is by no means assured, nor have the problems of the GATT, immigration, Africa and international terrorism been solved. They all remain to be squarely faced.

Cannot the governments of the Community, including our own, turn their attention from the comparative unimportance of many of their bureaucratic objectives and federal ambitions and apply themselves to these larger and more important matters? I believe that we in this country have the ability and skill to play a big part in the resolution of those problems. I am sure that many of our neighbours in Europe would come to share our efforts.

7.28 p.m.

Baroness Seccombe

My Lords, there are many in your Lordships' House who are far better qualified than Ito speak with authority in this debate For that reason and for the need for brevity, I do not propose to speak for many minutes. But as I am a firm supporter of the Bill I thought it right to make a contribution.

Most of the great issues have been raised so I shall not be going into detail but will put forward a few general points. For over 20 years the UK has been a committed member of the EC. It may be that some of the initial enthusiasm has evaporated. But I believe that this has been brought about by too much concentration on the bad news and too little on the advantages that have accrued for this country.

Of course, it makes good copy for the media to expand on the infuriating interference of the bureaucracy in Brussels, and I agree with noble Lords that we should perhaps point the finger also at our own officials who can be over-zealous when they come to implement EC directives. I suppose that there is little news value in a trade barrier reduced, and how much Press attention was there when dozens of forms were replaced by a single transit document for trade between EC member countries? How important that is for us as Europe receives 57 per cent. of our exports, up from 30 per cent. 20 years ago.

I well remember the arguments that ensued at the time of the referendum in 1975. Having spent many hours campaigning on the doorstep for a "Yes" vote, I am convinced that one of the most telling points before the electorate was the vision of European nations working together for economic prosperity -and, perhaps even more importantly, for peace and stability. After all, most families suffered dreadfully, losing loved ones, as twice in this century millions were killed as Europe tore itself apart. At that time, I am sure that economic success was a prize to be worked for, but the thought of monetary union - and certainly political union -was just not on the agenda.

Time has moved on and the federalists are certainly not muted in propagating their proposal. That is why I believe that the UK must be at the heart of Europe, moulding and influencing the EC and the way in which we wish to see it develop. For me, that is certainly not down the federalist route.

I welcome the Maastricht Treaty as the right step if we are to have the key principles of our new approach —subsidiarity and inter-governmentalism—built into the very fabric of the Community. The question of subsidiarity is especially vital and the consequent return of powers to member nations will lead to a far less centralised Community where individual nations can make their own decisions.

The Prime Minister secured significant opt-outs for this country which will release us from the straitjacket and give us vital benefits. I am sure that many of us share a view that there must be much greater accountability and increased scrutiny of the massive spending programmes. The Maastricht Treaty will help to bring that about.

I believe that this is a significant time in the history of the Community and I hope that this House will give the Bill enthusiastic support. If so, we shall see the enlargement of the EC, and I hope the entry of those emerging democracies in Eastern Europe in the not too far distant future.

7.32 p.m.

Lord Barnett

My Lords, I want to deal briefly with the central issue of the economic and political matters raised in the treaty, and to refer to an article which the noble Lord, Lord Rees-Mogg, wrote recently in The Times. I told him that I shall refer to it because I agree with so much of it. I also told him that the only parts with which I did not agree were his conclusions. It is well worth quoting because it seems to me that it gets right to the heart of the problem. He said: The political danger is … [that] Maastricht transfers responsibility for economic policy from the elected parliaments of Europe to non-elected institutions. Yet democracy is the safety valve of popular discontent. Of course, he is quite right. It is the safety valve of popular discontent and that is why it would not happen. However, the noble Lord had preceded that by arguing at length that: As a result of the recession all but one of the countries of the Community are now outside the economic convergence rules of the Maastricht treaty. Either their current or cumulative deficit is too large, or both. The only country that meets the standard is Luxembourg. For the l I to have to converge on Luxembourg seems preposterous". I could not agree more. It is and would be preposterous if the other 11 were to be so foolish as to converge on one small country within the Community. But he went on to say: all countries will be required to reduce their deficits to the specified levels. That means that 11 of the 12 will be required to deflate their economies, although it is the recession itself which has caused their deficits to rise to the present alarming level. A general European deflation, starting in 1994, would be a disaster for the European economy, and a social and political disaster as well'. Again, he is right. But of course it will not happen. This is where it seems to me—I know that they do not like the word "Eurosceptics"—the anti-Maastricht Members of your Lordships' House have a central error in their arguments. They believe that all 12 members of the European Community are bigger idiots than we might give them credit for. I suppose it is understandable that some of them might have that idea from what has been happening not so far distant from us recently. The 12 member states will not be so stupid as to carry out policies that will be economically and politically disastrous for them. That assumes that they are all idiots, and I do not believe that for a minute.

The noble Lord, Lord Carrington, put it very well yesterday when he talked about the common agricultural policy. The same applies to other issues. Ministers have the powers, if they care to use them, to block the more idiotic proposals that might come from Commission officials. I hope that they will use those powers. That is vital. In any event, the convergence criteria for a single currency will not be met at the outset of our membership, or, indeed, for long afterwards. I doubt whether even the core four or five members is likely to meet the criteria needed for a single currency. I am not at all sure that Germany, given its current economic problems, will do so.

The noble Lords, Lord Parkinson and Lord Moran, in excellent speeches yesterday said that one should not vote for the treaty merely because it will not happen. They are right if that was the only reason one was voting for the treaty. It is not the only reason why I shall be voting for the treaty. If I am wrong and there is in the not too distant future a real and lasting economic convergence within the 12 member states, that would be only to the benefit of all member states. Why should we complain about that? If that were to happen on a lasting scale, it must be equally beneficial for there to be a single currency or it would not make any sense. But, as I say, I do not believe that it is likely to happen in the foreseeable future.

My noble friend Lord Callaghan, in an excellent speech, pointed up the graphic difficulties of our having decimalisation. If that was difficult, it will not be that easy to obtain a single currency, even if there is economic convergence in the near future in all 12 member states, let alone if there is a larger Community, which I should like to see.

If we want democracy to be supreme, which I do, there is another factor that I wish to raise with your Lordships. I do not believe that one can have an unelected, unaccountable central bank. That would be unacceptable to me, although I hasten to add that in practice, for the same reasons that Ministers would not allow the disasters of a rigid convergence rule, I doubt whether they would allow that either. I should not. The trouble is that there are many —not just in your Lordships' House, but elsewhere, and certainly in another place—who believe that the idea of a central bank, given such powers, is all right, because it deals only with monetary policy which is technical and different, because they do not understand it. It has a simple objective, certainly, of bringing down and maintaining low inflation, but setting interest rates, which is the main instrument of a central bank, has a wider effect than merely on inflation. It has a major impact upon jobs and living standards. To give those powers to a unaccountable, independent central bank is wrong, and I should not accept that. I hope that your Lordships will accept an amendment along those lines.

Let me make it quite clear that in practice and for the same reasons that the noble Lord. Lord Rees-Mogg, stated in his article—namely, that democracy is the safety valve of popular discontent —I do not believe that Ministers here or elsewhere would allow such independence on the part of a so-called "European central bank" any more than a British Government, certainly the Treasury, would have allowed the Bank of England to have had such powers. I am delighted to see the noble Lord, Lord Hunt, nodding in agreement.

Perhaps I may sum up, because it is better to be brief at this time of night. I support the Maastricht Treaty with one or two comparatively minor reservations. I do so primarily because I believe and always have that there should be greater economic and political co-operation within Europe. The noble Lord, Lord Beloff, in a very amusing speech yesterday—I am sorry that he is not in his place at the moment—spoke, I assume, for many who are anti-Maastricht and for some who are anti-Community when he referred to the single European state and what France and Germany wanted. He was meaning of course a superstate. But he threw the argument away in almost the same breath when he said that in France protectionism will always prevail.

What, my Lords, in a superstate? That was his argument and not mine. Of course they would not, any more than they would agree or we would need to agree with issues and political and economic decisions which would be against the best interests of member states. It is in our best interests that we should have greater co-operation within the twelve member states and not, as the opponents of the treaty would have it, that there should be what they call a superstate or their interpretation of a federal union. It will be a European Community with greater subsidiarity.

Those of us who are in favour of the treaty are often accused of not having read it. Well, I must confess that I have. The new Chancellor's officials might take up the point made by my noble friend Lord Bruce about what officials put in Ministers' boxes. They would certainly have put in the Chancellor's box and marked in red, green or whatever the parts of the treaty which show that subsidiarity does appear under the Maastricht Treaty. Indeed, it is referred to right at the outset in Article A paragraph 2 and again later in Article 3.b. So it can be seen that these decisions should be taken, as is stated in Article A, as closely as possible to the citizen". Other parts of the treaty are often quoted as laying down more specific issues which are contrary to that generalisation. But as the noble Lord, Lord Carrington, said yesterday, Ministers can and will block any such nonsensical decisions in their own best interests because that is the best way in which the treaty can play a role in shaping the future. That is our best way of shaping the future from inside. We certainly will not be able to do so from outside. The idea that if we were outside, the other eleven would simply carry on outside a treaty and let it collapse is even greater nonsense. Of course they would not; they would have another Maastricht Treaty and would carry on dealing with it. We would be outside all that instead of helping to create the better, firmer and more political, democratic and economic Community in our own and everyone's best interests.

7.45 p.m.

Lord Vinson

My Lords, I share with many previous speakers deep apprehension over the Maastricht Treaty in general. However, I should like to deal specifically with the subject of its democratic inadequacy and the implications which I believe its ratification will have on the long-term political and social stability of our country.

The preamble to the Maastricht Treaty, in its amendments to the existing Treaty of Rome, significantly reiterates that: The term 'European Economic Community' shall be replaced by the term 'European Community' and that signatories to the Act shall be resolved to achieve the strengthening and convergence of their economies by monetary union". This clause finally moves us from a common market to a federal state.

I quote that because I am not as sanguine as the noble Lord, Lord Barnett, that the opt-outs and subsidiarity will protect us from what I believe is the ultimate folly: total monetary union.

However, as other noble Lords have pointed out, it is a treaty with a flawed democratic representational base. I believe that it is so flawed that in the long run the treaty is unlikely to work and cannot work. We in this country so easily take for granted our existing political and social system and the cohesion which that brings to our society. We imagine that the peace and quiet which generally reigns over our democratic affairs will automatically continue.

Indeed, ours may be the least worst political system, for the average citizen does at least feel that he can and does, to some extent, control his own destiny through the ballot box and that through his MP he has a legitimate, well recognised and well used channel to air complaints and to right wrongs. I would go so far as to argue that MPs' weekend surgeries are one of the most important political safety valves in our democracy.

It is that which leads me to be deeply anxious about the inherent democratic deficit of the Maastricht arrangements. Our existing system just works but, at the extremities, barely so. I am not a Scot but I can understand the feelings of the Scots as regards their lack of power and influence at Westminster even though they have more MPs per head of constituent than anywhere else in the Kingdom. For all that, many feel that Westminster is not responsive to their needs and calls for greater independence remain constant and persistent.

This should give us a warning signal when looking to the future because the Maastricht Treaty—it is indeed a treaty too far—finally shifts economic power effectively from Westminster to Brussels. What is more, it shifts power into the hands of an unelected and, to a large degree, unresponsive bureaucracy. There lies the potential danger.

In our democracy we have one MP to approximately 67,000 constituents and that just gives us a workable system while power remains at Westminster. Currently to most people the Euro elections are of no significance and few even know the name of their Euro MP.

But Maastricht will ultimately bring a fundamental shift of sovereignty to Strasbourg. The full significance of the fact that Euro MPs represent constituencies of over half a million people—constituencies seven times as large as those of their Westminster colleagues—will become apparent and will matter. In such huge constituencies electors have little opportunity to meet their MP and to use him as a democratic safety valve. It will soon dawn that Euro MPs belong to a Parliament where, inherently, they and their colleagues are in a permanent minority and where they have even less influence over those holding directly the reins of power and thus, precious little ability to change decisions. I believe that that will stretch our democratic system to the point of snapping.

To get a matter corrected through one's Westminster MP is bad enough but, increasingly, it will be almost impossible. There lie the seeds of European political self-destruction. It was Marx who said that if you want to destroy a society, you should start by undermining confidence in its institutions. The democratic inadequacy of the Maastricht Treaty will bring enormous strains to our political system as the full effect of the loss of our national right to control our economy and taxation levels becomes apparent.

Your Lordships will need no reminding of the American War of Independence which triggered on the slogan, "No taxation without representation". When fully implemented, Maastricht will effectively induce that condition and with it a sense of helplessness and powerlessness on the part of the average citizen. Frustration will blow the lid off the kettle and the treaty itself, far from uniting Europe, may put sensible European unification at risk. Political frustration could blow the high hopes of European stability apart.

The tragedy is that Maastricht is not actually necessary. There are no persuasive economic arguments to impose monetary union on a Europe which is still divided economically, socially and politically but beginning to cohere slowly but naturally through free trade under the Treaty of Rome. It could perfectly well continue to do so without the Maastricht Treaty.

So, in essence, I believe that Maastricht is a triumph of misplaced vision over reality. It puts in jeopardy the frail democratic system that has served us so well. What is more, I believe it to be fundamentally against the instinctive wishes of many of the British people, and I happen to think that "trust the people" is no bad principle to which we should return.

At the last referendum they voted for a Common Market not a federal state. It is for those reasons that I join with others in thinking that this country needs a referendum that fully spells out the federalist implications of Maastricht and which allows each citizen to make a personal choice before his country commits itself, arguably, to the greatest constitutional change in recent history.

7.51 p.m.

Lord Mayhew

My Lords, those who follow the debate will, I think, be interested in the following quotation from the current issue of The House Magazine (page 14 of Volume 18) which predicts the way that the Bill will pass through this Chamber. It says that, the chances are that the Maastricht Bill—however discredited—will be whipped towards ratification amidst a farrago of deceit and delusion—not least self-deceit and delusion among ministers". I draw the attention of Ministers on the Front Bench in particular to the latter. The House will not be surprised to know that the author of those words is the noble Lord, Lord Tebbit, who I am glad to see is now in his place.

However, supporters of Maastricht in this place are not being "whipped towards ratification". Indeed, in this House we do not, as a rule, pay much attention to the Whips on major issues. I venture to think that the overwhelming majority of supporters of Maastricht in this Chamber support the treaty from personal conviction—some of us from deep, personal conviction extending 20, 30 or even more years ago. As for deceit, I have listened to many speeches from both sides of the House and I have not heard anything approaching deceit. Ministers, as we know, by the very nature of their jobs, often read speeches which contain less evidence of personal conviction than those of Back-Benchers. But we have not heard in the debate any suggestion of deceit from Ministers.

The interest of the quote from the article is that it illustrates the quite extraordinary depth and bitterness of the division inside the Conservative Party on the issue. It explains the failure of the Government to show any sense of direction or determination, let alone inspiration, in their approach to the European Community. Those facts have been spelt out by, perhaps, 10 or 20 preceding speakers and I shall not attempt to repeat them. Indeed, I can assure the House that my own "farrago of deceit and delusion" will be extremely short.

I just wish to try to assure Euro-sceptics, such as the noble Lord, Lord Tebbit, that their fears are exaggerated. It was the same over the great battles in relation to our membership of the Common Market. I remember 20 or 30 years ago trying to persuade the Euro-sceptics of that time that membership of the Common Market would not spell financial and economic ruin or mass unemployment, and that it was not incompatible with a constitutional monarchy, and so on. I do not know whether our persuasion was successful, perhaps it was because of the referendum that followed; but the fact is that the great majority of the Euro-sceptics of that day were taught—presumably by experience—that their fears were vastly exaggerated. It will be the same with Maastricht.

I was particularly interested in the delightful speech of the noble Lord, Lord Bruce, who set out with great persuasiveness and humour to show that it did not matter whether or not we passed Maastricht. He said that everything would be the same. In which case one asks the reason for his bitter opposition. He cannot have it both ways.

For myself, Maastricht is not a bold step forward towards federation but a messy, confused compromise. It reflects the very different and conflicting interests and sentiments of the countries concerned.

The trouble with the Euro-sceptics, both in the old days and today, is not that they win the argument; it is that they cause delay. In the case of membership of the market that delay was disastrous. How much we would have saved if Britain had been at Messina, as recommended by the Liberal Party at that time, alone among the political parties. How much we would have saved if we had been at Messina instead of staying away and letting the French and Germans rig up the common agricultural policy to suit themselves in our absence. Delay was the crime and the disadvantage of the Euro-sceptics then, as it is to some extent now.

I describe myself, and have done for many years, as a go-slow federalist. There are others like me. We believe that the day of the nation state in Europe is going and that that should be the case. However, in many European countries, not least in Britain, public opinion does not yet agree and must not and cannot be overridden. Surely we are right to set ourselves that long-term objective. It gives a sense of purpose and direction and it keeps things moving.

The objective must be a constitution for the European Community which caters effectively for its members' ever-increasing interdependence in defence, security, trade, finance, the environment, communications and so on. Such is the interdependence that such a constitution must in the end be federal in nature. The go-slow federalists insist absolutely that we have to carry the peoples of Europe with us. There are federalists, especially on the continent, who have failed to do that. They have let a good idea become a dogma and then a dogma become an obsession until they have lost touch with reality in some way, but also, above all, with public opinion. In that way they have done a disservice to the European ideal.

A year ago a referendum would have been highly appropriate, and a year ago I supported the concept. I agreed with the general case for a referendum made by the noble Baroness, Lady Thatcher, yesterday. I look forward at the next general election campaign to her arguing the need for a referendum on electoral reform. Who can say that that is not a constitutional issue? Who can argue against the basic democratic principle that it is the electors and not the politicians who should decide how the politicians are elected? We shall argue that when the election comes. I am sure that we shall have allies among noble Lords in the Opposition party.

A great deal of time has passed on the question of Maastricht and the other place has decided against a referendum. The rest of the Community is waiting impatiently—and how we understand that—for a decision from this country. Moreover, the unpopularity of the Government has reached unprecedented depths—so much so that the Euro-sceptics might quite distort the results of a referendum with a shrewd slogan such as, "A vote for Maastricht is a vote for Major". That is a relevant factor when we consider whether a referendum would accurately reflect the true feelings of the British people about Maastricht.

We have had enough time on the issue already. It is high time now to make a decision. Then let the British Government stand up to the opposition within their ranks and give a positive lead in Europe.

8 p.m.

Lord Thomas of Swynnerton

My Lords, we can all think of reasons why some British should have felt hesitant over many years about the European Community. For 400 years it was, after all, the main thrust of British foreign policy to try to prevent the unity of Europe. It was an extremely successfully pursued policy. The Treaty of Rome, as with its revisions, including the Treaty of Maastricht, provides for this country what we have never had before: something approaching a written constitution.

As we all well know, this country experienced a wonderful Second World War in which our national pride was greatly enhanced, unlike the national pride of our Continental neighbours. When the tug of imperial power and interest declined, we had the alternative tug of the United States. Politically, culturally and intellectually—in terms of mass culture and elite culture—it has played a dominant part in our lives during the past generation. What university has not received philanthropic assistance from across the Atlantic? Films and television have catered for mass culture.

Therefore it is not surprising that Britain was hesitant about joining the European Coal and Steel Community, was slow in applying to join the Economic Community and was not anxious to commit itself to the European Community until 1975 when nearly a third of the population voted against the Community. It is not surprising that, 20 years after we joined the Community, there still remain residual feelings of resentment and hostility.

All the same, it must be realised—as we do—that the idea of an island economy and an island polity are also in contrast with our national traditions. Indeed, we have not experienced such insularity for 400 or 500 years. It would be quite out of our national tradition to seek tc return to that insularity. We therefore have had the European experience. It has transformed this country after the decline of the imperial experience and after it became clear that neither imperial preference nor the United States economic or political alternatives would lead to anything.

The question of imperial preference incidentally was very interestingly touched upon by my noble friend Lord Amery, whom I congratulate warmly on his maiden speech. I am sure that his future contributions will be equally historically interesting and to the point.

It is not always remembered that, at the same time as the formation of the European movement, to which again my noble friend Lord Amery referred, over several generations in this country we have had a substantial federal movement which at one time or another has attracted the support of many people in public life, including several of those who have taken part in this debate.

The fact that men as diverse as Mr. Sam Watson, the president of the Durham miners, and Lord Robbins should have been drawn towards the federal movement is an indication of its attraction. The support of Lord Robbins, and at one stage Professor Hayek, is a reminder that it is perfectly possible to be an economic liberal, such as I regard myself, and an enthusiast for the European cause.

For all those reasons, the European movement led to the successes which Britain has achieved within Europe since she first applied to join in 1961. However, it is worth while reminding ourselves that even enthusiasts for Europe, among officials and politicians, never quite appreciated the profundity and depth of the drive towards unity among our continental neighbours and friends, who from the beginning never envisaged anything other than a complete break with inter-governmental collaboration. The European Coal and Steel Community, like the European Economic Community in its first stages, never thought of itself as an alliance of nation states or as an alliance at all. It was something quite different and more profound.

It is perfectly true that, as the noble Lord, Lord Ezra, reminded us in one of the many interesting historical contributions to the debate yesterday, we could have had a chance in 1955 of starting to negotiate a new type of European Community "without preconceptions", had we gone to the Messina conference. The noble Lord, Lord Sherfield, reminded us that we had a British representative there, but he told us that the representative was withdrawn —he could not quite remember why. At all events, since 1955 we have not had the option of a Europe of nation states, at least in my submission. A failure to realise that has been one of the reasons for distrust, fear or accusations of conspiracy which have characterised some aspects of the debate.

My noble friend Lord Thorneycroft, in another marvellously interesting historical contribution yesterday, made one point which I thought was a trifle unfair. He said that had we been present at Messina, we might have had a less provincial and bureaucratic Europe than we have. I do not believe that that is quite the appropriate way to describe the way in which M. Monnet approached his idea to achieve the unity of Europe. Monnet's thinking still characterises most European Community documents and what he thought was that, given the pride of old nation states, it was impossible, even in the 1950s, to persuade them to sit down at a conference table and sign away their sovereignty. It was necessary to get them to start in small ways, by harmonising and continuing to harmonise. In the end, the Europeans would wake up to find that they had been united without fully realising what had happened. That was the approach of M. Monnet and the European Community. To some extent it is the approach of the Community even now. Perhaps I may return to that point in just a moment.

I turn to the question of the treaty. We have analysed this document as carefully as any legislature can he expected to do. There is one phrase in it which has perhaps not received as much attention as it might have done. I quote it because it links with what I said previously. It is the inclusion in the preamble to the treaty (the aims) and also in Article A of Title I—and this allusion will prove, I hope, to the noble Lord, Lord Bruce of Donington, that I have looked at the treaty—of the phrase "ever closer union". We know the background to why that phrase was used. It was used because Her Majesty's Government, in their wisdom, wished to avoid the expression of a federal purpose.

At first sight the mention of "ever closer union" is simply a repetition of three words which have occurred in other documents. I cannot denounce its use since I even wrote a book with that title. Nevertheless, I submit that what we very particularly do not want now is the pursuit of ever closer union. What we want is a clear definition of where the competence of the nation state and of the Community lie. That point was well touched on by my noble friend Lord Alexander of Weedon yesterday when he spoke of the need to achieve, the firm constitutional underpinnings of the rights of nations". Noble Lords may argue that this matter is effectively touched on in the treaty by the provision of the two pillars which are to remain inter-governmentally managed; namely, the pillar dealing with security and foreign policy on the one hand and the one dealing with home and judicial affairs on the other. That is a very ingenious picture. We know that the combination of the pillars and the Community make the Union. The whole thing is an ingenious and attractive plan. Yet a metaphor is always an indication; and when one thinks of it, the metaphor of a pillar standing by itself is a little disturbing. A pillar without an edifice is as a rule either a ruin or the beginning of something else. We must think of it as the beginning of something else.

What will that "something else" be? I believe it is essential that in the next stage of the European Community —and, as critics of the treaty have pointed out incessantly, the Maastricht Treaty is only a stage in a process—there must be full discussions on the constitutional nature of the Community, its relation to the states and with its own institutions, so that the friends of the Community will be able to avoid the accusation that "ever closer union" is likely to make for harmonisation of practically everything under the sun; that there is likely to be no end to the process; and that the diversity of nations and regions will completely disappear.

I therefore argue for what my noble friend Lord Carrington would call a concept—I think that is perfectly correct—but it is a concept which would meet one of his other requests when he said that when he was travelling he wanted to know his destination. Perhaps the introduction of this "concept" would be one which would at least satisfy him, if not other noble Lords who are dissatisfied with the general development of the Community.

8.15 p.m.

Lord Ponsonby of Shulbrede

My Lords, it is with some diffidence that I rise to speak. There have been so many illustrious speakers in the history of British politics both past and present. For me one of the most influential speeches in the debate was that of the noble Viscount, Lord Whitelaw. It touched me when he spoke of how his experience through two world wars had led him to what he considered an inevitable conviction of the soundness of a greater European union.

When preparing for this debate I asked myself what on earth I had to contribute that was new. So many noble Lords have made so many speeches which have addressed so many of the issues. I believe that the answer to my question was that I could offer a perspective. Not only have I grown up in a Europe that has been at peace throughout the whole of my life —I have only ever known a Europe at peace—but throughout my adult life and for a substantial part of my childhood the United Kingdom has been a member of the European Community. I have only ever known the European Community as a reality in the political system in which we operate. It is from that perspective that I seek to address your Lordships tonight.

It is often the case that legislation becomes characterised by certain key issues. From the speeches that we have heard today and yesterday, it strikes me that three key issues are those of the referendum, the social chapter and the issue of sovereignty. Those are the issues to which many speakers have returned time and again.

Perhaps I may briefly touch on the issue of the referendum. I cannot in all honesty say that I feel that it is an issue that has any life in it in political reality at all. I regard that issue as completely dead in the water. The noble Lord, Lord Richard, summed up the political reality when he said that the other place voted with a very great majority against a referendum. The Bill was in the other place for a long time and was considered very tortuously and carefully. For this unelected second Chamber to try to suggest an alternative method of dealing with the Maastricht Bill is not a political reality. I might just say, as an aside, that although I have not been in the Chamber for the whole of the debate, I have yet to hear a speech by any noble Lord in favour of both the Maastricht Treaty and a referendum.

The second issue to which I turn is the social chapter. That illustrates the great political divide between the two Front Benches. I for one am very glad that there is a substantial amount of unanimity on the other issues and on the substantive issue of the Bill itself. My noble friend Lord Monkswell reminded the House of many of the objectives of the social chapter, and it is worth reminding ourselves that it is the Government's assertion that our adherence to the social chapter will affect jobs in Britain. I must say that with 3 million unemployed in Britain and with legislation to abolish the wages councils just passing through our Parliament, the claim that the social chapter will affect jobs in Britain rings very hollow, especially to the unemployed and the most deprived people in our country.

Much has been written recently about the accidental devaluation of the pound. But in the case of the social chapter I would contend that we have the deliberate devaluation of our workforce. Why cannot the Government see that we need proper social protection and proper employment law, and that that must go hand in hand with the highly trained and motivated workforce which we all want to see? We cannot have one without the other. We need to have proper legislation in place which respects the workforce if we hope to get the best out of the workers.

Perhaps I may cheekily point out that it is the Conservative Party which is the only party in western Europe that is against the social chapter, bar one—that is, M. Le Pen's fascists in France. I am sure that the party opposite feel extremely uncomfortable with that fellow traveller.

It has been widely commented that if Britain failed to implement the social chapter, its provisions may be applied through the European courts in a piecemeal manner by individuals, trade unions, other European governments or companies going through the European courts. That is the worst option possible for Britain.

I must say that many noble Lords who have spoken against the Maastricht Treaty have told us what great Europeans they are, and brandished their European credentials. In the context of the social chapter, I should like to claim to being a Little Englander. Like others I love warm beer and, indeed, still have faith in Graham Gooch as the England cricket captain!

It would be so much better if we had a government which wholeheartedly joined in the process of formulating and developing our European social and employment law, so that it encompasses Britain's specific interests and circumstances. I want a government that is batting for Britain and trying to make laws that suit the British circumstances.

Perhaps I may turn to the issue which has been mentioned time and again in the debate—that of sovereignty and citizenship. The arguments in favour of Maastricht are quite succinct, and I can quickly advance them. Through the treaty we will achieve a pooled influence over the matters which affect us, which will be greater than the illusion of sovereignty which we now have. The argument goes on to say that the whole is greater than the sum of the parts; that that pooled sovereignty is of great consequence and a great prize.

But I believe that there is more to the argument than that. I believe that it is more than an issue of pragmatism. Questions of sentiment, loyalty and indeed patriotism are also important. Those are not words that people of my generation commonly use, but they are words which we understand. Those issues have been referred to time and again and obviously go to the heart of most people's objections to the treaty. But I return to my opening comment when I said that I speak from the perspective of someone who has known the EC throughout my entire adult life; I have no emotional understanding at all of those arguments.

Many noble Lords mentioned the point, but perhaps most notably the noble and learned Lord the Lord Chancellor, who said, "I am a Scot who is proud to be British, and a Briton who is proud to be European". I would change the emphasis of that. I would say that I do not feel less English because I am British; and I do not feel less British because I am a European. It is perhaps that change of emphasis that is captured by the complete comfort of being aware of the European institutions that affect our country.

I have touched on the political divide between the two main political parties. The Bill is an imperfect one. Nevertheless, it is the only Bill before us. I believe for that reason it ought to be given a fair wind by your Lordships' House.

8.25 p.m.

Lord Bethell

My Lords, I venture to think that if Sherlock Holmes were present during this evening's debate he might remark to his friend about the curious fact of the frequency of references to the European Parliament in Brussels and Strasbourg. If his friend had said to him that references to the European Parliament had been extremely infrequent Sherlock Holmes might have said, "My dear Watson, that is the curious fact".

Today and yesterday we have heard a great number of references, particularly from Euro-sceptics, to the powers of the EC Commission. It was referred to by my noble friend Lady Thatcher as an unelected body in terms of some negative emotion. It was also referred to by my noble friend Lord Donoughmore, in his excellent maiden speech, as being out of control. The noble Lord, Lord Bruce, quite rightly drew attention to the way that civil servants in Brussels, as in London, had a tendency whenever they could to bamboozle Members of Parliament with detail and science and rule the roost if given half a chance. But I am surprised that the conclusion has not yet been drawn that the way to tackle the supremacy of the Brussels civil service is through a parliament elected by the people of Europe who have power to control and supervise them, as is laid down in the treaty. If it is said, as my noble friend Lord Vinson said a few moments ago, that the present European Parliament does not do the job terribly well—a matter that is subject to debate about which no doubt my noble friends Lord Plumb and Lord Inglewood will have something to say a little later—I suggest the answer is that the European Parliament should be reformed, improved and brought up to date, and that if it did not exist someone would have to invent it; otherwise, we would be landed with a democratic deficit for which there was no cure.

I should like to remind your Lordships about the way in which draft European legislation is made. It is initiated by the Commission and civil servants. I do not know whether Maastricht will give the power of initiation to MEPs if it comes into force. That is not yet decided. Drafts are then examined by different and separate routes: first, by the permanent representatives of the member states in Brussels, and later by national civil servants. Finally, they are examined by Ministers of the Twelve. Simultaneously and in parallel, they are examined by committees of the European Parliament and in plenary session. Both bodies construct and debate their conclusions with the Commission. But I cannot say that it works terribly well because of the overriding power and influence that the Commission has along both routes to the formation of legislation.

The problems are many. Much of the negotiation is done in secret. It is not possible for any outsider to be present at the debates in COREPER or among the civil servants—still less in the Council of Ministers. In the European Parliament most of the discussions are held in public, but it has a secondary role of influence when it comes to the point. Whilst it is possible for the scrutiny committees of your Lordships' House or another place to have a serious influence on draft legislation if they can get their act together on this point, so often the conclusion of a report by British parliamentarians, or any other scrutiny committee in the Community for that matter, comes too late to have any real political effect. The matter is all wrapped up and presented to the Ministers by the time the Members of the House of Commons have got to grips with their own Minister and said to him, "Please do not do this. We have taken evidence and you will be committing a very serious political mistake". There does not seem to be the time, the inclination or the ability to do it.

The only way to get round this problem is to give increased powers to the European Parliament in this respect and to give it the deciding voice, particularly in the passing of amendments at first reading. It should not be left to the Commission to accept or reject the advice of the European Parliament according to how it feels at that moment.

I am sad to say that there has been a very special British resistance to the development of the European Parliament, of which I have been a member since 1975. This overrides the general Euro-scepticism of a large part of the British people. There are those who are enthusiastic about Europe but who see little merit in a European Parliament. There may be Ministers who think like that and Departments of State which think like that. There are certainly many people in Whitehall who think like that—people who are in favour of the European Community and enthusiastic about it but see no role for the European Parliament. I wonder why that is.

Is it because of the special role of the House of Commons among European parliaments, with 600 years of history behind it, while other European national parliaments have only a few decades of experience? Is it that the British are unfamiliar with the system by which the European institutions control that narrow layer of public authority which has been transferred to them? Is it that they are unfamiliar with the system of the separation of powers whereby a Parliament is not sovereign and does not have the power of life and death over every draft, but has certain powers which it shares with other institutions and has certain powers over the budget which it shares with another institution? Such ideas are perfectly familiar to Americans, French people and many others. They are a little foreign to us here.

Is that why the British in particular treat the European Parliament with caution and why there seems to have been a locking of antlers between the Strasbourg Parliament and particularly another place in the Palace of Westminster? Is it only here—and perhaps in one or two other countries—that we have a provision such as laid down in Section 6 of the European Assembly Elections Act 1978 which demands that a special clause or paragraph be inserted in the Bill before your Lordships today before any change can be made to the European Parliament's powers? All the more reason, therefore, that we should discuss the matter this evening in some detail and not pass it by in a conspiracy of silence.

Why was it, I wonder, that Britain was the only country to enter a reservation over increased powers for the European Parliament when this matter was discussed by the Dooge Report some years ago? Why was it that the former Prime Minister, the noble Baroness, Lady Thatcher, in her extremely interesting speech in Bruges which covered the whole gamut of European policy, did not mention the Strasbourg Parliament once? I believe, therefore, that the Government should think about this matter and I give notice that I shall be putting down amendments which, if fully implemented, would have the effect of giving the European Parliament more powers under either this agreement or another agreement.

If the deficit is to be removed it is essential that the European Parliament's powers should be boosted. In particular I have in mind that the European Parliament should have the right to approve not only the Commission as a whole with its President but also individual Commissioners. It should have the right to recall each individual Commissioner if there is a complaint, and should have the power to dismiss him or her if that were to be necessary. The European Parliament should have the right to initiate legislation, and if there is a difference of opinion between the elected members and the civil servants in Brussels about an amendment the opinion of the Parliament should prevail.

I suggest that in no other democratic country or institution do the civil servants have the right to impose their will on the elected servants of the people. It is bizarre that in Brussels and Strasbourg that is the case. I do not believe that it can be tolerated for very much longer.

I agree with some of the things at least mentioned by the noble Lord, Lord Bruce of Donington, that the technicians are there to draft and not to take decisions. They are not there to blind us with their skill; they are there to help us to get a political balance right in Europe for the people of Britain. I hope that the Government will welcome that concept of an influential European Parliament as the only way of keeping day-to-day control over the Brussels Commission. The only way of monitoring and supervising what these often-criticised civil servants do must be through the European Parliament.

I hope that the Government will look at this idea in the same spirit as I do, and will welcome it as they would welcome and support democracy itself.

8.36 p.m.

Lord Eatwell

My Lords, I shall devote my remarks this evening to a consideration of the advantages for this country of the creation of a single currency in Europe. In doing so I am afraid that I shall confirm some of the worst fears of my noble friend Lord Bruce of Donington. He spoke of the pernicious influence of speech writers, and it was perhaps not an accident that he turned to me at that time. Having penned a few speeches in my time, I can tell my noble friend that it is my experience that politicians choose the speech writers who write the words that the politicians want to say. That at least is what happens in the Labour Party.

Since the creation of a single currency is perhaps the most fundamentally new aspect of the Maastricht Treaty, it is a little surprising that this question has not received extensive consideration in this debate. The only consistent comment has been that if there is to be a single currency in Europe, it will occur only in many, many years time and we do not therefore need to worry about it.

I find that approach profoundly unsatisfactory, first, because if we are signing up to a treaty we should do so in good faith, having the intention to do what we say we shall do; and, secondly, because I believe that monetary union, at least among Germany, France and the Benelux countries, may come a lot sooner than many think. On both those grounds the case for a single currency deserves consideration in its own right. And, of course, the alternative should be considered, too.

For a proper examination of the impact of different foreign exchange regimes we must look back a little. In the 25 years following World War II international trade was conducted through a system of fixed exchange rates established under the Bretton Woods agreement. Those fixed exchange rates were buttressed by strict controls on capital movements. In that period the OECD economies enjoyed the highest rate of growth which most of them have enjoyed in their entire economic history.

This country in particular grew faster than ever before; faster than it had done even during the Industrial Revolution. There was full employment combined with rates of inflation which averaged between 2½ per cent. and 4 per cent. The collapse of Bretton Woods in 1971–73 heralded the end of that golden age of full employment, low inflation and high growth. Since 1973 no major OECD country has managed to recapture it. In Europe we have experienced stagnation and growing unemployment.

I agree with my noble friend Lady Blackstone that the source of this great general stagnation is to be found in the financial instability and uncertainty which accompanied the collapse of the fixed exchange rate system. Fluctuating exchange rates greatly enhanced the opportunity for speculative profit, and the magnitude of speculative flows increased massively after 1973. Today roughly 95 per cent. of all foreign exchange transactions are essentially speculative. In the face of the potential financial disorder which large-scale speculation can wreak on any economic policies, governments—some willingly, some unwillingly—adopted depressive, so-called "prudent" monetary and financial policies. Everywhere governments became terrified of fiscal expansion. Full employment was dropped as a policy goal.

The result was a contagious depression. Slow growth and growing unemployment became the norm throughout the OECD, punctuated only by occasional upturns—blips, as the noble Lord, Lord Lawson, taught us to know them.

The creation of a single currency in Europe provides us with the opportunity to eliminate the deflationary pressures of uncontrolled, and uncontrollable, foreign exchange markets. It provides the opportunity for reasserting effective policy management of the economy. It contains the potential for a return to a high growth, high employment Europe.

I am amazed that some of my colleagues who are so opposed to the creation of a single currency are in turn so keen to trust the future of this country to the vagaries of the foreign exchange market. For make no mistake about it: not proceeding to a single currency will not bring back the stable expansion of Bretton Woods. It will perpetuate the speculation-haunted stagnation of the 1970s and 1980s. Monetary union will do far more than simply remove the dead weight of currency speculation from the British economy. It will also provide a monetary framework in which co-ordinated fiscal expansion—co-ordinated between member states—has some hope of success.

Co-ordinated expansion in a regime of fluctuating exchange rates is a total non-starter. Since devaluation is a device for essentially stealing markets and jobs from other countries, it is not surprising that it is difficult to convince those countries of the virtues of co-operative efforts.

A further advantage of a single currency is, of course, that it would establish a monetary policy which was appropriate to the needs of the European economy as a whole—not, as has been the case in recent years, simply appropriate to the needs of Germany. As my noble friend Lady Blackstone put it so well, a single currency would liberate us from the Bundesbank.

The noble Lord, Lord Parkinson, in an eloquent maiden speech yesterday, explained with great clarity the damage which a monetary policy geared only to the needs of Germany has done to Europe as a whole. He was quite right. Unfortunately, he drew a false conclusion. He appeared to suggest that in a single market, with free capital movements, there could be independent monetary policies for each of the European states. That conclusion is wrong. The noble Lord may have been misled by what is happening at the moment.

In a period like the present in which exchange rates are gyrating fiercely, the daily prospect of capital gain and loss on the exchange markets overwhelms the forces which would tend to equalise rates of interest, and so gives the temporary appearance of monetary policy independence. But in this case the preservation of an independent monetary policy—the independence which was so hailed by the former Chancellor, Mr. Lamont, depends on the continued instability of exchange rates—hardly an environment conducive to long-term investment. And once the exchange rate is stabilised, then all monetary independence is lost. The idea of a stable economy pursuing its own national monetary policy in a world of free capital movements is a delusion, a dangerous delusion.

Those who would forswear the advantages which a single currency provides and argue for a fluctuating currency must answer this question: if we abandon the single currency exactly what sort of international regime do they believe would be appropriate to a national full employment policy? If they follow the logic of their arguments there can be only one answer—a siege economy, in which capital movements are tightly controlled and there are import controls too. In that environment there could be a truly national economic policy. I must confess to seeing some attractions in such a regime, but I believe that there is a better one—a single currency as the foundation of a growing Europe.

Of course the benefits which derive from a single currency are not without costs. In particular, there are the difficulties which arise because of the emergence of different levels of competitiveness in different regions of the Community. I do not underestimate those difficulties. They demand a powerful and effective regional policy to secure balanced growth throughout the Community. But I am sure that tackling those problems in the context of a steadily growing Europe will be easier than dealing with the problems of stagnation which fluctuating rates would impose.

My support for the creation of a single currency does not extend to support for the current constitution of the proposed European central bank. It is obvious that the bank must be independent of the authorities of any one nation state, but the treaty is flawed when it suggests that the central bank should be independent of the governments of the EC taken as a whole. That would make sense only if monetary policy were a purely technical problem, with no implications for any other branch of economic policy. That is a nonsense which I should have thought our bitter experiences in the 1980s had eradicated for ever.

An effective economic policy requires the co-ordination of monetary and fiscal policy. That is why the Labour Party has argued consistently for the strengthening of the role of ECOFIN as the political counterpart of the central bank. ECOFIN should not just be charged with the co-ordination of fiscal policy among the member states but with the co-ordination of fiscal and monetary policy throughout the Community. Will the Minister tell us what is the Government's current thinking on the relationship between the bank and ECOFIN and what principles will guide their proposals for the revision conference in 1996?

Nor does my support for a single currency extend to the procedure for achieving it outlined in the Maastricht Treaty. The idea of a fixed exchange rate system, the ERM, in a world of free capital movements, linked to a series of so-called convergence criteria defined purely in monetary terms, totally ignoring the real performance of the economy, is a nonsense, a recipe for persistent speculative crises and a recipe for enduring stagnation. It is not difficult to see why. The monetary convergence criteria demand that governments should take action which is totally unrelated to the real state of their economies. For example, in Britain just last summer a weak, rudderless government, faced with growing unemployment and a collapsing housing market, would have had to raise interest rates. The combination was truly incredible. Everyone knew it. It was a gift to the speculators who knew that the criteria of convergence clashed with reality and reality clashed with political resolve.

The path to monetary union as at present defined in the treaty will inevitably fail. The criteria of convergence derive from what is now an outdated and discredited monetarist doctrine. At the 1996 revision the member states should recognise that if there is to be a monetary union, then it should be achieved quickly. It is the only way that the job can be done. Many may regard the suggestion that it should be achieved quickly as overly ambitious, overly bold, even impossible. But I believe they are the same people who would have said in 1944, as many in your Lordships' House did, that the Bretton Woods agreement was too ambitious, too bold and would never work.

I am not convinced by the arguments which suggest that a single currency could be misused as a means of imposing a new deflationary gold standard on Europe. Any set of economic institutions can be misused. Just look at the mess that the current Government have made of economic policy over the past 14 years. I am convinced that a single currency would provide the opportunity for the return of expansionary, full employment policies in Europe. Without the single currency I believe that the return to full employment will be very much more difficult. Of course the goal of a single currency is ambitious. Of course it will require determination to make it a success. It will of course require political leadership. If the benefits of a single currency are to be enjoyed the political preparation should begin now. It is surely the task of political leaders to display the conviction and to explain to the people why changes are being made and what the costs and benefits may be.

The question that hangs over the implementation of this treaty is not the character of the treaty but simply whether the Prime Minister is up to the job. So far he seems to have taken fright at every lengthy speech by Mr. Cash, every declaration from the noble Baroness, Lady Thatcher, and every smile from the noble Lord, Lord Tebbit.

Creating a new European economy, escaping from the cloying grasp of recession, will require political vision and imagination of the calibre shown by the wartime coalition at Bretton Woods. The Bretton Woods agreement ceded a substantial portion of national economic sovereignty to an international body, the International Monetary Fund. It was commended to your Lordships' House by the late Lord Keynes with the following words with which I wish to close. Lord Keynes said: If indeed it is our purpose to draw back from international co-operation and to pursue an altogether different order of ideas, the sooner that this is made clear the better; but that, I believe, is the policy of only a small minority, and for my part I am convinced that we cannot on those terms remain a Great Power… If, on the other hand, such is not our purpose, let us clear our minds of excessive doubts and suspicions and go forward".—[Official Report, 23/5/44; col. 849.]

8.51 p.m.

Lord Dacre of Glanton

My Lords, in this debate it is those who are sceptical about the Treaty of Maastricht who have been most particular in citing its terms while those who have defended it have been more general. Rather than deny the truth of the explicit citations of the treaty or the consequences implicit in them, they assure us that the process towards ratification has gone too far to be checked, that we need not worry too much because after ratification its effect will be found to differ from its stated aims and that British pragmatism will replace the grand concepts of its originators. In other words, though our doubts cannot be refuted now, they will be dissolved then. The blank cheque which we are asked to sign now will not in fact be cashed.

I wish that I could believe that. Perhaps I am wrong to doubt it but the future is seldom predictable and true pragmatism seems to me to consist in not signing blank cheques at all. I also think that events sometimes have a momentum of their own and that this is also a factor to be considered.

It is surely undeniable that the purpose—the explicitly stated purpose—of the treaty is to complement the economic union already secured by the previous treaties and not working quite as was expected by the creation of a political authority which will not only be exerted in economic matters but which will limit the sovereignty and independence of the nation states subscribing to it and, moreover—for this too is spelt out—will do so irreversibly. This power, thus given effectively to bureaucrats, is surely more likely to acquire than to lose momentum.

The major continental governments, which have consistently pursued this objective, have clearly shown that this is their aim. Since they have devised the terms for their own purposes they can afford to do so. They are governments of what we may conveniently call Napoleonic Europe. In so far as the treaty alters their own present constitutions, they are not disconcerted, for their own institutions are, in any event, new and experimental. They are the creations of yesterday. They are mushrooms of a night's growth which can be changed tomorrow. They have emerged from the wars and revolutions of the last century, and, more recently, in this century, from defeat in war and foreign occupation. In accepting yet another change, they are not surrendering any valuable legacy or viable system inherited from the past. They are merely trying a new tack or, at most, in historical terms, seeking to rebuild the world before Waterloo.

For us, it is rather different. We are invited to surrender, or at least to put at risk, a continuous tradition and system of government which, for over 300 years, has evolved without revolution or defeat in war and which, whatever its occasional illogicalities and eccentricities, of which we in this House are very sensible, has served us well, secured our present liberties and has been and still is envied in the world. That is an inheritance not lightly to be put at risk.

Moreover, we are asked to take that step irreversibly by a Government who have only a temporary lease of authority, who do not allow a free vote in the immediate locus of their own authority—the other place—and who refuse to consult the ultimate depository of their power; namely, the British people.

I am well aware of the objections to a referendum. It is not a normal device in our system but it has been validated by use in various constitutional matters. This is surely a constitutional matter. Indeed, I venture to say quite simply that a referendum is a less serious deviation from our normal constitutional practice than the irreversible process which is intended to lead to the surrender of our national independence.

Of course, such a surrender is not really irreversible. That may be in the treaty, but facts are sometimes stronger than treaties. How many treaties of perpetual alliance have been rudely broken? There is always the undeniable ultimate resort of revolution; but I should prefer not to leave that as our only option.

However, I do not wish to argue only from a national, little England ground, for I believe that this process is unfavourable in the long run not only to Britain but also to Europe. I consider myself to be a European—a citizen of Europe—in the metaphorical and not legalistic sense. I would echo the voice of the great Swiss historian Jacob Burckhardt who, in 1848, wrote to a radical friend, eager to jump on the bandwagon of revolution: We may all perish, but at least I want to choose the cause for which I want to die, and that is the culture of Europe". The cultural achievements of Europe have been the great success story of the modern world but that success is not owed to European unity. In the past, many thinkers have preached and many statesmen have sought to achieve that unity—happily, in vain. I believe that the success of Europe has been due to the diversity, the pluralism and competition of its structure and the permanent availability of different models of government, organisation, education and commerce within what the truly cosmopolitan philosophers of the 18th century called "this great republic". Thanks to that diversity and that perpetual competition, Europe never sank to the stagnation of the great centralised empires of Rome or China.

For that reason, I do not wish to see the present pluralism of Europe replaced by the imposition of a unitary political system to which the EC is openly and explicitly tending and which will, I believe—even if it begins well—gradually drain away the vitalising spirit which has created our culture and animated our civilisation. If that were to happen, I would indeed take to the barricades, perhaps even to the bandwagon.

Let us not assume too easily that the peoples of Europe will submit permanently to that unelected elite, that irresponsible bureaucracy so eloquently described by the noble Lord, Lord Bruce of Donington. It is one of the ironies of history—which, indeed, is, in general, but a succession of ironies—that this project of a European government conceived in a period of cold war and consequent equilibrium among unitary states now comes to us to be ratified in a period when that equilibrium and many of those unitary states themselves have dissolved. The cold war over. The USSR is no more.

Let us look at some once established unitary states. Let us look, for example, at Yugoslavia—a federation held together for 70 years (as long as the USSR) by a clentralising government. Yugoslavia was more naturally united than the Europe around it. It was a country of one race and one language, the two Hitherto accepted criteria of nationality. But its cultural division, the deposit of its history, has proved stronger than its racial and linguistic unity and has torn it apart in a horrible civil war. Let us not presume Goo much on the forced unity of a Europe which is divided, not only by culture and history as in Yugoslavia, but also by race and language; or its permanent acceptance of a bureaucracy seeking, as all bureaucrats seek—it is the occupational disease of their profession—ever greater numbers and ever greater power. Let us not forget the slumbering flames which may yet erupt beneath their supposedly fire-proof complacency.

Since 1945, many of us have wished, like my noble friend Lord Whitelaw, for a closer union of European nations to prevent a recurrence of the inter-European wars which have been so disastrous in our time. What we wanted to see was an economic union based on liberalisation of trade, not an irresponsible introverted Protectionist system which is as far as we have got. We certainly did not want a political superstructure eroding and potentially extinguishing national identity and independence. We wanted what General de Gaulle called a Europe des patries, though we wanted it in a slightly different form from his French-dominated model. I believe that that should still be our aim. While the economic union is still so faulty, we should not enter hastily into a political union which at present is set on a course which ultimately is intended to undermine—and, I fear, will undermine—our national independence and prevent the realisation of our original, more limited and still desirable aims. I have echoed Jacob Burckhardt. I conclude by echoing the noble Lord, Lord Greenhill, with the words, "Go slow".

9.4 p.m.

Lord Kilmarnock

My Lords, I shall not attempt to adjudicate between the two distinguished historians that we have just heard. I am neither a Euro-fanatic nor a Euro-phobe. Along with the noble Lord, Lord Stewartby, I rather resent the application of the term "Euro-sceptic" to people, some of whom are really Euro-phobes.

There is a long tradition of scepticism, to which I like to think that I belong. Noble Lords will recall that the basis of classical scepticism was that although the truth is finally unknowable a balance of probabilities can be used for coming to decisions. Starting from that kind of scepticism I have to say that the parliamentary performance in another place on a Bill to approve a treaty whose main provisions are supported by all three of the main parties fills me with some puzzlement.

It is hardly surprising, therefore, that the president of the CBI, Sir Michael Angus, said in a recent speech at the Guildhall that the progress of the Maastricht Treaty through Parliament has been a sorry spectacle. If the quality of debate in your Lordships' House is continued through the Committee and subsequent stages that verdict will not apply here.

Although I am a connoisseur and almost an addict of the speeches made by the noble Lord, Lord Harris of High Cross, in your Lordships' House, because they are always studded with the most excellent bons mots and aphorisms, I could not help wondering where he got his CBI briefing. It certainly did not come my way. In the speech at the Guildhall to which I referred, Sir Michael Angus went on to say: The treaty has many defects, perhaps not surprising in an agreement stemming from a series of compromises between national interests. But we have it—warts and all. And the choice before us is to accept or reject it. Acceptance will strengthen the single market which is so important for us all. Rejection would move us to a position remote from the central decisions in Europe". He went on to reject robustly the idea that if we reject it we can simply revert to the status quo ante.

I quote from Sir Michael merely because only the intellectually naive can assume that the previous status quo can still exist as a point to which we could return. That will not be an option. That was a point made yesterday by the noble Lord, Lord Gilmour of Craigmillar.

I hasten to add that I have no brief for the CBI and no interest to declare. I simply thought it useful to inject that simple and clear-cut thought into the confused and steamy atmosphere of the parliamentary guerrilla warfare which has characterised the progress of the Bill so far. Roughly speaking, having tilted at the Brussels bureaucracy, expressed some hope for subsidiarity, and shaken a fist at the social chapter, the CBI seems to give two cheers for Maastricht. That should not be sniffed at in a House which constantly deplores the decline of manufacturing industry. The noble Lord, Lord Pearson of Rannoch, last night or in the early hours of this morning, referred darkly to some dissident industrialists who are going to write to us all, but I have not heard from them yet.

Leaving aside the question of a referendum, the most contentious area in parliamentary debate so far has been the social protocol. The fact of basic all-party support for the Bill and the treaty has driven parties and factions of parties into asserting their political machismo or their social conscience by supporting the social protocol or condemning it. The British opt-out was intended, correctly, to save us from a return to a corporatist and tripartite culture which the noble Baroness, Lady Thatcher, led us out of in her heyday. Everything indicates now that we must have a more adaptable and flexible labour market if we are significantly to reduce unemployment.

That is not a capitalist plot. It is worth reflecting that Spain, which has very high non-wage costs, now has an unemployment rate of more than 20 per cent., which perhaps explains why Senor Gonzalez has lost his overall majority. Therefore, while I support some social measures, such as maternity leave, I am in favour of preserving as much freedom in our labour market as possible.

At the same time we have to recognise that the opt-out obtained by the Prime Minister in that field is likely to be eroded by the facts of life because of the complications of trans-national companies and, as several noble Lords have said, the likelihood of legal challenge. Therefore, I am less sanguine about that than the noble Baroness, Lady O'Cathain.

Incidentally, it may come as a surprise to some noble Lords, as it did to me, that there is no requirement in the protocol for a minimum wage except in relation to equal pay for equal work by men and women. I mention that because it has often been stated that a minimum wage is an intolerable interference in the labour market which we must resist at all costs because of the threat to jobs. I agree with that. In its day the SDP was against a minimum wage. But I could not find the reference in the protocol. Perhaps the noble Baroness will confirm whether or not that is so. It is an important point. When I trawled through the protocol I could not find it.

As many noble Lords have pointed out, by far the most important provisions of the treaty deal with the move towards economic and monetary union. Everything else is a side show. The United Kingdom opt out—which boils down to a right to opt in through a vote in the British Parliament—is very important. I disagree with the noble Lord, Lord Healey, on that point, although I hope that he is not right about the quid pro quo which he implied with the Germans as a means of attaining it. It is by far the most important derogation secured by the Prime Minister. It means that we are not irrevocably locked into Stage 3. Indeed, by leaving the ERM we currently qualify on only three of the five convergence criteria. Yet most of the criteria are highly desirable in themselves. Although we score relatively well at present on our inflation rate, our long-term interest rates, and our public debt as a percentage of GDP, our budget deficit is appalling. It is worse than any other country except Italy and Greece. If our public finances deteriorate any further our public debt ratio will also rise towards the Greek, Italian and Belgian levels.

The advantage of the treaty is that if we are to keep our options open on Stage 3—that is obviously sensible—we shall at least have to shadow the criteria; and that can only be beneficial to our public finances. My noble friend Lord Bridges made that point yesterday when he referred to the importance of sticking to the convergence criteria. I prefer his views to those expressed by the noble Lord, Lord Eatwell. To move from a PSBR of 8 per cent. down to 3 per cent. or less can only be a move in the right direction. Any additional discipline or pressure to do so is to be welcomed.

On ERM no one in his right mind can be against greater European and global currency stability. We cannot pursue the policy of competitive devaluation indefinitely. Having gained a windfall advantage from it, we shall eventually come to accept the force of the arguments to rejoin the ERM or a more flexible "son of ERM" at the right rate, at the right time and after proper consultation with Germany and France so that they do not cold shoulder us again as they did over Black Wednesday.

I expressed my doubts on the value and feasibility of the social protocol opt-out. However, I believe that the Government have the best of both worlds over EMU. The Prime Minister and the Foreign Minister are entitled to take credit for that.

My next and final point is on trade. We cannot ignore the increasing integration of the French and German economies. French businessmen increasingly see their own country, together with the Benelux countries, as the core European market. Europe is rapidly becoming a single economic region in manufacturing, from which I am sure all those in this House who are concerned about manufacturing industry will not wish to see us excluded. I am afraid that I missed the speech of the noble Lord, Lord Aldington. In that context it is important to put into perspective the shock, horror, figure put forward by the noble Baroness, Lady Thatcher, of a £95 billion cost to the United Kingdom since we joined the Community. It was also referred to by my noble friend Lord Tonypandy. It is calculated on adding up net contributions to the Community budget and the adverse trade balance with the Community over 20 years. I am glad that some real economists will speak after me and will pick me up if I make mistakes. I am sure that the noble Lord, Lord Desai, will do so. However, I simply make the following points.

The visible balance is indeed negative, but becoming less so. It was particularly high at £15 billion in 1989. The lesson is that during a "loads o' money" boom we have a penchant for importing luxuries. That boom occurred under the Government of the noble Baroness, Lady Thatcher. The deficit on that account was down to £0.5 billion in 1991.

As to distribution of exports, only 11 per cent. of ours go to the United States, and 56 per cent. by volume to the Community. Our imports by volume from the Community are 52 per cent. The lesson that I deduce is that if the cash balance is adverse it means that we are exporting low value added goods and importing higher value added goods; and that has huge implications for skills and training.

The next point is that the figures of the noble Baroness, Lady Thatcher, do not include invisibles—that is financial services, insurance, dividends and so forth, which are rising, though I do not have a figure for the proportion that goes to the Community. The lesson here is surely that we must be at the top table to ensure a seriously free or common market in services, which is a long way off.

It is true that 60 per cent. of the EC budget goes on CAP, which is an alarming rise of 3 per cent. since 1992. The lesson here again is that it must be resisted relentlessly, which we can only do by being there.

When we add up all those lessons, the message that comes through to me is not: "Don't ratify" or "Take a step back" or "Stick to the status quo". Anyone who argues that has to explain where that 56 per cent. of our exports will relocate. The message is that we have to be in there at the front rank, the top table of member states, if we are to improve our terms of trade.

In deciding finally whether or not to support the Bill, I have been much influenced by the total lack of credible alternatives proposed by opponents from whatever quarter, as the noble Lord, Lord Armstrong of Ilminster, said yesterday. We are not told whether they want us to become the 51st state of the USA, or a kind of Hong Kong in the North Sea. The noble Lord, Lord Beloff, yesterday made ironic play of the terrible prospect of our being doomed to poverty like other offshore islands such as Singapore and Hong Kong. I suppose that glittering brand of poverty might he possible if we evacuated most of' the inhabitants of Hong Kong to this country. But I do not believe that that accords with any party's immigration policy.

The Prime Minister's rhetoric about being at the heart of Europe may not be fully capable of realisation. The heart is there on the land mass over which two world wars were fought. The heartbeat is bound to come from those devastating experiences. But it should be remembered that we too were uniquely there when the call to arms came. I maintain that we have not only a right but a duty to stick in there and make our voice heard effectively. If there is a tension between the Anglo-Saxon view and the continental one on labour relations and many other issues, that is not necessarily unhealthy. As the noble Lord, Lord Thorneycroft, said yesterday in his remarkable speech, we are not without friends in Europe, and more are on the way. For those reasons, I support the Second Reading of the Bill and I shall not vote for a referendum.

9.17 p.m.

Lord Renfrew of Kaimsthorn

My Lords, There is a tide in the affairs of men, Which, taken at the flood, leads on to fortune". I need hardly remind your Lordships that the playwright, in his comment on the internal dissensions of the state of Rome, went further: Omitted, all the voyage of their life Is bound in shallows and in miseries". Might he not have been writing about the prolonged ratification process which we are now debating? The Maastricht Treaty was signed, as noble Lords will recall, on 7th February 1992 after my right honourable friend the Prime Minister's notable success in the negotiations which gave Britain our own powers of' decision in relation to economic and monetary union and for the protocol on social policy.

Since that signature, despite the apparent will of the majority of Conservative MPs, despite the apparent will of the majority of Labour MPs, despite the apparent will of the majority of Liberal Democratic MPs and despite the mandate conferred by the general election of 9th April last year, we in this nation have not taken the tide at the flood. Not surprisingly, the noble Lord, Lord Jenkins of Hillhead, spoke yesterday of the dreary charade of convoluted debate in another place.

Nothing is so damaging as uncertainty. It has, I believe, been a misfortune for this nation that the path to our ratification of the Treaty of Maastricht came to be linked with ratification in Denmark. The Danish referendum of June last year plunged this country and Europe into doubt, a doubt compounded by the self-serving decision of President Mitterrand to call a referendum in France, indeed one that was nearly a self-destroying decision in that case.

I would argue that out of those uncertainties, there emerged several of the forces which led to our own precipitate withdrawal from the exchange rate mechanism last September. Our political process has been at stalemate. Only now, with the affirmative Danish referendum last month, has the way been cleared to a definitive ratification. We need look no further for the cause of the decline in popularity of the present Government (not to mention the Opposition) over the past 12 months. It is not the carefully balanced contents of the Maastricht Treaty. It is the prolonged indecision engendered by the sustained opposition of a relatively small number, some of whom, despite manifesto commitments, are bent upon fighting again the battles of yester-year.

The noble Lord, Lord Thomson of Monifieth, commended my noble friend Lord Caithness for pointing out that many of those who oppose the Maastricht Treaty are in reality fighting again the Single European Act, and even the Treaty of Rome. We have been offered this very day apocalyptic visions like that of the noble Lord, Lord Stoddart of Swindon, of a "vassal queen of a vassal state". Some of those visions, in some cases (not necessarily his own), may spring from an underlying and dyspeptic hostility to Europe. Yet in reality, no speaker in this debate—a point well made by the noble Lord, Lord Kilmarnock, a moment ago—has offered any alternative to European co-operation, or to the treaty. It was my noble friend Lady Thatcher who (admittedly in a rather different context) famously said, "There is no alternative". That, surely, is the reality in this case.

How many nations and how many companies will invest in Britain's future when it is unclear whether we are to resume a leading place in the affairs of Europe? How can we expect Britain to lead Europe out of recession when investment decisions are frozen in this year-long agony of suspense?

Some former leaders now tell us that what we really need is a referendum. I will save detailed comment on the merits of referenda for this country until the various inevitable amendment debates in Committee, at Report stage and on Third Reading. Let me now say that it is not clear that the Danish and French referenda did their own nations any good. It is hard to see what will be contributed to the welfare of this country and—let me say to the Benches behind me —to the welfare of this Government by a British referendum.

Uncertainty and delay have undermined our economic and political stability. The infelicities of procedure surrounding the ratification process have undoubtedly undermined public confidence in parliamentary government and in the integrity of the two principal political parties. That has been an unfortunate self-inflicted wound. As noble Lords will remember, Brutus fell upon his own sword. I beg this House not to do the same, but to pass the Bill rapidly, to end uncertainty and bring about a speedy ratification without delay and without amendment.

Let me conclude as I began, with the advice of Shakespeare, as much a European writer as Sophocles or Dante and a significant British contributor to European culture: On such a full sea are we now afloat, And we must take the current when it serves, Or lose our ventures".

9.24 p.m.

Lord Desai

My Lords, let me first of all say that I am for ratification of the Maastricht Treaty. I voted "Yes" in the referendum in 1975, and I have never had any doubt whatsoever that an integrated European Community is the proper place to be.

Many noble Lords have commented on the political aspects of the treaty, and I shall not add much. I merely remind noble Lords that yesterday the noble and learned Lord, Lord Wilberforce, pointed out that Article 189 of the Treaty of Rome, which we signed in 1972, irrevocably changed the situation of our sovereignty. There is no further question about that. Whatever Maastricht does, it follows the logic of the Treaty of Rome and the Single European Act. Not being a lawyer, I cannot question such judgment, but I believe that that is the right conclusion.

The noble Lord, Lord Beloff, made a very interesting speech yesterday. He was kind enough to lend me his pamphlet, A Tale of Two Europes. In his criticism he says only that, Far from the provisions of the Treaty of Maastricht meaning a new departure for the Community, they were another long step forward on the path already mapped out. Everyone who entered into it should have known what they were doing. I knew what we were doing. Indeed, although in saying this it might put people off, all the fears about centralising tendencies do not worry me at all. In fact, I like the tendency.

The working class of Western Europe and the United States achieved their gains when the nation state became a powerful central force, powerful enough to take on capital. From the New Deal onwards, the welfare state of Beveridge and Keynes was the time of the working class of Western Europe and the United States. We now live in a multinational global economy. If we do not have a multinational state, multinational capital will always defeat the workers. That is what the social chapter is all about. I therefore believe that only a powerful multinational state in Europe will restore those gains to the working class. Therefore I am a Euro-socialist. One might even call me a Euro-maniac.

For me the Maastricht Treaty falls short. I shall come to my criticisms later. I am not at all worried, however, about its federalist bias. The noble Lord, Lord Beloff, pointed out yesterday that it was a great pity that we had not had the great debate that the United States had in 1787 around the issue of federalism, and he quoted the federalist papers.

The noble Lord is a distinguished historian and political scientist and I am only an economist, but I suggest to him that in that debate the federalists were for a single currency. They were the centralisers. The anti-federalists were the Bruges Group. What we remember today are the federalists: Hamilton, Jay and Madison. Hamilton was a single currency man. He believed in a powerful bank. He built a powerful bank because he knew that the original 13 states could not achieve a proper common market with trade and free movement of capital and labour unless there was a single currency, a responsible bank and a proper fiscal constitution.

Indeed, it may be remembered that between 1776 and 1787 there were many different states with different fiscal and monetary systems. It was chaotic. To this day, there are people in the United States who swear by the anti-federalist doctrine, but they are few and far between. The United States of America could not have achieved its great status if it had not grasped the centralist option in 1787.

So let nobody believe that federalists are decentralist or believe in small government. The rhetoric is very much derived from Locke: it is an 18th century rhetoric. But the structures were created and in place. And for a centralist that is enough. A civil war was fought on it, won by the Union rather than by the Confederation. Because the structures were in place, when a major crisis took place in the 1930s, they were adaptable enough to deliver the New Deal. I believe that that is the strength of the American constitution.

I have absolutely no worry about the centralising tendency. Perhaps at this moment I should not commend it to the Government, but that is the Government's problem and not mine.

However, there is a major problem which concerns not so much the centralist tendencies or the decentralist tendencies in the Community. The fact is that there have been two contradictory tendencies from the beginning. One is what I might call the Benelux customs union, which concentrates on the free movement of goods and services within a certain area, with tariff barriers to the outside world. That concept was expanded into the Common Market.

Perhaps I can say to the noble Lord, Lord Harris —who unfortunately is not in his place—that it is not an Adam Smith regime; it is a Friedrich List regime, which says, "Laissez faire within the borders and tariffs outside". It was a powerful vision and earned Europe quite a lot of prosperity.

Against that vision is what may be called the Economic Coal and Steel Community, which is standardising; harmonising; a bureaucratic planning regime. Those two tendencies have always lived uneasily together. Those who like the Single European Act think that all that they will achieve is the Benelux customs union. But that union does not come without other apparatus. Indeed, it would be impossible to obtain a common market with free movement of goods and services without a common legal framework to underpin it.

For a long time the economists have neglected to clarify the problem that markets are sustained by legal frameworks. We are learning. We realise that it is implicit in Adam Smith's thinking and that of other people. If we have a common market we must have a common legal framework. We cannot guarantee movement of capital and labour if the rights of labour are different in different countries. That is absurd. If we have a multinational corporation with branches in different countries, it cannot treat its labour differently in one country as against another. That does not make sense. The world is not full of small shopkeepers or small single-owner industries. It is full of global multinational capital, and that global multinational capital needs a proper framework to operate in a large territory.

Therefore, it is clear that as we go further into the Union —I do not believe that we will come out; it is not that there is no alternative, it is simply that there is no better alternative—the contradictions will continue and we shall have to live with them and do our best with them. But free market and harmonisation will come together. However, at this stage, in 1993, if we are to move towards a post-Maastricht European Union, GATT is extremely important. In the absence of GATT, the Friedrich List protectionist tendencies will gain much more power. But in the presence of GATT and of an expanding global economy, we shall receive the benefit of both an internal free market and an outward-looking external stance.

It is extremely important that, while we have been diverted by what I consider to be a somewhat routine exercise, we must not forget the more important problem of GAIT. I believe that the way the French have reacted in regard to GATT and the MacSharry proposals shows that after a long time thinking that they could do what they liked within the Community, they are beginning to have to adjust their domestic policies to the policies of the Community. That is what the fuss is all about. They are finding out that it is not a one-way ride. It is because they realise that that sooner or later they will have to fall in line and we shall have to obtain a GATT agreement. The sooner that happens, the better.

I want to come more particularly to the problem of economic and monetary union, which has been raised by a number of noble Lords. A number of people have confused ERM and Maastricht. They almost believe that all the faults of the ERM are due to Maastricht. That is not true. I remind noble Lords that in 1980 and 1981 when we had severe recession we had flexible exchange rates and an overvalued currency. Free markets can overvalue currency just as much as fixed exchange rates. The recession of 1991 paralleled the recession of 1980 and 1981. In both cases we had an overvalued currency. The 1990 recession started before we got into the ERM. The six months before entry into the ERM were spent by the then Chancellor, the present Prime Minister, in jacking up the exchange rate of sterling against the deutschmark. The doctrine at that time was that if we joined the ERM—as Sir Alan Walters used to say—foreign money would flood into the country and there would be wild inflation. That was absurd. The whole world knew that the ERM was a deflationary strategy. I do not know why anybody thought otherwise. I certainly knew it, and said so.

The fact a at we got into the ERM at the wrong rate—indeed, we engineered the economy to get it up to the wrong rate—was because of the "macho" belief that to get low inflation we had to have a high exchange rate. At that time full employment was so far from the Government's agenda that they did not even care about it. We entered at 2.95 and did not realign, though we had lots and lots of chances to do so. The ERM did not collapse; we were frit. We quit because of sheer incompetence in monetary and fiscal policy and the sheer incompetence of the Chancellor in borrowing 7 billion ecu two weeks before the crisis took place, as if he was not expecting it, and saying that he was willing to do anything in his power except raise interest rates. The market saw through that very clearly and we lost not only 7 billion ecu but another £6 billion on black or white Wednesday, whichever way we put it.

The ERM is a fixed exchange rate system. It is a well-known problem that if one chooses the wrong rate one suffers. I believe that if, after the election, as the then Labour Leader, Neil Kinnock said, we had gone for realignment within the ERM, as most other countries have done since, we would not have suffered. All we now have is a shadow ERM strategy. The Government are shadowing 2.50. There is no question that when we are back in the ERM we do not have any freedom. It is clear that the Government are worried that if they let the exchange rate go they will lose their good inflation record. Having twice doubled inflation and unemployment in the past 14 years and caused two recessions I hope that they will not go for a record and do it a third time.

Many people, especially on this side, are worried that the signing of the Maastricht Treaty will mean an invariably deflationary alternative. I humbly argue, with respect to my noble friend Lord Bruce of Donington—because he has read the treaty much more carefully than I have—that this is a misconception. The first problem concerns the 3 per cent. deficit. The idea is that the PSBR will not exceed 3 per cent. of GDP. If one looks at Article 104C/3, it is pointed out that in calculating the deficit, investment by the Government is not taken into account. We have always had a rather irrational way of calculating PSBR. We mix up capital expenditure and revenue expenditure. If capital expenditure is taken out of the PSBR—as Samuel Brittan pointed out about two weeks ago in the Financial Times the

present deficit is about 4 per cent. of GDP. It is high but not intolerable. If we take investment out of the calculation and calculate the deficit correctly, the 3 per cent. rule is not a bad one at all. There are other exceptions. I see that my noble friend Lord Bruce of Donington is becoming impatient.

Lord Bruce of Donington

My Lords, I am grateful to my noble friend. Has he also included in his calculations—I trust he has—what they call negative expenditure or net receipts from the proceeds of the sale of national assets?

Lord Desai

My Lords, whenever I have spoken in your Lordships' House I have ignored privatisation proceeds because they are really a fake bit of accounting. I agree with my noble friend that the receipts from the sale of capital assets should not be included. We ought to go for capital borrowing. Under Article 104, if a country does not follow this, a good number of procedures is available. It can appeal; it can go back; it can seek derogations and so on. Therefore, I do not believe that it is as big and as strict a criterion as it should be. But if it were I would say that it is not a bad idea. Revenue deficits should not exceed 3 per cent. and one ought to try to balance it over a cycle. When these points are clarified I am sure it will emerge that this is not restrictive.

There are a number of other helpful aspects. For example, under Articles 73f and 73g, capital controls are permitted if a country finds that its balance of payments is in particular danger. If a country is in a particular difficulty with its deficit, Article 105(6) allows other countries to help.

What I particularly like, and what I should like to see more of, is the idea that when, for example, the European Central Bank comes to a decision it ought to consult the European Parliament. As this is an important point perhaps noble Lords will permit me to quote Article 105(6) because it is an important basis for the future: The Council may, acting unanimously on a proposal from the Commission and after consulting the ECB and after receiving the assent of the European Parliament, confer upon the ECB specific tasks". Getting the assent of the European Parliament should be treated as the thin end of the wedge. I agree with the noble Lord, Lord Bethel!, that the powers of the European Parliament are an important element in further democratisation of the European Community.

Lastly, I turn to unemployment. My noble friend Lady Castle and many other noble Lords expressed concern about the high level of European unemployment. I am concerned too. But it is no longer possible, nor has it been possible since roughly 1975, for any country to pursue a unilateral policy of full employment by domestic devaluation or domestic inflation. The only hope of reducing unemployment in the European Community is through co-ordinated action, action such as that proposed at the Edinburgh Summit by Jacques Delors which was somewhat scuttled. There is a book edited by Ken Coates, who is an MEP, about this. Since noble Lords on the other side read Tribune quite regularly they can look up my article on this matter where I point out that there is a feasible strategy for halving unemployment within the European Community.

That possibility is open only if we have Maastricht. If we do not have Maastricht—and many noble Lords do not like Maastricht—we will have the status quo, a status quo with a Commission having even more arbitrary powers. At least in the future the European Parliament will have some powers. In the absence of Maastricht the Commission will have all the powers. If noble Lords do not like the status quo they should not vote against Maastricht. They should vote for Maastricht.

9.45 p.m.

Lord Plumb

My Lords, having spent something over 20 years concerned with various aspects of the development of the European Community, and having sat through the past few hours listening to the excellent observations and wonderful speeches on this historic occasion, I welcome this opportunity to add my small contribution to the whole of the debate.

In the early days of our joining in the development of the European Community, I was involved in the agricultural scene and therefore in reforming our own agricultural policy to a common agricultural policy. How right my noble friends Lord Sanderson and Lord Mackay were in reminding us that had we been in at the beginning at Messina, and had we had that opportunity at the beginning of the Community, we would have been shaping events rather than reacting to them, which is exactly what we have been doing over a long period of years.

In the past few hours we have had a lot of history. In a few moments I want to try to look to the future and to try to concentrate on various aspects of the Maastricht Treaty. It is a treaty which is probably one of the most over-analysed documents in history. It is not at all like a national parliamentary Bill focusing on a single policy area or even like the normal international treaty containing a set of specific agreements to be implemented within a comparatively short space of time.

The treaty goes beyond that. It is therefore in essence a development plan for Europe for the next 10 years and way beyond. It is a vision for a continent; it is a vision with the ambition to secure for Europe stability and prosperity while balancing national diversity and common purpose. We have been reminded so well by my noble friends Lord Cockfield, Lord Pym, and many others, that it is a treaty which has to be seen in the context not of national wishful thinking, but rather in the context of harsher world realities. First, it has to be seen within the reality of the economic and trading situation and the increasingly fierce competition which we have from the United States, Japan and particularly the countries of the Pacific Rim.

Secondly, there is the desperate need to improve on the alarming economic cycle of past decades in which more people have been left unemployed after each cycle of growth and recession. Thirdly, we have seen the collapse of communism which, despite its obvious advantages, has brought with it many dangers and widespread instability.

So to face up to these realities it is imperative that the Community strengthens its position; that it strengthens its voice and influence in the world through the intensification of the process of integration as laid out in the Maastricht Treaty. In that regard we should not forget the fourth reality; namely, what has already been achieved within the European Community. We can draw strength from the knowledge that we have the capacity to build on success.

It will probably come as no surprise therefore that I should be in favour of the ratification of the treaty. At the same time, like many noble Lords who have spoken, one has several reservations on aspects of it, even though I must acknowledge that it certainly was probably the best text that could have been achieved at the end of 1991.

My reservations therefore are that, first, the text itself is extremely difficult to follow without constant cross-references to the Treaty of Rome and the Single European Act. We all rightly emphasise the need to bring the great issues of the day closer to the people. I do not believe that the level of readability of this treaty helps us in that regard. Certainly, if people had a copy of the Treaty of Rome and of the Maastricht Treaty before them, it would confuse them if we were to call a referendum.

Secondly, I believe that the "three pillars" notion which has already been referred to today is somewhat regrettable. It is my hope that defence, foreign policy and internal affairs can be brought within the Community ambit. That point was made forcefully and well in the great speech made yesterday by my noble friend Lord Carrington. This must be one of the objectives of the 1996 inter-governmental conference further to revise the treaties.

Thirdly, I regret the fact that Maastricht has run together both economic and monetary union and the much more difficult topic of political union. I say that because I believe that economic and monetary union can be seen and understood as the natural progression from the completion of the single market. The business world can already see clearly—and I believe that the message is getting through to the public at large—that just as the single market was an extension of the advantages of the Common Market, so the economic convergence and economic and monetary union outlined in Maastricht can be seen as the next logical step, although in today's world, because of today's recessionary circumstances, it is probably a long way off.

It would also have been easier to contemplate much more clearly what might be meant in practical terms by "political union" if economic and monetary union had already been achieved or if it was well under way. But largely due to the unexpected development of German unification, the two strands were run together and this has harmed the acceptance of the treaty among the public at large.

In terms of what is at stake in Maastricht, undoubtedly the major issue—and it is a real one—is sovereignty. And of course the more we look into the future in the Maastricht context, the more important this issue becomes. While sovereignty is an important issue, it must be said that it has been the subject of more nonsensical theories than any other political concept in modern history. To listen to the anti-Europeans, one would think that sovereignty was somehow a God-given absolute, which we British had somehow managed to preserve in its entirety, but which we would lose in a Maastricht-influenced future. As my noble and learned friend Lord Howe said when he was Foreign Secretary, "Sovereignty is not like virginity—something which you either retain wholly intact or have definitively lost".

In reality, in today's interdependent world, sovereignty is always relative and the real question to be asked is: what do we get by way of benefit in return for pooling another aspect of our sovereignty? It is amusing to observe that many elements in this country who originally opposed British membership of the Community are now perfectly happy to accept the present degree of integration, but now say, "This far and no further". It sometimes appears to me that many of the Euro-critics are merely trapped in a continuous time warp of 10–15 years.

I am perfectly prepared to face up to the fact that the next stages of integration outlined in Maastricht will indeed involve a further pooling of national sovereignty; but I am convinced that the returns which will come to the member states in terms of stability and growth potential will make the developments worthwhile. Sovereignty therefore is not something to be guarded but exploited and multiplied to secure its real objective: greater practical influence in the world.

Critics of Maastricht have also said that the goals which it contains are unattainable. They certainly are ambitious, but we should not be pessimistic about our ability to achieve them. Just look at what was possible within the completion of the single market, which in the mid-eighties appeared to many as a wild dream. Yet well over 90 per cent. of the programmes set out for 1992 were achieved, and the rest is following month by month. How many national five-year plans in any country have been achieved to the extent of 90 per cent. plus?

Many of those who do not wish to progress along the lines of Maastricht would claim that they are "pro-European", but they define that as being in favour of free trade, coupled with ad hoc co-operation between independent nation states. That may appear to be a seductive idea. But it is simply not a viable option. In effect, it is the old EFTA formula and those who advocate it have, I am afraid been, suckled in a creed outworn". The proof is that the EFTA members are now queuing up to join the Community. Why? Because they have felt increasingly the isolation of being outside the EC decision-taking process and because they see the need for systematic day-by-day co-operation across the broad spectrum of our common activities. If the current members of EFTA feel isolated, how much more isolated would the UK be outside the system and in a world in which EFTA itself will soon cease to exist?

Let me turn now to the three great myths being peddled by the anti-Maastricht lobby in a way that does such damage to our national interest: first, the notion that within a deeper and possibly a wider Europe we would lose our national identity. What rubbish! One of the principal strengths of the Community is precisely its diversity. And, as John Major recently underlined, our culture, our language, our way of life have in no way been diminished—nor will they be—by our membership of the Community. In so far as the Community has had an impact on national identities, it has been to give them an additional dimension and a profound enrichment. The point about democracy has been made ad infinitum during the debate.

The second myth is that the Community and Maastricht equal being ruled by Brussels bureaucracy. That is the sort of thing that people have in mind. It must be emphasised and re-emphasised that both in the present and in the future the decisions are taken by the Council of Ministers. In all our member states, there is the temptation from time to time for Ministers to put up the alibi that such and such a decision has been taken "in Brussels." But the fact of the matter is that it was they who took the decisions when they were in Brussels.

In saying that, I do not for a moment underestimate the need for greater democratic, parliamentary control, nor do I minimise the principle of subsidiarity which must be applied to ensure that decisions and actions take place at the most appropriate level. Your Lordships will not be surprised that I welcome the greater role given in the Maastricht Treaty to the European Parliament—a role which I believe must be extended further in the next revision of the treaties. But national parliaments also have a greater role to play, above all by having the opportunity to consider European legislation at a much earlier stage than happens at present.

I do not see the democratic dimension as being one of rivalry between the European Parliament and national parliaments. They are not engaged in some Darwinian struggle to the death. Rather, their relationship is one of complementarity. It is not widely enough known that co-operation between national parliaments and the European Parliament has already made good progress, through the setting-up of regular co-ordinating meetings, especially within the context of COSAC (the Conference of European Affairs Committees). This co-operation will become increasingly important in the years ahead.

Finally, there is the question of federalism. It is a popular myth and it is seen as the federalist bogy. I make it clear that I am not inclined to be a federalist; that is to say, of course, that within the Community the idea that European union will mean the recreation of a highly centralised uniform superstate. That myth is based first and foremost on wilful misinterpretation of the word "federal". Only in the minds of our own most blinkered Europhobes does it mean a centralised superstate removing as many functions as possible from national, local or regional decision making. To our European partners it means quite the contrary. Just look, for example, at Germany, a nation rightly proud of its federal structure. Those who are familiar with its system of government will know that it is vastly more decentralised than the United Kingdom.

A very clear definition of how federalism is viewed on the continent comes from a recent statement by the European People's Party—the main centre right political movement in Europe, which in its recently adopted Basic Programme defines a federal Europe as, a decentralised community of nations, not a unitary super-state", and which recognises explicitly that a European Union must, respect the national identities and cultural and regional diversity that characterise Europe as a result of its history". So let us lay to rest once and for all, the absurd notion that the governments and peoples of Europe are determined to hand over their democracy and their destiny to Brussels and that we in Britain are the only ones who value our heritage and national identity. That is not what Maastricht is all about and to pretend otherwise is no more than a clear sign, if one were needed, that those who oppose this treaty have run out of arguments.

It is true that in purely practical organisational terms there will be a need for swiftly operating mechanisms of co-operation at the centre. That is already true with a Community of 12; but with a Community of 15, 20 or more member states that need will be even greater. But political union envisaged in the Maastricht context is the very opposite of the superstate nightmare. When thinking of the European future there is no use making detailed comparisons with the United States of America, the Commonwealth of Independent States, the United Nations Organisation or any other "model". The European Community is a totally new and unique concept which is essentially evolutionary in character.

Maastricht shows the way, but practical needs will have to be found and will determine the detail of how it works in practice. This is an evolutionary process shaped creatively as it goes on. This is an imaginative and worthwhile endeavour. I sometimes wish that we as a nation could demonstrate more self-confidence through a willingness to be enthusiastic shapers of the European future. It is little wonder that when they hear us at our most timid our European partners sometimes look on us as a blocked artery at the heart of Europe. I do not believe that that reflects our true position or our true potential. We have nothing to fear from Maastricht and a great deal to gain from it.

Let us think positively and constructively. Maastricht, for all its flaws, represents a unique opportunity to move forward and to bring great practical benefits to all the peoples of Europe.

10.2 p.m.

Lord Monson

My Lords, perhaps I may begin by referring to a startling assertion made this morning by the noble Baroness, Lady Blackstone: I am glad that she has timed her re-entry to the Chamber so perfectly. She told us that Britain has been part of Europe for the past 20 years, rather as though Britain were a kind of Atlantis which two decades ago had broken away from its foundations and drifted eastward across the Atlantic to end up just off the coast of France. In fact, Britain as a concept has been in existence at least since the time of the Romans and therefore it has been part of Europe for at least 2,000 years.

In fairness, the other side of the House showed itself equally confused when a little later the noble Viscount, Lord Whitelaw—what another excellent piece of timing—maintained that Europe needs Britain and Britain needs Europe. That is rather like saying that London needs Kensington and Kensington needs London—

Viscount Whitelaw

Well, they do!

Lord Monson

My Lords, this is not just hair splitting; it is not point scoring. The matter is too serious for that, because these slips of the tongue reveal the deep subconscious misconception about what constitutes Europe which is prevalent among the supporters of Maastricht both here and on the Continent. Britain is and always has been part of Europe. So are Norway, Switzerland, Poland, Hungary, the former Czechoslovakia and even Bosnia. Europe is not some recreation of the Holy Roman Empire plus the Iberian peninsula and a few other peripheral bits and pieces to which grateful supplicants may be allowed to attach themselves provided they promise to obey a lengthy set of rules. Europe is not an exclusive club; it is a continent. That cannot be emphasised too often.

I agree wholeheartedly with the Prime Minister when he said on 4th November last year that the Maastricht Treaty is "mostly Euro waffle". I find it less easy to agree with him when he claims that it is a decentralising treaty. I am absolutely sure that he is sincere in that belief, but I fear that he is mistaken. Herr Kohl, Herr Bangemann and numerous other senior politicians and civil servants on the Continent, above all those in Italy and the Benelux countries, most certainly do not see it as a decentralising treaty. They would be vastly less enthusiastic about it if it were, and they do not intend to allow it to be interpreted in that way. Collectively they have been at the game much longer than our Prime Minister and Foreign Secretary and collectively they are much wilier. That is what makes the Government's enthusiasm for Maastricht such a gamble.

The idea that by professing to be at the heart of Europe—actually Sarajevo is nearer to the heart of Europe than are Southampton, Solihull or Swansea, but I let that pass—and by displaying bags of Euro-enthusiasm you will thereby tempt lots of other countries over to your side and so ensure a constant winning streak under the majority voting system presupposes that there are large numbers of the people who matter—not the ordinary people—on the Continent who secretly have shared all along your hopes and fears (British hopes and fears) and your fundamental outlook on life and have been waiting impatiently for you to appear on a white charger to give them the anti-federalist leadership for which they have been waiting.

Unfortunately those like-minded people, those soul-mates will in practice be few and far between, for a variety of historical, geographical, cultural and psychological reasons, some of which were given by the noble Lord, Lord Thomas of Swynnerton, in an interesting speech. There is the strong autarchic, protectionist, dirigiste, continental tradition referred to by the noble Lord, Lord Beloff, yesterday evening, allied to the little Europeanism cited by the noble Marquess, Lord Donegal!, yesterday, with its associated suspicion and even dislike of the United States, Japan, Australia, Canada and New Zealand, to say nothing of other countries more culturally remote.

There is also a widespread lack of real national pride, partly as a result of the role which many of those countries played or failed to play during World War II and partly because so many countries, as the noble Lord, Lord Dacre, reminded us, are only 19th or 20th century creations. Thus they lack deep-rooted national traditions.

But above all there is the amazing supposition, adhered to by many in this country, as we have seen from this debate, as well as those on the Continent, which flies in the face of all historical evidence, that the nation state is responsible for almost all conflicts between peoples. Therefore, if you abolish the nation state, you abolish the conflicts. Hence the urge, over the long term—not overnight of course—to weaken the power of national parliaments, most of whose powers would drain upwards (if that is possible under the laws of physics) to Brussels and the balance downwards to the supposedly non-militaristic and tranquil regions: the German Lander, Flanders, Wallonia, Lombardy, the Mezzogiorno, Burgundy, Brittany, Galicia, Catalonia, Scotland, Wales, Mercia and Wessex or some 20th century version of Mercia and Wessex. It is no wonder that, of the three main political parties, the Liberal Democrats are the keenest on Maastricht. They have no chance whatever of winning power in the United Kingdom as a single entity, but in a virtually self-governing Wales or Wessex they just might do so.

It is true that the ordinary people of Europe, unlike their rulers, are increasingly opposed to greater European integration, but it is hardly likely that a British Prime Minister could rally successfully the people of the Continent over the heads of their political masters. In any event, the opposition of ordinary people can always ultimately be deflected by bribery—that is, bribery with their own money, which most people do not realise—scare stories to do with the threat of massive over-night unemployment and downright lies. We saw that in this country in 1975 and we have seen it again in Denmark over the past six months.

In a nutshell, the idea that we can just walk in and shape or mould the Community, as at least 25 speakers have suggested during the course of the debate, is illusory. By and large, the Continentals are not hostile to Britain, they simply have no interest in being moulded or shaped by us: least of all the farmers.

In The House Magazine last week, the Foreign Secretary extolled the treaty on a number of grounds: above all, the alleged benefits that would flow from the application of "subsidiarity" (notwithstanding a description of the concept as "gobbledegook" by a former president of the European Court). Mr. Hurd urged that subsidiarity should become the guiding principle of Community legislation", and that, the body of existing regulations should be regularly culled". That is a most exhilarating and welcome prospect. But the proof of the pudding will be in the eating. Will control over drinking water, bathing beaches and small local slaughter houses be returned to the competence of national Parliaments? They have no cross-border implications. If they are not to be, I suggest to your Lordships that the whole concept of subsidiarity is a sham.

The omens are not good. Last December the Foreign Secretary and the Prime Minister went to Edinburgh asking for 71 proposed Community laws to be scrapped. They returned with fleas in their ears. Only three minor prospective directives were scrapped, six were slightly watered down and 11 were shelved for further consideration—a pretty feeble tally for all the undoubted effort put in by the Government. But that is not surprising. When people are given too much power over others, they are reluctant to relinquish it. That is a normal human failing.

We also have the sinister European Court to contend with. I say "sinister" not because of the worthy individuals who sit on it, but because of its essential nature. As the noble Baroness, Lady Thatcher, reminded us yesterday, it is not the sort of impartial and dispassionate entity such as we are used to in this country, sticking rigidly to the letter of the law; it is a highly political, almost crusading, body (on the lines of the United States Supreme Court, but more so) with an in-built bias against the traditional nation state and in favour of ever-increasing European integration and centralisation—and thus prone to interpret every ambiguity accordingly. There are plenty of ambiguities in the treaty, although I quite accept the contention of my noble and learned friend Lord Wilberforce that there are rather fewer in this one than in previous treaties. So there is not much hope of devolution of powers back to nation states from that quarter.

In addition, the court has a proven habit of converting into binding law the mere aspirations and broad principles set out in various European treaties. This has grave implications for our ostensible ultimate freedom to pursue an independent foreign policy in extremis. That freedom is, theoretically, guaranteed by the treaty, but the court may well in future rule that what appears to be a vague commitment to support the policies agreed by the Council of Ministers "actively and unreservedly" is, in reality, a binding obligation. A nation state which is forbidden to pursue an independent foreign policy when its interests are threatened ceases to be a nation state in anything but name. It becomes rather like East Germany or Czechoslovakia 10 years ago.

I turn now to less grave but still important matters. Another supposed benefit of the treaty is the power to fine member states which disobey the Court's rulings. That sounds fine in theory, but can one seriously believe that, in practice, the payment of a substantial fine would be enforced if to do so would bring to power a government of the extreme Left or the extreme Right in one of the states on the periphery of the Community that was going through a period of extreme turmoil? One suspects not.

It is also claimed that the treaty will facilitate the immediate enlargement of the Community and that such enlargement will be in our interests. Will it really? For all their undoubted virtues, the majority of the three or four relatively wealthy candidate countries are pervaded by a politically correct left-of-centre ethos, and are strongly sympathetic, for example, to social engineering, high rates of personal taxation, penal taxation on alcohol and similar policies which we do not in general find congenial.

None of this is to argue for one moment that the door should be slammed on such applicants. Not at all. However, let us not delude ourselves that their entry will be an unmixed blessing from the United Kingdom's point of view.

There is no time to speak about the GATT agreement except to say how much I agree with those noble Lords who pointed out that a successful conclusion to the GATT negotiations is vastly more important to our wellbeing and the wellbeing of people throughout Europe than is the Maastricht Treaty.

Europe as a whole faces some major medium and long-term problems which have so far not been discussed: a rapidly ageing population; an increasing aversion to risk (no risk-averse civilisation has ever survived for long in a competitive world); and a falling birthrate vis-à-vis the rest of the world. All need our fullest possible attention but none can be solved by Maastricht or any other rigid treaty. I am arguing for a looser and more flexible form of co-operation.

Finally, there are individuals who will accuse those of us who oppose Maastricht of not only casually disregarding the eternal hatred promised us by Sir Edward Heath but, even worse, of being "Little Englanders". Let me therefore end with two short quotations: The treaty is not a broad framework, but an iron collar … What underlies Maastricht is a determination to create a federal entity: in other words one single nation, one single state, one single people, where formerly there were 12—nothing less"; Maastricht will not aid stability or harmony—quite the reverse! If it comes into force the treaty will worsen national rivalries, create new tensions … and lead Europe into uncharted waters". The rantings of provincial Little Englanders who have never strayed further than Clacton? No, my Lords. The first quotation comes from an article published last year by M. Charles Pasqua, who is currently Minister of the Interior in the French Government, and the second from an article by M. Philippe Seguin, who is speaker of the Assemblee Nationale. Need one say more?

10.17 p.m.

Lord Butterworth

My Lords, with me your Lordships recognise that you turn over to the second sheet of the list of speakers and will soon be on your way home. I shall set an example by being reasonably brief.

In this debate we seem to agree that the Maastricht Treaty is in need of drastic amendment, but the differences between us are whether the only solution is rejection of the treaty or holding a referendum, on the one hand, or whether it is now in our interests to ratify the treaty as soon as possible and then seek to make the amendments from within the Community.

In passing, it is worth noting that many of the changes necessary have been brought about by events which have occurred since the treaty was signed in 1991. For instance, we now realise that the Community's interpretation of subsidiarity differs greatly from ours. We therefore simply have to find a way of achieving a decentralised framework for the Community. Again Black Wednesday demonstrated that the economic convergence already achieved is not sufficient to support a single currency or economic union.

Finally, the entry of the four new members—Austria, Sweden, Finland and Norway—underlines the need for a larger, different, more disparate union. Indeed, instead of worrying as we used to about a two-speed Europe, I now begin to wonder whether we could not devise a multi-speed constitution which would not require all members to join in every area of European activity. However, the preparation and negotiation of all those changes must occur well before the next inter-governmental conference.

From the time we joined the Community, membership for UK citizens has broadly meant membership of the common or single market, whereas for other countries the main thrust of the Community has been political, not economic. As we have heard, the founders of the Community—Monnet and Schuman—had a political vision of Europe; and while we do not know precisely what that vision was, since that time the theme of European union has been continuously developed. It has gradually become more specific and more detailed, as we have heard time and again, encapsulated in the words "ever closer union". How can we possibly say that what we joined was an economic arrangement?

One of the problems is the difference of approach between us and our continental colleagues. We tend to construe Community legislation according to the principles of construction employed in construing statutes, whereas the remainder of the Community has a much more organic approach. They look behind the treaty and see European union as a political reality, the outline of which has already been settled and which is gradually being filled in with more life and more detail by the political processes of the Community.

The other member states see the single market, monetary union and economic union not as ends in themselves but as stages towards achieving a political union, a new political reality. Indeed, the countries now wishing to join the Community—the EFTA countries—are faced with two tests. The first is: "Do you agree to accept the acquis communautaire?". The second is: "Do you accept the finalité politique; that is, that the Community's goal is political union?" The EFTA countries are being accepted on the basis that they answer those two questions positively.

In view of what my noble friend Lord Plumb said, it is necessary to point out that the gradual development of European union to date has been marked by each treaty requiring a further surrender of sovereignty from member states as a condition of continued Community membership. The amount of sovereignty being surrendered has increased with each treaty. The problem for us is how to persuade other member states that this process must be changed. As I have hinted already, it is a problem which is aggravated for us because our experience of government and administration is so different from that of the other 11 countries, with the possible exception of Ireland.

The constitutional structures of the Community are largely French in design and character, in the Roman or civil law tradition, authoritarian, with no clear line between politics and administration, and with very different ideas of parliamentary and public accountability. By contrast, our unique constitutional and administrative structures, based on the Anglo-Saxon legal tradition, set great store by certainty and precision. While Ministers and officials are frequently granted the widest powers in order to get the job done efficiently, they are at the same time subject to the rule of law. In these matters, therefore, it is quite natural that the United Kingdom should come to be regarded as the odd man out.

Because our approach is so different, we simply have to ask the question: what are our chances of preventing ever closer union from being converted into a single European federal state? It is no good ducking the issue, it must be asked. What chance have we got of persuading the other member states that a more successful precedent for the evolution of the Community would be a close association of states, co-operating for the benefit of their peoples, while retaining their national identities?

Perhaps I may make a couple of points about subsidiarity because it has been mentioned so frequently in the course of the past two days. I can quite understand the objective of those who urge that subsidiarity should be defined in Maastricht in order to establish it as a fundamental principle of the Community. But logically subsidiarity is a political not a legal principle. It is a political principle by which states should decide what powers they are prepared to cede to the centre. By defining it in the treaty, we therefore convert what is essentially a political discretion into a legal one. Consequently, when the Commission has acted and a member state maintains that subsidiarity has been infringed, the dispute cannot be settled by what that member state was prepared to surrender to the centre, as we have heard from the noble Lord, Lord Monson. It will presumably now be settled by the European Court.

My last point is this. It is an excellent example of the difference between our view of government administration and what I might call the continental view. The European Court is not—I repeat not—like an English court in that it has much greater power to create new law. Indeed, it has been referred to as the "teleological method of interpretation". What is meant is that the court can, if it wishes, ignore the clear words of the treaty to give effect to what it considers to be the underlying objective. Such an interpretation goes far beyond what we understand is the function of the court. In effect, it has the power to make new law. If the court were minded to consider the scope of subsidiarity, it has assistance from Maastricht in being particularly innovative.

I wish to quote one resolution which has already been quoted this afternoon but in a rather different context: Resolved to continue the process of creating an ever closer union among the peoples of Europe in which decisions are taken as closely as possible to the citizen in accordance with the principle of subsidiarity". Noble Lords will note that the treaty is saying that achieving ever closer union is not restricted in any way by the principle of subsidiarity; rather it is saying that subsidiarity is a mechanism which is complementary to ever closer union.

Nevertheless, I am convinced that we are so committed to the Community that, in spite of all the difficulties, we have no practical alternative but to accept Maastricht and work for the drastic changes which the treaty needs from within the Community. What I should like to put to noble Lords tonight is that our chances of being more successful are greater if we try to understand the approach of our European colleagues.

10.31 p.m.

Lord Elis-Thomas

My Lords, following the lead of the noble Lord, I shall follow his key word "subsidiarity", and I thank him for making some definitions for me. But I also want to speak about the importance of cultural diversity, which is closely related to the issue of subsidiarity, as indeed is the issue of environmental and community sustainability within the regions of the Community. Those issues have concerned all of us who have been engaged for a long time in the debate about the relationship between the United Kingdom, its constituent parts and the rest of mainland Europe, as I should like to call it.

What the noble Lord did not mention is that subsidiarity has its roots in Catholic moral theology. I am not sure whether or not that endears it to the House. The concept developed there; it has been extended into politics; and refers to the fact that power should not be over-concentrated, whether in the central decision making of member states (nation states); or whether it is the economic power of capital; or whether indeed it is the power of an organised labour force. In those days the Catholic doctrine tried to develop an alternative to state socialism, incipient fascism and rampant capitalism. It is interesting for me as a cultural historian to see how that term has become translated, as it were, into the political debate on mainland Europe of the Christian democrats and the Christian socialists.

There are those in this House who want to see our traditions in the United Kingdom as somehow completely separate from the traditions of mainland Europe. But again I cannot but see, looking at the cultural history of these islands, that there is a complete intertwining of our thoughts and our attitudes, and that we have all influenced each other in the development of our culture, our literatures and our politics. Not only is the United Kingdom at the heart of Europe; it is also at the mind of Europe. I feel that very strongly because I come from a particular nation, and from the Celtic tradition, which was well dispersed throughout Europe. I am still a speaker of a Celtic language, which is now supported by legislation of this House. I see the inherent link between mainland Europe and the island Britain (to use that old historical tradition) as something which is being developed further by the Maastricht Treaty.

But then I have to ask myself: what is the cause of the anxiety which I see so widespread on many sides of the House? It is not perhaps so apparent on the Liberal Benches, but we have certainly heard anxieties from other Benches about the concern that somehow there will emerge the kind of unitary, centralist nation state which is then labelled "federalist" by its opponents.

To me a unitary nation state is the complete antithesis of federalism. All federal models which I know of are models which have a dispersal of power and mechanisms for dispersing that power. There are power relationships between different centres within a structure of a federation which is usually called a federation of states. The fact that that model often breaks down in tragedy—and in appalling tragedy, as we have seen recently in Yugoslavia—is not necessarily criticism of that model. It is a criticism of the way in which that model has developed in that particular context.

But then, when I see the anxiety expressed by well born Englishmen and Englishwomen, and indeed by other colleagues from my own nation on these Benches - I heard yesterday the noble Viscount, Lord Tonypandy, who is a noble British nationalist who has always espoused that creed—I think that I understand that they come from 'the tradition of a unitary state. The fact is that many states people and politicians in these islands cannot conceive of a politic which is outside a unitary centralised nation state. That is the UK model. The United Kingdom is the most over-centralised state in Western Europe. All its powers are located in the structure of a constitution of Crown and Parliament.

I hear mutterings about the French state. Even the French state now has more of a regional structure than has the United Kingdom. Consider the Spanish state and the recent elections in Catalonia, the Basque country and Andalucia. Again we see the importance of diversity within that state. No doubt there will be further autonomy within that structure granted to those important historic regions of Spain.

Let us look again to the structure of the Belgian state and to all the structures which have been developed in recent years, particularly the German model about which we have heard this evening. It has a thoroughly decentralised regional structure. Again, in that context there are people there who have experience of different levels of power. They do not think of political power as being sovereign power based in a particular institution or particular place. But in the United Kingdom that seems to be our only possible model.

Because of that there is great anxiety at the idea of powers somehow being transferred somewhere else. But political realities speak of powers everywhere. There are or were powers in local government in parts of the United Kingdom. It is only in the United Kingdom that a central Parliament could abolish local government by legislation. That would be unthinkable in the carefully structured regional constitutions of other states.

For those reasons I think I understand the anxieties of true born Englishmen and Englishwomen or British nationalists as they face the prospect of greater integration with the rest of Europe. To me all that the Maastricht Treaty implies is but a further step towards a greater diversity of political powers. It also means a greater integration in other ways. Indeed, in many aspects, although the Maastricht Treaty can be accused of developing forms of economic centralism, I agree very much with the noble Lord, Lord Desai, who made the point that economic centralism or at least a degree of economic coherence above the member state structure and above the nation state model is absolutely essential if we are to have some part in planning the relationship between multinational capital and the rest of the population.

That is why historically the European Community developed in the way that it did. The nation state, the member state, even the United Kingdom—or perhaps particularly the United Kingdom because of its structure—is too large to deal with the regional environmental issues on one level and yet too small to deal with the issues of the welfare state model, the issues of economic development, the issues of regenerating growth out of a recession. All those issues cannot be dealt with any more at the member state level. Therefore European structures are needed to deal with them. That is why the environmental policy of sustainability is such an important part of the Maastricht Treaty and the European Community programme.

The other matter to which I want to turn very briefly is the cultural diversity at the heart of this policy. The Maastricht Treaty emphasises for the first time the national and regional diversity of the European Community. That is extremely important because that is what belies all the screaming that I hear about a loss of national identity. Here I stand, a representative of a nation which has been part of a unitary state for something like 600 or 700 years—the Act of Union has recently been abolished in the Welsh Language Act, as noble Lords will be aware (at least the spent parts of it that were left). I am a member of a unitary state structure, but my national identity has not been diminished one jot by being part of the United Kingdom. Similarly, I say to other noble Lords—I speak particularly to the noble Viscount, Lord Tonypandy, here perhaps—who feel that their British identity is threatened by greater integration: fear not, because the strength of your Englishness and the strength of your English culture will see you beyond Maastricht.

My final argument in support of the treaty concerns a point on regionality. In the treaty, for the first time, we have a structure in the European Community called the Committee of the Regions. It will ensure direct representation for regions within the Community structure alongside the Economic and Social Committee.

There has been some argument in another place, which no doubt noble Lords will have followed, regarding membership of the committee. There are to be 24 representatives for the United Kingdom. There have been negotiations between the party of which I was a member in the other place for some time and the Government on the membership of the committee. We have secured membership for our own party—an elected councillor from Wales—along with the other political parties as part of that Committee of the Regions. The whole purpose is that the committee should reflect the political diversity of Wales as part of the United Kingdom delegation to that committee representing each of those regions.

An important part of the agreement is that there will be a reporting back structure whereby members of the Committee of the Regions will be able to report back to a forum in Wales of Members of Parliament, Members of the European Parliament, representatives from the new local unitary authorities and, it is to be hoped, Members of this place, should they wish to participate in such a forum. That will ensure that there is a direct relationship between the Committee of the Regions and the national region of Wales itself.

To me that is what the treaty is all about, because the principle of subsidiarity does not stop at the member state. In the United Kingdom, politicians seem to think that subsidiarity is about not doing in Westminster what might be done in Brussels, or the other way around. For those of us who try to understand European politics, subsidiarity is about not doing in Brussels what one can do better in Barcelona or in Cardiff, or indeed in Wrexham, Bangor or in Holyhead. It is doing it at the most appropriate level of government. That is again where some of the anxieties of the opponents of Maastricht can be understood. They fear losing some residual powers from a centralised authority; not being prepared to share power within the United Kingdom as well as sharing power between this United Kingdom, its institutions and the rest of mainland Europe.

I have one final word on the thorny issue of a referendum. I have participated in many referenda in my life. I have been on the wrong side in almost every one of them. There was only one referendum which I won, and that was the one to open public houses on a Sunday in my previous constituency. In all the other cases, I campaigned on the wrong side; that is, the side that lost—it might have been the moral right side. That may make me see a referendum in a rather dim light. But I favour the principle of a referendum on the Maastricht Treaty and indeed on all other major treaties. But I wish that referendum to include a reference to the potential autonomous status of the nations and regions of the United Kingdom as well, so that we can have complete subsidiarity as a basis for that debate in the referendum.

With that caveat, I hope that we shall be able to support the treaty and see it through the House, and have an end to the debate in the United Kingdom which leaves us outside the central debates of mainland Europe.

10.43 p.m.

Lord Wade of Chorlton

My Lords, it has been a great privilege for me to listen to the splendid speeches that we have heard from all sides of the House on this issue. They were erudite speeches from extremely clever men. I cannot fit myself into that category. I am a simple man, with a regional accent like our previous speaker. Therefore, I shall be speaking on behalf of not simply what I believe to be the right approach but in a sense the small businesses with which I am involved and the region from which I come.

Many noble Lords have expressed the serious anxieties that I have regarding what is now emanating from the Commission. Anxieties have been expressed regarding the role of the European Court, regulations and the undemocratic bureaucracy which makes more and more decisions in regard to what we do. I am concerned about the fact that Europe seems to be creating rules and regulations that make our industry more uncompetitive on the world scene. Yet my reaction to those anxieties is not to say that we must take no further steps but to see them as a challenge for both Britain and all Europeans to use the Maastricht 'Treaty as a way to deal with the problems which takes them away or alleviates them and produces a Europe which is more market oriented, more dependent upon the competition between countries and more open to the changes which will be necessary.

I do not think we should be concerned about taking the Bill forward. I see enormous opportunities that can emerge from it. I believe in a Europe that can bring all of its people closer together. We in this House ought to be having a much closer relationship with our counterparts in second chambers throughout other countries in Europe. As nations we ought to be talking more closely to our business colleagues and people involved in all parts of active life, not leaving it to the Council of Ministers, representatives of different governments and the democratic systems to which my noble friend Lord Plumb referred. We should unite to decide how we want Europe to proceed.

A Europe that takes an active role in the future is one that looks at the competitiveness of the whole world. It has to see the challenges that will be presented to all those who live in Europe in terms of the standard of living and the business they might be able to achieve and the creation of a culture and an example for the rest of the world. That will come not by our constantly looking back at Sodom and Gomorrah but by having some vision of the Delectable Mountains. Somehow the concept of the challenge of Europe is missing from many aspects of this nation. We have continually looked at the nitty-gritty without looking at the great opportunities that lie before us. The passing of the Bill and signing of the treaty will not be the end of anything but the beginning of a new opportunity for all the peoples of Europe.

Yesterday in this House I dined with the leaders of the young presidents organisation of business people in Germany. That they should be here yesterday evening so that we could get their views was most apt. Their concerns about Europe and the way it was being developed by the Commission were exactly the same as mine and those of many other business people throughout Britain. But there was no understanding between them and ourselves that we were at one. Each group of people blamed some other nation for creating the regulations and controls with which we were all so fed up.

We must also understand the criticisms that many noble Lords, including myself, have made of the way that the Commission and Europe now take more and more control over issues that they ought not to be concerned with, and that that is happening under existing legislation before the Maastricht Treaty is in force. I see the Maastricht Treaty as something that can help us to reverse that situation and not make the position worse. It is a challenge to us as a nation to lead Europe and create a Europe that is much more free-market oriented and one that understands the importance of the individual and (if I may say to noble Lords opposite) the creation not of a Socialist Europe but a Conservative one that understands the importance of competition and giving freedom to the individual.

Only two weeks ago in Liverpool there was a celebration of the Battle of the Atlantic which took place 50 years ago. I had the privilege of listening to a concert by mass marine bands at Goodison Park. Many thousands of people were present. It was a wonderful display by today's youth. Many were in their early teens. It was a moving experience to be reminded of the vast numbers of young people who were killed during the last war and those who have now replaced them. When we fought the last war in which many were killed Europe again faced a challenge. It was then a physical challenge to which the youth of the country responded. They went forth and won it. I believe that we are now at the forefront of a similar challenge and that we need, and the Government need, to galvanise the youth of the country, as it was galvanised then, for a different battle. We need to bring Europe together in such unity that it can lead the world so that European culture and European ideals can be used to strengthen the benefit of everyone who lives in Europe. This is an opportunity that we must now grasp and take forward.

10.50 p.m.

Baroness Oppenheim-Barnes

My Lords, I shall attempt to detain your Lordships only very briefly. I do so with diffidence and humility as I cannot hope to match either the eloquence or the expertise of so many of your Lordships who have already participated in the debate. There can scarcely be anything at this late hour in the debate that has not already been said, but I shall try.

I believe, as modestly as I can, that my credentials for participating are impeccable since I voted against our entry into the EEC more than 20 years ago in another place, having first held a widespread and well-ordered referendum in my then constituency which itself took place only after I had visited Gloucester's twin cities in the then Community, studied them closely and the effect that membership of the Community had had on them and reported back. Those are my credentials.

During the many debates in another place in those days, in reply to the doubts, reservations and concerns expressed by many, assurances flowed promising then what turned out to be the great, great grandparents of today's Euro-jargon, "subsidiarity" and "opt-out". Of course they had different names then. Only from within, we were told, would we be able to negotiate from strength, and so on. All that was in relation to the European Economic Community and not to the integration federalism or union that are provided for in the Treaty of Maastricht ratified by this Bill. How lovely it would have been if everything had turned out as our misty-eyed Euro-idealists sincerely believed.

Sensible though it may have seemed in so many ways to have a European Economic Community, even in that comparatively limited context it really cannot be claimed to have been an overwhelming success, as so many noble Lords have pointed out already. Over the past 20 years or so the cost has been staggering. I am not adding on bits that come from the balance of payments deficit. It is a staggering amount. We do not even know what the full amount is because it cannot be computed. We have paid it out in administrative costs in the Community itself. We have paid it out in ministerial time and officials' time in this country. I shall not detain your Lordships with hair-raising stories of my own ministerial experiences in dealing with anti-consumer common market regulations which were in fact dressed up as consumer regulations. There has also been the cost to consumers in this country, week in and week out, of the CAP. That has been no small cost.

Yet in all this time over the past 20 years there has been a slower growth in GDP in the Community and a faster rise in unemployment than in the countries of our main competitors. But just to show how even-handed and fair-minded I am and that I am not one of these "phobes" that the noble Lord, Lord Plumb, referred to, I accept that on the credit side there has been substantial United States and Japanese investment in the Community during that period which may not have taken place had it not existed. But that is all in the past.

Although we ignore the lessons of the past at our peril we must of course now look to the future. It is because the future is so vital that it seems crazy to go plunging ahead just for the sake of it.

Why cannot we pause, take stock, and deal with some of the unsatisfactory aspects of the EC to attempt to improve it now? That is one of the alternatives which so many noble Lords have called for. They have asked: What is the alternative to the treaty? That is the alternative to the treaty; namely, to create a sounder background from which to go forward.

In a very eloquent speech, my noble friend Lord Carrington pointed to the dangers of going too far too fast. I thought that that was an excellent sentiment that counters those who have been talking about too little and too late. Surely, we should be prudently cautious before taking this further stride forward into federation in an entirely different context from that which existed when we joined the EC; one which has been transformed by the liberalisation and the liberation of 400 million people in Eastern Europe.

That surely alters our concepts, judgments and concerns as Europeans. That cannot be glossed over by any of the general assumptions of the treaty; neither can the three areas of chief common concern be glossed over by assurances about opt-outs and subsidiarities. Economic and monetary union are concepts which were relegated to Cloud cuckoo-land on Black or White Wednesday, whichever one prefers, when disunity and self-interest on the part of our "partners" and not common interest and co-operation were the order of that day and of many days to follow.

In a brilliant maiden speech my noble friend Lord Parkinson was of course right to describe the ERM as a disaster and to re-emphasise the damage that the natural lack of economic synchronisation has imposed on our own economy. The proposals in the treaty relating to a common foreign policy are even harder to swallow. I personally cannot remember a single occasion or a single crisis over the past 20 years, whether in the Middle East, the Gulf or in Bosnia, when the Community responded to it by speaking out strongly with one voice without prevarication or any backdoor deals. However desirable, even the reunification of Germany, with its very widespread ramifications for the economy of the whole of the Community, took place with hardly any consultation whatever.

Then there are the problems of immigration, citizenship, migration, rights of residency and the right of any national to stand for election for office in their selected country in the Community—all provided for in the treaty. Those are genuine causes of scepticism and concern, not among avowed Europhobes or whatever they are called, but among sensible people who want us to be members of a strong, united Community, but who have a responsibility to count the cost.

Once again, in 1972 our concerns were met with assurances. In 1988 and 1993 they were met with the same assurances. There is our right to opt out only if we first opt in. One does not have to opt out if one has not opted in in the first place. There were assurances about our veto rights. There is also the need to be trusted by our Community partners so that we can have a strong influence from within if Britain's interests are threatened. Those are the oft-repeated arguments of the Euro-enthusiasts.

I would be less sceptical about those assurances were it not for the fact that the one person who attempted to do precisely that and who constantly and brilliantly over the years stood up for Britain's interests from within the Community and who won great battles for our budget in the Community, was then reviled for doing so by our Community partners and by many others as well. Of course, I speak of my noble friend Lady Thatcher.

The noble Lord, Lord Harris, and my noble friends Lord Skidelsky and Lord Beloff all put forward powerful arguments, and I cannot hope to have matched their eloquence or that of my my noble friend Lady Thatcher.

Finally, if anyone had any lingering doubts at all about the motives of some of our partners, they must have been dispelled by the fact that scarcely was the Third Reading of this Bill secured in another place when a snook was cocked at our opt-out right on the social chapter and further federalism was immediately proposed.

I certainly shall not attempt to vote against or oppose the Second Reading of a Bill which has already been accepted in the other place, but if at a later stage an amendment is tabled proposing a referendum I would support it as long as the referendum was put in clear and precise terms, so that people knew exactly what they were voting for or against. I believe that that is the very least that we should offer the people of this country before we take a final stride towards the "Venus fly trap" that is waiting to swallow us whole.

11 p.m.

Lord Rees-Mogg

My Lords, it is a late hour and by my reckoning it will he after three o'clock before this debate closes so I shall endeavour to be as brief as possible. I think that it is agreed on all sides that we have had an extraordinarily interesting debate with many different and fascinating points of view being expressed. I should like therefore to make my position quite clear: I am pro-Europe and anti-Maastricht. I am more worried about the effect of this treaty as a whole than I am about the effect of this treaty on Great Britain taken on our own. I regard the possible damage that will be done to 300 million people in the European Community, to the structure of the Community itself, to its prospects in the 1990s and in the next century, as being the matter with which we ought to be most concerned.

Indeed, I am even more worried by the concept of the opt-outs. It is perfectly true that the opt-outs are from matters which I would regard as highly dangerous and objectionable. On the other hand, it seems to me that in going for those opt-outs, the Government are saying, "These things are bad for Europe", because if a single currency and the social chapter are bad for Britain, it seems to follow that those things will be bad for the other countries of the European Community as well as for ourselves. If we have the Government commending to this House a treaty about which they have such reservations and reservations on such central matters, it is very difficult to believe that they are saying anything else than, "It is all right for the Europeans, but it is not good enough for us". I should be very worried if we took the view in this House or in this country that a treaty which was damaging to Europe had been in some way rectified because the particular poison had been taken out so far as Great Britain, and Great Britain alone, was concerned.

Why should one be so worried about the effect of the treaty on Europe? It is because Europe is facing and is in the middle of a major economic crisis: a crisis which I suspect is worse than most Members of this House have yet recognised —certainly by the tenor of the debate so far.

We have at present 17 million people unemployed in Europe, and I thoroughly sympathise with those noble Lords who have said that that is an intolerable level of unemployment and not one which we can possible accept.

The latest forecast is that European GDP as a whole, despite a British recovery which is still weak and fragile, is now expected to fall in the year 1993–94. We are still in decline. We have no certainty as to when that decline will end. It may end in 1994. It may go through until 1995. When the recovery comes, it is likely to be like that of America or ours - a weak and feeble recovery rather than a strong and vigorous one.

If one looks at the present state of the economies of the largest European countries, Italy has great difficulties with its finances; Spain has unemployment somewhere around 17 per cent.; France has perhaps a rather stronger economy, but nevertheless is clearly in depression; and Germany's economy is in the worse shape it has been in probably since the early 1950s. It is facing all sorts of problems of adjustment and the basic problem of competitiveness.

Given that situation, anything which damages the European economy (which limits it) is something that we should reject, not for our own sake, but for the sake of the European Community taken as a whole.

There is a second part of the European crisis, and it is the one which I would regard as the graver of the two. Europe is one of a small group of major trading regions which are in competition with one another. One has been almost knocked out and perhaps should be looked at first. That is the position of the former Soviet Union and of Eastern Europe. They at the moment are on the floor with terrible economic conditions in most of those countries. But we must recognise that as a result of that, they have wage rates which are, in some cases, less than 10 per cent. of the wage rates of Western Europe. At some point, although we do not know exactly when, there will begin to be a recovery there; and when that recovery starts, it will be on the basis of wage rates which are competitive with ours. But that is just the weakest of the groups.

The next weakest of the groups, leaving Europe on one side, is the United States. The United States has serious deficit problems. It has serious problems with its balance of trade and payments. Those things are in common with the European Community, but the United States has one advantage over us. If one compares the success of the United States in advancing into the most advanced areas of technology, the United States is well ahead of Europe. It is also ahead of Japan.

Then we have Japan herself, a very powerful economy, with a balance of trade surplus now moving towards 150 billion dollars a year; an enormous rate of savings; a high rate of investment; and an industry which, in many areas, is the most efficient in the world. It is certainly far more competitive in many areas than European industry and with lower costs.

Finally one has—and this is so visible from Hong Kong—the explosive expansion of the economy of China and the area around China. It has 1.5 billion people who are moving into the advanced industrial world. Of course, that will produce great opportunities, but unfortunately opportunities which are most remote from Europe and which Europe is most ineffective in taking. The Americans are better at it. The Japanese are much better at it. We are at the back of the queue in taking advantage of the opportunities for expansion in Asia. That is the European situation: less competitive than China; less competitive than Japan; less competitive than the United States; and, ultimately, probably less competitive, at least in terms of labour costs, than the former Soviet Union.

In this situation one must look at the treaty and ask whether it helps or hinders. The first point to make relative to the depression which exists in Europe is whether the treaty will lead to a more rapid recovery or whether it is inherently deflationary. I certainly take the point which more than one noble Lord has made that, if you put affairs in the hands of nominated bankers who have no constituency, who have no people to put them under pressure to create full employment and who are merely given the instructions that they must try to maintain stable prices, the natural effect of that—the actual affect in every instance where such a policy has been applied - is deflationary in character.

There are times when deflationary pressures—resisting inflation—is exactly what is needed. But when Europe is moving still down into a deep depression, with 17 million unemployed—and that 17 million will increase to 20 million—to say, "Let us hand it all over to the bankers so that they can make a real deflation of it", is going exactly against the essential interests of the European Community.

We are not competitive in Europe partly because we are over-regulated. This is a treaty which will add to regulation. We are not competitive partly because our costs are too high. This is a treaty which, wherever it has an effect on industrial costs, has the effect of increasing them. There will as a result of this treaty inevitably be conflicts inside Europe. Again, I am not particularly thinking of conflicts which most directly affect us. We must take a European view. One conflict which is entirely obvious and will lead to confusion of policy and most bitter disputes is the conflict for power which arises between the proposed European central bank, let alone the proposed single currency, and the Bundesbank and the German mark. This conflict is bound to prevent that vigorous action to restore the prosperity of the European Community which is what is now most needed.

One should finally note that there will be a fatal lack of authority. We are proposing to transfer the responsibility for economic policy, the management of reserves, the management of a new currency and interest rates from democratically-elected governments to nominated persons with a fixed period in office. I do not see how those persons, good though they may be—and I make no criticism of people who have not yet been nominated and who will not be for a couple of years—can have the authority of governments freely elected by their people. Again, this is just as true of the other 11 countries in the European Community as it is of ourselves.

For reasons known best to themselves the Spanish people have just decided that they will go on with their Government despite 17 per cent. unemployment. That is their choice. But if the responsibility for the management of the European economy is taken away from the Spanish Government, along with the other governments, and put in the hands of these nominated persons is it really likely then that the Spaniards will be content to have 17 per cent. unemployment, perhaps almost into perpetuity? Will our people, will the German people, will any people be prepared to accept those levels of unemployment at the behest of a nominated central bank over which they, at any rate, have no control whatever and over which their governments have no control either?

Therefore, there is that great danger. It is a danger to the European Community. I would claim that it is the good Europeans who see that danger and warn against it. Those who have failed to understand the needs of Europe are refusing to face how great is the danger. Europe, the European Community, the whole system which has been constructed, with all its virtues and advantages, about which I feel as strongly as any Member of this House, will come to be seen not as an engine of prosperity but as an engine of deflation, unemployment, social damage, misery and suffering. But instead of being able to blame governments —and it is the proud benefit of democracy that governments are there to be criticised and attacked—and instead of being able to look to the Front Bench and hold it responsible, there will be people who cannot be held responsible but who will, none the less, be blamed by the people who are suffering. That could do untold damage to the Community, to the whole idea of Europe and to the unity of Europe. It could destroy what has been created so far.

That reflection applies also to the question of a referendum. My own belief for what it is worth—and who can forecast a referendum in advance?—is that if a referendum were put to this country, the Maastricht Treaty, rightly or wrongly, would be accepted. All the grave elders would say to the people of this country that they should accept it. If the noble Lord, Lord Howe, and the noble Lord, Lord Jenkins of Hillhead, tell the country to do something, the odds are that the country will do it out of sheer respect.

Therefore I do not advocate a referendum because I believe that it would knock out Maastricht; I do not believe that it would. But it would achieve one objective. It would remove from the Front Bench both here and in another place the blame for accepting the treaty without asking the people. That is where the danger lies. It is that Maastricht will be ratified, and Europe will suffer as a result. If the people of this country turn round, look at their Government and say, "You did this to us and you would not allow us our opinion", not only that Government but the other Front Benches which have connived so skilfully in avoiding a referendum would not be forgiven.

11.19 p.m.

The Earl of Onslow

My Lords, I was always told that Balliol men were extremely clever and I believe, with respect, that we have had a demonstration of that. It is almost impossible to compete with that economic analysis which I see facing Europe.

During the Recess I crossed the Alps by the same paths as did Hannibal. I stood in front of the gates of the Florentine Baptistry and I marvelled at the tomb Donatello carved for Pope John XXIII, of whom the great and glorious Gibbon wrote: The more serious charges were suppressed. The vicar of Christ was only accused of murder, sodomy, piracy, incest, arson and rape". I came back through a country whose service stations are named after great Burgundy vintages. Would that the M.1 service stations were called Watney's Mild or possibly Ruddle's County as opposed to Toddington or Knutsford!

I passed through the valley of the Marne where Papa Joffre's calm and Franchait D'Esperit's taxis turned back von Kluck's Prussians, in the same place where Aetius won the last victory of the western Roman Empire and turned back Attila the Hun's barbarians 1,463 years before.

Europe's history, culture and art are contributions to the world in which we live which dwarf that of any other group or civilisation. I do not have to remind noble Lords that Europe is the birthplace of the world as we know it. The struggles for freedom—be they at Marathon, Waterloo or Verdun, and be they led by Miltiades, Marlborough, Foch or Dowding—have ensured an essentially Euro-centric view of the world.

I am a Euro-fanatic. How, with my love of history, could I fail to be? Europe has learnt the lessons of peace painfully. There will arise among us no more like Louis XIV —a Hitler with marvellously good tastes; a Napoleon—a Hitler with some taste; or, Hitler—a Hitler with absolutely no taste.

What sort of Europe do I, as a Euro-fanatic want? I want a Europe whose culture I can freely and liberally enjoy; for example, Michelangelo, Shakespeare, Donatello, Voltaire, Beethoven, Gibbon, Palladio, Hawksmoor, Giotto, the Acropolis, Cologne Cathedral, St. Peters, Chartres, St. James of Compostella, Paris, Florence, Rome, Bath—the list is totally and completely endless and it is also unrivalled. I wish to travel and trade unimpeded. The wine in France is cheaper than it is in England because the French authorities, very wisely, place much less value added tax upon it. So, yesterday I bought a large amount of wine in a very nice French wine merchants, but then left my credit card there which was peculiarly stupid.

I wish to co-operate as closely as one can both militarily and financially—as only one can with great and good friends. Those in Europe are our great and good friends. I believe that General Morillon has an English chief of staff in Bosnia. What better co-operation than that could there be? We all have a shared interest in trade and the enrichment that it brings. There are of course exceptions; for example, the Polish EC trade treaty which bans anything which the Poles can produce, but which makes it very easy for us to buy things that they do not. But that is called protectionism and is a habit which should, if possible, be reduced.

I want to abolish the idiocies and the impoverishing factors of the common agricultural policy. For example, I am subsidised to grow less cereals; but I have a friend who lives in Cumberland who last year used to grow 15 acres of barley but who is now subsidised to grow 40. The countryside is massacred by transient set-aside, and world trade is distorted by Europe's stubborn stupidity over its agricultural dumping policies.

The Russian regeneration and the renewal of Odessa as a grain exporting port will soon put paid to that situation. Now it looks as if we are due to do something nearly as silly with this wretched treaty—a treaty which no British Minister, least of all a Conservative one, should have signed and one which proposes a European union whose meaning is obscure and financial arrangements the implementation of which every clerk in all central banks knows to be impossible.

The British Government say that the treaty is the red light to Euro-federalism. The Germans say that the light is green. It is reported that senior members of the Government are letting it be known that the treaty will not really happen in any event, and therefore we had better pass it. Indeed, my noble friend Lord Carrington said as much yesterday. That is rather like those regular soldiers who at the end of 1914 war said, "The war is over, now let's get back to serious soldiering".

The corpse of the treaty is rotten. We all know that. The Government know that it is rotten. But I suppose that it is, perhaps, not for us to reject it, much as I would like to do so. I do not like enacting waffle into law; but, I suppose, that in 20 years in your Lordships' House I have done my fair share of it. However, this waffle is particularly dangerous as it transfers to others constitutional powers, even though it is unclear which, or how much, will go to Brussels.

We sit in a House of Parliament which is 700 years old and whose existence predates diets and estates, let alone the assemblies of the Continent. However, the authority of your Lordships' House is possibly out of date in the modern politically correct view. We are here either because we were successful Cabinet Ministers and were given promotion or were sacked as Cabinet Ministers and moved up here as a reward. Some of our forebears slept with kings, some of our forebears won great victories or, as in my case, they merely got drunk with George IV.

We have but one duty, namely to refer back to the people this wretched treaty. If they say that they accept it, then your Lordships' House can end this century, in contrast to the way it began it, with a case of "Peers and the people" as opposed to "Peers versus the people". The people will perhaps reject the treaty and say, as did Pitt: England has saved herself by her exertions, and will, as I trust, save Europe by her example". Like the noble Lord, Lord Rees-Mogg, I am fanatically pro-European. That is why I do not like this treaty: it is a bad one.

11.25 p.m.

Lord Astor of Hever

My Lords, for much of its referendum campaign last year I was in France, a country I know well, having worked there for many years. I watched as the campaign very nearly turned into a vote of disapproval on the personality of Francois Mitterrand. French friends made no secret of the fact that they voted "No" simply in the hope that the president might resign. That is one of the main reasons I am so against a referendum.

I also believe that an issue as complicated as this should be the preserve of Parliament, and that it is for Parliament to consider it in detail. I do not believe that this House should be championing a referendum in defiance of another place.

Turning to the Bill itself, I am in favour of, and see no viable alternative to, our ratifying the Maastricht Treaty. To do so would be the most potent symbol of Britain's good intentions in Europe. We must continue to be at the heart of Europe, as a committed partner, and not the odd man out sniping and stagnating on the periphery.

Our membership of the single market has made Britain a magnet for investment, but we shall not remain a beach head for multinational companies if the treaty is not ratified. Delays are already casting doubt on our commitment to Europe and influence in Community decision-making. That worries potential US and Asian investors and is beginning to affect the confidence of British manufacturers, as the British Chamber of Commerce has warned the Prime Minister.

When the Bill is passed, as I hope it will be, I hope that full co-operation can be restored with other Community countries whose common interests we share.

11.28 p.m.

Lord Marlesford

My Lords, to those who are not in Parliament the process of ratification of the Maastricht Treaty through another place has, I suspect, appeared a somewhat undignified performance. Indeed, I spent some time on various occasions during the night watching that process. In many years of observing another place, I have never been so unimpressed. Nor I fear has it enhanced our reputation and influence with the rest of the Community. However, I believe that the standard of debate in your Lordships' House in the past two days has done a great deal to redress the balance.

I agree with the noble Baroness, Lady Blackstone, that Maastricht represents too important a development to be judged purely in terms of sympathy for, or antipathy to, the European ideal. Still less should it be debated in terms of such sentiments towards the Government and even less the leadership of the Conservative Party.

However, political attitudes do change, and change radically. Thirty years ago the Labour Party used to oppose Britain's membership of the European Community because it saw it as a barrier to socialism. Indeed, with his characteristic consistency—a rare thing in politics—Mr. Tony Benn still believes that. Only last week he published a new book on that thesis.

After the arrival of M. Delors as President of the European Commission in 1985, the Labour Party started to see Europe as a barrier to Thatcherism. The Maastricht social chapter epitomises that barrier. That is why we can all understand why Labour favour it and why most noble Lords on this side of the House oppose it. M. Delors began to accelerate the pace of change in Europe with a fervour which reminded me of a reincarnated Joan of Arc. His colleagues on the Commission appeared to have little power to moderate his timetable so that it should fit more closely with the domestic political realities in other member states. I believe that the Maastricht negotiations came at least two years too early. The single market had not even been implemented, let alone digested.

My noble friend Lady Thatcher has been a doughty and successful fighter for Britain's interests against an overweaning Brussels bureaucracy, in particular in such matters as the disproportionate budget contributions which we used to be required to pay. However, sadly—and I say it with esteem and regret—eventually her confrontational style became counter-productive in that it appeared to diminish rather than increase support for our position with our Community colleagues, most of whom kept their heads beneath the parapet even though she was fighting their battles as well as ours.

Our new Prime Minister had to change gear. I believe that he did so with great personal success in that he achieved an exceptional deal for Britain at Maastricht. That deal was endorsed by the British electorate in April 1992. Unfortunately, the ill-judged triumphalism of M. Delors damaged the support which the Maastricht agreement had had, and not only in Britain. Sadly to me, Sir Edward Heath added to the polarisation of the Conservative Party with his intemperate use of the word "hatred" for the Tory rebels in a BBC broadcast on 16th May. We really do have a big enough task influencing our European colleagues without unnecessary squabbling at home.

Our historic role has always been to influence the ever-changing pattern of Europe. In that, inevitably, we continue to threaten today as we have for some 600 years the hegemony which is sought by France. Things are made more difficult by the increasing use of the English language—itself a constant provocation to the French.

Perhaps I may make six small suggestions as to how we should capitalise on the advantages negotiated for us at Maastricht. First, on the important pillar of co-operation on foreign and security policy, we, together with the French, have the huge historical advantage of a permanent veto-wielding seat on the Security Council. Neither country should give that up and together I believe that we could be a decisive influence for world peace through the United Nations.

Secondly, on the EMU opt-out, let us not be wholly negative. I should like to see revived in a modest way the proposal of the government of my noble friend Lady Thatcher for a hard ecu as a common currency through the simple and unambitious step of arranging for the issue of ecu notes. For transactions over a certain value they could be made legal tender in all Community countries. Initially, they would be used by travellers, but they would be a practical reality and their convenience would be a demonstration of European co-operation rather as the blue channel at the customs epitomises the single market.

It is a modest proposal, but such a gradualist approach could be more acceptable to national electorates than the Bretton Woods resurgence which the noble Lord, Lord Eatwell, wanted. I remind him that the circumstances after the war in which Bretton Woods was arrived at were wholly different from today.

Thirdly, on subsidiarity, we have to give it meaning. I should like to see a juridical rule of proportionality which would enable Commission proposals for a regulation to be tested and, if necessary, challenged in the courts on the basis that the actuarial experience must show the need for the regulation concerned. That is a principle which could well be used for regulation by domestic governments. Many of the regulations to which people object most strongly, and which they ascribe to Europe, are regulations introduced by our own civil servants who, for this purpose, are all too often out of control of Ministers.

I am worried, as a member of your Lordships' Sub-committee D of the Agriculture Committee of the European Select Committee, that all too often the phrase "exclusive Community competence" is used as a substitute for challenge under the subsidiarity proposals of Maastricht and the Edinburgh declaration.

Fourthly, let us ensure that the Commission really does seek a level playing field. I give an example where it is still inclined not to. The original MacSharry proposals for CAP reform would have been grossly discriminating against British farmers. They owe a debt of gratitude to Mr John Gummer who successfully modified them to be non-discriminatory, although, as my noble friend Lord Carrington suggested, I rather doubt whether that particular form of CAP reform will produce the savings advocated for it.

Fifthly, if the Commission is to be more responsive, I believe that commissioners must take a higher national profile. M. Delors does so and always has done so. How many people, how many Members of your Lordships' House could name both the present British commissioners?

I know that the commissioners' oath includes the words "complete independence" and, neither seek nor take instructions from any government". However, it also talks of the, general interest of the communities". I believe that this must mean that commissioners should not leave it all to the Council of Ministers or to the permanent representatives in Brussels before they put forward proposals which are often antipathetic and antagonistic to the interests and the aspirations of the member countries.

Sixthly, the danger is that the social chapter gives people the illusion that they have the right to something for nothing. This used to be the British disease, which my noble friend Lady Thatcher did so much to treat. The Prime Minister has prevented its re-importation into Britain. Let me say straightaway that a number of German industrialists whom I know would much rather put up new plants in Czechoslovakia, Poland or Hungary than in East Germany where costs, partly because of the social chapter philosophy, are far too high in relation to productivity.

I do not agree with the noble Lord, Lord Desai, who is no longer in his place, that one cannot have a single market with different conditions for employees and workers. Of course one can. The obvious example is the United States of America.

In conclusion, let me suggest that there are two longer-term considerations—

Lord Bonham-Carter

Is the noble Lord seriously against legislation against child labour?

Lord Marlesford

I am sorry, I did not hear what the noble Lord said.

Lord Bonham-Carter

Is the noble Lord, in his attack on the social charter, seriously against legislation against child labour?

Lord Marlesford

Of course I am not. It was in fact the Conservative Party under Lord Shaftesbury which introduced most of the original legislation on child labour in this country. That is an absurd suggestion, as the noble Lord well knows.

There are two longer-term considerations. First, the real threat to economic sovereignty is the globalisation of manufacturing. I believe that within a decade at the most, as the noble Lord, Lord Rees-Mogg, said, the development of China as the manufacturer of a wide range of goods—probably mainly in partnership with international companies —will make much of the theory of comparative advantage irrelevant for Europe. The impact will be greater than that which the United States had after 1870, and greater than that which Japan had after 1960. At that stage there will be powerful and perhaps irresistible pressures for a Fortress Europe. I believe that we should think most seriously about that.

Secondly, after 40 years with one set of frontiers, the European kaleidoscope is once more on the move. I would not today predict whether the map of Europe will be recognisable by the end of this decade. Changes in frontiers are seldom achieved without war or the threat of war. In such a situation I want Britain to be able to exercise its historic influence from within the heart of Europe. That, as much as any other, is one of the reasons why I would like to see the Bill passed as soon as possible.

11.42 p.m.

Lord Hamilton of Dalzell

My Lords, I have listened for the last two days to a marvellous collection of speeches, not least the speech of the noble Lord, Lord Rees-Mogg. One thing strikes me forcefully. On this side of the House there is a measure of agreement, and I think it may extend to other parts of the House as well. We believe that the treaty is flawed. Where we differ is on what we should do about it.

The official position of the parties opposite is quite clear. The Labour Party is in the same position as the Irish and what I believe is known as the club mécliterrané. They want to go the whole hog because their paymasters in the unions look forward to more money for their members for a shorter working week under the social chapter. They also expect massive hand-outs from the central bank. The Liberal Democrats do not mind the loss of parliamentary sovereignty, possibly because they have never had it.

I belong to the school which is in opposition to this treaty, and which believes that one should not sign up on behalf of the British people for a treaty which concedes the power of Parliament to Europe. Others are in what I would describe as a defeatist mood; namely, that if it means accepting the unitary state we must swallow the package, and one can make up for it because we are seen as being the central feature in the European councils. Convergence, which is part of this treaty, will be very expensive. I remind those Members of this House who take that point of view that "he who pays the piper calls the tune".

There are others who say that the system will collapse in any case, and therefore what does it matter? My noble friend Lord Carrington said: In my judgment, much of what is contained in the treaty will not happen". In trying to bridge those conflicting views the Government appear to maintain that the treaty is what one wants to make of it. I can give a prime example of that. When my noble friend Lord Pearson of Rannoch called a short debate last February on the constitutional implications of the Maastricht Treaty, the late Lord Ridley of Liddesdale, whose presence is sadly missed in this debate, and I both drew attention to the loss of the executive power of government which arises from the obligation to join in an irrevocable fixing of exchange rates under Article 3a of the treaty. This subject was also raised in his maiden speech by my noble friend Lord Parkinson.

The arrangements for monetary policy comprise a large portion of the treaty. In my opinion they are the most important addition to the Treaty of Rome and the Single European Act. Contrary to the propaganda put out by the Government, they will have profound constitutional implications as well as economic ones. These will occur when exchange rates are fixed and not just at the time when we opt out of the single currency, if that is what we eventually do. In this, I appreciate that I am in conflict with the view of my noble and learned friend the Lord Chancellor who said, at the beginning of this debate today, that there were no constitutional implications in the treaty. However, it seems to me that a measure which gives away the executive powers of the Chancellor of the Exchequer and the Government to run the economy must have constitutional implications.

At the time of the short debate, my noble friend Lady Chalker made no attempt to answer that point. Perhaps she was referring to it when she said: We have gone a little wide, but no matter". Since then, because happily our experience with the ERM is becoming more widely understood to have been a foretaste of what the treaty will bring, Ministers and Government spokesmen are saying: "This part of the treaty is not on the agenda; we will join when the time is right again; it will not happen in this Parliament; it may not happen for 10 years." Who can guarantee a policy for 10 years when they may not be in power at that time? It may not be on the agenda, but it is in the treaty.

The fundamental question remains: if we do not intend to abide by the terms of the treaty, why are we signing it? Your Lordships' House is a revising Chamber. When we return in Committee to this point it will be possible to examine it in more detail. But even if your Lordships were to be persuaded that Article 3a should be amended, this Bill cannot be amended without destroying the treaty.

I have frequently heard it said from many quarters, in debates and not least from the Government, that the financial rewards, in particular from inward investment, are so great that we cannot afford not to sign the treaty. The European Monetary System is in such disarray that it will not survive. The new Chancellor of the Exchequer, whose executive powers are to be curtailed by the treaty, has boasted that the writing is irrelevant and he has not read it.

Are not many Members of this House and another place suffering today from having fallen for just such an argument in becoming members of Lloyd's? They ask: "What about this bit about unlimited liability?" and the answer is: "Don't worry, old boy, it will never happen." But it has happened and many are ruing it.

If we fail to pass this Bill intact, enabling the treaty to be ratified, there will be much talk about our constitutional position. If we allow it to go through, the British people will one day ask: Who was it who should have defended our constitutional right to have electoral control over those who manage the economy? And we, my Lords, will stand accused of having aided and abetted in selling the nation's birthright for a mess of pottage. Are we to be party to selling the constitutional rights of the British people for the chance of money? Should we not ask them first in a referendum?

11.50 p.m.

The Duke of Somerset

My Lords, the fact that this is a vitally important Bill to the future of this country is evident by the great interest that it has generated both in Parliament and outside. It will have an increased and profound effect on our constitution and lives. It is undeniably a centralising measure and a measure that will increase bureaucracy. There is a sop in some increased power for the European Parliament and the important establishment of limits on Commission competence. But suspicions still prevail. The unelected Commissioners and President, now with reinforced power, are supposed to act independently—as we have just heard from the noble Lord, Lord Marlesford. But they are supposed to act also in the interests of Europe as a whole. However, they are politicians; not civil servants.

What about the common defence policy? Most members have entrenched positions overseas, as we have in the Falkland Islands and Greece has in Macedonia. The noble Lord, Lord Carrington, eloquently described yesterday the shambles over policy in the former Yugoslavia. How can such a diverse body as the European Community ever be expected to have unanimity over foreign policy questions that directly impinge on a member nation? For instance, the problems in Serbia were largely exacerbated by German-led insistence on recognising Slovenia and Croatia prematurely. Selfish attitudes over GATT equally come to mind.

There are plenty of other worries in the treaty that have been aired by other noble Lords. Indeed, the Government are so worried by two proposals that they have secured opt-outs. It is that which gives rise to my greatest fears. I do not believe that I am the first in this debate to observe that perhaps the Government appear to be only half-hearted, on occasion, in support. After all, they spend a lot of time fighting off unwanted proposals like those on the social policy, customs controls or the CAP. They do not appear to have convinced the country at large, either by their past European policy or the future over Maastricht. If I may say so, their public relations have been appalling, as has their failure to explain the good points of the treaty, of which there are some.

My impression is that people are fed up with many aspects; for instance, the lack of transparency, especially in the Council of Ministers. That was supposed to be addressed in both Edinburgh and Birmingham, but little seems to have resulted. People are fed up with the string of regulations which they perceive to come from Brussels. The fact that most of the directives are expanded tenfold by government ministries once they arrive here only makes matters worse.

People realise that subsidiarity can be taken both ways; decentralising, but only for future legislation; or centralising, as Sir Leon Brittan said when he was talking of economic and monetary union, more effectively carried out at Community level than at national level". I am not against the European Community or Maastricht, despite reciting some of my worries. Indeed, the good points may well outweigh the bad. But I feel that we must carry the majority of the country with us for the future. We must explain the issues more effectively. We must define "subsidiarity" legally, so that the principle cannot be eroded away. We must allay the fear of the hidden agenda of federalism and the fear that we will be reduced to a powerless 15 per cent. minority under qualified majority voting, subject to an endless string of irritating and irrelevant directives. The only way of doing that is by holding a referendum. We have done it before, as in 1975, over important constitutional changes.

This treaty is taking previous ones a fundamental step further. None of the arguments that I have heard against a referendum is convincing, least of all that about the manifestos at the last election. There was nowhere else to turn to object. The Prime Minister is said to want to bring government closer to the people and the people want to vote. I disagree with the noble Baroness, Lady O'Cathain, who I see is no longer in her seat. She said that there should not be a referendum because people would not have read the treaty. People voted in the last general election, and in every other one, without reading party manifestos. I think that people want to understand, and a referendum will ensure that a proper discussion of the issues takes place without the threat of deselection.

I also feel that the unity of the Conservative Party is irrelevant. It is the unity of the country that is vital if we are to succeed in Europe. Therefore, let us hold a referendum and discuss the issues. If they are strong enough, vote for Maastricht so that we can influence Europe from the centre and perhaps interpret it with a more Latin outlook. In the event of a "No" vote and the treaty falling, we will renegotiate from a position of strength. Our net budgetary payments are absolutely vital to the Commission's funding, as is our market for imports and exports. Europe needs us. Let us convince the people to vote for Maastricht in a referendum so that the Government in their intention to steer us forward in the future of Europe have the maximum support from the country. There can then be no undercurrent of dissent festered by disenfranchisement. We can then work to correct the deficiencies in Maastricht that other noble Lords have outlined in the debate. They can perhaps be corrected by the next treaty.

11.57 p.m.

Earl Peel

My Lords, first I must apologise to the House and to my noble friends on the Front Bench for the fact that I was absent yesterday. I was detained by a long-standing engagement in the North of England.

We have witnessed some very great speeches from eminent politicians, economists, lawyers and other noble Lords who have great experience in these matters. I certainly do not pretend to have that experience. But I feel that I speak for a lot of people in this country who are very confused and worried about the treaty now before us.

I well remember the occasion in 1975 when I voted for the Treaty of Rome, not simply because of that momentous occasion, but it was the only time in my life that I had an opportunity to vote on something as important as that through the ballot box. I voted in favour. Basically I still hold the same view. But I am bound to say that to a degree I have become disillusioned by that decision as I have observed the concept of the single market, for what should be the opportunity for fair trade between member states, dissolve into a bureaucratic wrangle and what appears to be almost unobtainable idealism. Perhaps it was all too ambitious in the first place and the problem of overcoming the traditions and national interests of member states was always too great. Perhaps it was the case that common sense was overtaken by bureaucracy and red tape. But whatever the reasons, we are now being asked to extend it.

It seems to me that we want to walk before we can run; we want to rectify what is wrong already. I do so agree with my noble friend Lady Oppenheim-Barnes in what she said about putting things right before we go forward. What is frustrating is that I cannot help feeling that there are so many of our national leaders who find themselves being propelled along this conveyor belt of Europe. I think that they would love to jump off but they do not know how to; they do not know where we are going to go. I accept that this is a problem. As a nation—and not just this nation but all nations in Europe—we need to stop this relentless rush to Utopia and consider instead a vision of reality.

From my own experience, the world of agriculture and the environment appear to demonstrate only too clearly that, in order to try to harness a common approach while at the same time safeguarding the aspirations of member states, it has taken a huge increase in cost and interference to the point that the producer has become cynical and disenchanted. That is a bad thing, because if we cannot carry our manufacturers with us, I wonder what the future is really going to hold. There seems little common purpose as well judging by the French attitude towards the GATT round of talks. Noble Lords have mentioned how important it is to secure them for the sake of world trade.

What have we gained? Has British agriculture really benefited? Certainly, European agriculture has been supported on the back of the British taxpayer. Furthermore, we constantly see interference in environmental matters and land management, matters which I believe should be nothing to do with the Treaty of Rome and the Single European Act. The whole thing seems to have got out of kilter and out of proportion.

The other day, if I may recall one very small incident, I had a meeting with a MAFF officer, an ADAS officer and various other environmentalists. We were standing at 1,800 feet up in the Pennines and we were discussing—I cannot remember what. I asked the MAFF officer, "Why can't we do this?" His reply was, "We can't do anything at the moment. It depends on the Greeks". If we have got down to that, how is this whole business going to work?

We are told that such matters are to be resolved through the all-embracing panacea for all that is wrong and overbearing in the EEC—that great word "subsidiarity". But, as nobody has as yet devised a common interpretation of the word, I remain highly sceptical. I know that treaties allow us to opt in and that treaties allow us to opt out. But it is the small matters that actually affect the everyday lives of people in this country and Europe that matter. And that is where I think the thing is all going wrong.

I was very amused to read that President Delors has offered a prize to anyone who can come up with a definition of the word on a single piece of paper. But as we as yet do not know the size of the paper, or indeed what the prize is, I am not surprised that a definition has not been found. I was somewhat attracted by what my noble friend Lord Marlesford said. That was the nearest to what I would regard as being an acceptable interpretation of the word "subsidiarity". I am not surprised that M. Delors has failed to produce a coherent definition. Having read his definition of federalism, I have had it framed and have hung it up in the most appropriate part of my house. It reads as follows. Some noble Lords may remember it. It appeared in one of the national newspapers some time ago. This is how he described "federalism": A system of co-ordination of autonomous activity of a number of super-imposed entities. Those entities decide together to create a structure above them to which they delegate certain powers—but they get certain advantages and there are certain checks and balances". It has already been described as gobbledegook. I have to agree. Perhaps it all went wrong in the translation. I do not know but I have my doubts.

But we are told that federalism is not on the agenda. However, we see that the word "economic" has been removed in favour of "European Community" and a whole new raft of powers has been transferred, many through majority voting. It seems quite clear to me at any rate that the opportunity of implementing the concept of federalism, or at the very least sufficient powers seriously to undermine our own sovereignty, is clearly there in the treaty. I for one do not trust it. I simply cannot subscribe to the theory that simply because political union and other measures in this treaty are unlikely to happen we should ignore them for the greater good. That does not make sense to me. It is too high a risk.

How this country would fare outside Europe is a matter of conjecture. Many believe that without the ever-escalating constraints and the protectionist approach to the EC we would thrive. I know that the noble Lord, Lord Bruce of Donington, made that point in his very powerful and very amusing speech. However, the concept of a trading bloc with all participants playing the game fairly remains an attractive ideal to many of us. I have been surprised and amazed by the number of business people I have spoken to and the mail which I have received on the subject. So many small businesses are deeply worried about the ratification of this treaty. They feel that already they are suffering and are being consumed by the interfering and the costly regulations from Brussels.

There is one other point which I believe is of very great importance. It is that we have been warned, particularly by the noble Lord, Lord Healey, of the dangers of nationalism and of the threat to world peace. It seems to me that if we ride roughshod over national identity and the traditions of communities, we do so at our peril. I believe that breakdown will follow.

Of course I accept that the wider picture is important, but it is not everything. We must take heed of national accountability. There are too many examples in history where that has been ignored and great difficulties have followed as a result. It is this threat of further erosion of power to control our own affairs which really concerns people in this country. Many believe that the politicians are out of touch and indeed that we have gone too far already. For example, can anyone countenance the idea that in this country the civil servants take on the mantle of the European Commissioners and that Parliament becomes relegated to the role of the European Parliament? Some have suggested that that happens already, but that is not the case; it really is not. Yet we are happy to see that happening within the European Community.

The simple fact is that we are now being asked to extend the powers of the unelected Commissioners, the European Parliament and, of course, the European Court. How busy they are likely to be! What uncertainty and confusion that is going to lead to.

Finally, I believe that the precedent of a referendum has already been firmly established in 1975. Other countries have been allowed to have the opportunity of a referendum, why not this country? Furthermore, there are a great number of the electorate who did not have the vote in 1975. In my view they should now be allowed to judge. They have the luxury of being able to judge from experience which those of us who voted in 1975 certainly did not have.

We are told that it would be too complicated for the electorate to appreciate the implications of this treaty.

It will certainly give an opportunity for the politicians to describe and explain once and for all what we are actually going to be involved with. I am against referenda in principle, as other noble Lords have said. But the constitutional magnitude facing us is now bigger than Parliament, for it could actually undermine Parliament itself. It is for this reason that I believe that this House has a duty to give the people of this country the opportunity to express their views through a referendum.

I finish with one hope: that this House avoids the temptation of debating and digesting a massive string of amendments as seen in another place. I believe that a few key amendments really should suffice for I fear that anything more would cause unwarranted delays—and whatever the decisions, we should accept the outcome with dignity.

12.10 a.m.

Lord Moyne

My Lords, much has been said in this fascinating and wide-ranging debate about the question of a referendum, but that has been one of the subjects which has been least well debated. My noble friend the Lord Privy Seal said that referenda had no place in our system of parliamentary democracy, and the noble Earl, Lord Peel, has just said the same thing. Although he actually wants one, he thinks that it should be very exceptional. My noble friend the Lord Privy Seal must suffer from amnesia, as my noble friend Lord Blake and others were too polite to say when they listed the four referenda that have taken place: in Northern Ireland in 1973, in the UK in 1975 on the EEC; and in Wales and Scotland in 1979 on devolution.

Referenda are perfectly proper. France, Ireland, Denmark, Switzerland—democratic countries all—go in for them. The prejudice against them is sometimes expressed in grotesque terms. The noble Lord, Lord Jenkins of Hillhead, quoted Lord Attlee as saying that they were instruments of Nazism. Yes, Hitler did use referenda, but he also had a Parliament of sorts, did he not? So are Parliaments also the instruments of Nazism?

Parliament is not an end in itself. It is a means to an end. It is a means to express the popular will and, like all means, it is not always efficient at that and sometimes a referendum can help. The question is: is the Treaty of Maastricht a suitable subject for a referendum? I think that it is not, despite the eloquent and knowledgeable speech of my noble friend Lord Blake.

There was a referendum on this subject in France, but it got notoriously mixed up with President Mitterrand's unpopularity. Here, too, it would be tangled up with the discontent felt by voters on completely different issues. A referendum should be simple. It should be a "Yes/No" affair. It should be "One/Zero". It should be binary. In a complex document like Maastricht, there are far too many opportunities for obfuscation, opportunities which would undoubtedly be taken on both sides.

Maastricht itself is only another step logically entailed in our entering the market. And we have had a referendum—have we not?—on the market. That referendum was one of the undoubted achievements of the noble Lord, Lord Wilson, as Prime Minister. I believe also that the noble Lord, Lord Jenkins of Hillhead, was extremely ill-advised to resign on exactly that issue because it was that referendum—quite contrary to what a lot of people thought at the time—which legitimated our entry into the Common Market and stopped once and for all the argument of the anti-marketeers that we should get out. It was absolutely decisive. It was 2:1 in favour, and whatever anybody says about the legitimacy of the parliamentary decision, it overrode everything parliamentary. It finally legitimised entry into the market in the public mind for better or worse—I think for better.

Naturally, the anti-marketeers as people are still there, but all they now do is seek to stop Maastricht, not to get us out of the EC. What if they got their referendum, and what if they won it? We, Britain, would remain neither in nor out, twisting in the wind, without influence, without respect, without honour and without effectiveness. Listen rather to my noble friend Lord Bethell on the future development of the European Parliament which has been, as he rightly said, sadly neglected; listen rather to my noble friend Lord Skidelsky on the articulation of a new and generous vision of the wider European whole. Look forward, my Lords, not backwards.

12.15 a.m.

Earl Russell

My Lords, I rise to address the Windmill Theatre. I shall not delude myself, though, that my performance will be anything like as interesting as some of those that took place there.

Last August, in common with a good many of your Lordships, I passed through Gatwick Airport. I passed the time, as I regularly do, by looking to see the delays and cancellations. Most unusually, there was one only. The flight to Maastricht was delayed. Your Lordships may imagine that I looked with some interest to see what was going to happen to it. I am happy to report that an hour and a half later it took off and it landed without further event.

I support our membership of the European Community. I support this treaty. I support this Bill. To me, those three things are inseparable for the very simple reason that I do not believe that one can belong to a club on rules which are not acceptable to the other members. A great many people have talked, today and yesterday, about a different sort of Europe. None of us has been given any reason to believe that there is a different sort of Europe on offer. Those are the terms upon which our present Community partners wish to associate. It seems to me that we can take it or leave it. I do not understand how we can reject the Maastricht Treaty and remain a member of the European Community. I do not believe that we can claim to be the only country whose captain has a right to handle the ball.

In that context, we may well have to think again about our opt-out from the social chapter. If the doctrine of the level playing field means anything at all, one country taking a large competitive advantage from which the Community rules debar the other 11 is not cricket. If those DTI advertisements in Germany, saying how much cheaper it is here, mean anything at all they mean that this country is claiming a competitive advantage which is contrary to the rules of the club. In any club, people tend to take a rather dim view of that behaviour.

I happen to agree with the noble Lord, Lord Cockfield, that the importance of the Maastricht Treaty itself, taken in isolation, has been greatly exaggerrated. In that context, the interesting question is: what is all the fuss about? We seem here to have a case where the mouse laboured and brought forth a mountain. Why is that? Thinking about it, two quotations have been running through my head. One is from my noble friend Lord Rodgers of Quarry Bank, earlier this afternoon, that at heart this debate is about whether we should be in Europe at all. The other is from Herr Klepsch interviewed on "Newsnight" while the Maastricht Treaty was being negotiated. He has since become President of the European Parliament. He said: You British don't seem to realise what you signed up to in 1972". Everything I have heard in this debate has confirmed to me that that judgment was right, for I think that the heart of the debate has been about the issue of sovereignty. Coming from noble Lords such as the noble Lord, Lord Stoddart of Swindon, who is, I understand, opposed to membership, and has always been opposed to membership, I respect that view. From those who supported the European Communities Act 1972, I find it a little more curious.

The noble and learned Lord, Lord Wilberforce, yesterday made it clear that it was plain from 1972 onwards that in a case where there was a clash Community law took priority. Section 2(4) of the European Communities Act 1972 provides that: any enactment passed or to be passed … shall be construed and have effect subject to the foregoing provisions of this section". The sovereignty of our Parliament rests in its ability to repeal the European Communities Act 1972, which is still in force. But that is a nuclear deterrent, and nuclear deterrents derive their effectiveness from not being used. Until that nuclear deterrent is exercised it is clear enough that European law takes priority.

Yesterday the noble Baroness, Lady Thatcher, made some comments on the Factortame case which I thought sat a little uneasily with her praise for the rule of law. She might consider a remark in that case of the noble and learned Lord, Lord Bridge of Harwich, speaking in the Appellate Committee of this House: Any sacrifice of sovereignty by Parliament was entirely voluntary". It is the past tense which is important there.

I appreciate what the noble and learned Lord, Lord Howe of Aberavon, once said, that sovereignty is not like virginity; either you have it or you do not. But when I find someone 20 years after marriage screaming that they are about to lose his or her virginity I see a need for a little sex education. To that I hope this debate has contributed.

Because the basic point of the sovereignty issue was settled in 1972 and confirmed by referendum in 1975 I think it would be entirely misplaced to have a referendum now. Those who are asking for the referendum, if they fought for it and won it, would not get what they are asking for. They would not get the undiluted sovereignty of the British Parliament. If they want that they must repeal the European Communities Act 1972. If they want a referendum on that that would be a real argument. I would concede it with very great reluctance, but were the country to be passionately divided on that issue I might have to accept it. As it is, having a referendum on Maastricht in order to settle a question which does not even depend on Maastricht would be a great mistake.

We have of course been here before. We live in a multi-national superstate. Its name is Britain. Contrary to what the noble Lord, Lord Monson, said, Britain has not been a state for 2,000 years; Britain has been a state since 1707. From 1603 to 1707 it was a union of sovereign states under a common authority. In fact, it was exactly the pattern that we have now in the European Community. And the English, then as now, made remarkably heavy weather of it. They argued that a kingdom is indivisible and may not contain within itself several kingdoms. Exactly the same confusion is causing the trouble now. Of the union Bill in 1607 it was reported: I think they think the word 'union' a spirit for they start at the very mention of it". Anyone who has listened to the debate will recognise that phrase. It seems to me that that illustrates some limitation in the English intellectual tradition.

I listened to the noble Lord, Lord Beloff, on the citizenship clause. He may appreciate that all the same disasters were forecast when the English were told that they had to accept the existence of a British citizenship. We were told that that would lead to the disappearance of Magna Charta; it has not.

I make one final point. In 1604 Sir Edwin Sandys, the Bill Cash of his day, said that the Parliament of England could not agree to the existence of a state of Britain without a new commission from the people. Had his view prevailed, either in 1604 or in 1707, the noble Baroness, Lady Thatcher, would have had no British sovereignty to defend. I am glad that she has.

12.25 a.m.

Lord Cochrane of Cults

My Lords, we are well into the thirteenth hour of this debate and the average speech has been 13 minutes. Unlike some previous speakers who have said that they would be brief, I hope that I actually shall be.

In this Bill we have a great vision of trade, prosperity and peace, that being derived from the vision of the original common market and its predecessors. This Bill gives us almost a blank cheque to steer the European Community in any direction within our power. It is to be hoped that our leaders will use that power wisely.

There are contained within the Bill or, rather, within the European Community, three matters of grave concern. The first is the European monetary system which has shown repeated and alarming symptoms of instability whereby it has become impossible for several countries to stay within it. Others have done so only with the greatest difficulty. 'That needs to be attended to in the interests of promoting trade on reasonable terms of mutual respect among all the member states of the Community.

This includes a proper understanding of subsidiarity. It has been rightly said that that has been abused by the Community. It is right to say also that it has been abused by our own civil servants by a process which I understand is called in the trade "gold plating"; that is, you write the regulations so that everything which could possibly happen is covered. Of course you end up as in the traditional will that everything that you thought was going to happen did not do so.

As my noble friend Lady Thatcher said, we are perhaps inexorably on a train towards federalism or union. It is up to our politicians and leaders to put the brakes on it to the extent to which it is in our national interest to do so. A greater degree of centralism may provide the opportunity for a referendum. At present, so far as we seem to be going now, the opportunity for a referendum has slipped by and there is no need to revive it.

Finally, perhaps I may diffidently offer from this Bench to the Front Bench a few words of advice which date from a long time ago. My grandmother was a niece of Mr. Gladstone. She had numerous grandchildren of whom I am one of the younger ones. She used to say, and I am sure that she got it from the great man, "Make haste slowly".

12.29 a.m.

Lord Braybrooke

My Lords, it is always a pleasure to address your Lordships, particularly on the occasion of such a memorable debate as this. In your Lordships' House we have friendships across parties.

Under Maastricht, I believe that we would not be masters of our own destiny. A joint military union would be useless with countries that have never stood and fought. There could often be a problem with language as regards British troops not being under British command. Perhaps noble Lords will forgive me a personal reflection. About 43 years ago, I had to pass an exam in Swahili in order to go and fight in Malaya with the King's African Rifles. We got on quite nicely; but the fact that I could talk to them was a help. I suggest that the argument for political union is bucking the trend so far as concerns the rest of the world. The logical or what may be the fantasia, conclusion of the Maastricht theme would be to have one currency throughout the entire world and one union of all countries, many of which would probably still be at each other's throats.

We espouse democracy in this country and are proud that we have the mother of Parliaments. We cannot deny the people an opportunity to make their opinions known on such an important issue. In fact, we are really left with no option, although it may prove to be an untidy operation. A referendum would be the natural extension of the 1975 referendum on the European Economic Community. I stress the word "economic". The goal posts have been moved by the politicians many times since then. Do we regard the electors of this country as so immature that we assume them to be incapable of deciding this important issue? History suggests that the British people have innate good sense. They generally get things right.

I suggest that it is natural for mainland Europe to seek solace in numbers when they were defeated by evil forces in 1940. The same does not apply to Great Britain. We stood alone then and, in my view, it is utter nonsense to say that we would be isolated if we did not join a political and monetary union or federation with Europe. Of course we shall always trade with Europe and, it is to be hoped, also with other countries. The only way to trade successfully with countries is to produce goods that people want at the right price. If you can do that, you can trade worldwide. If we have to trade in the future a little beyond Europe, might it not be a good idea for us to build ships and aeroplanes again?

I believe that the danger of Maastricht—and I am no economist—is that if we are coming out of recession and Europe is still in deep recession, we could be dragged down with them. Who is to say that we shall be better off submerged in a vast totalitarian nation, reminiscent of the latter-day Soviet Union?

I suggest that failure to grant a referendum, especially in Scotland, might well cause considerable strains on the union between Scotland and England. Democracy and the nation state are indivisible. You cannot force people to like each other by passing laws. In suggesting a referendum, your Lordships' House would be acting as a defender of the constitution. Peers must be in favour of the people, and rightly so. Indeed, a referendum may well save the Government and bring unity in the country. At present, we have a divided nation and divided parties.

Maastricht is a movement away from democratic government, led by a vast bureaucratic machine not accountable to our Parliament. It is the thin end of a very thick, self-perpetuating wedge. In the context of Maastricht, I suggest that sovereignty can mean two things: first, it can be the independence and freedom of action of the United Kingdom as a state in international law; and, secondly, the sovereignty of Parliament in the sense of Parliament's power to pass legislation on any subject which it chooses, that legislation automatically taking effect in the courts of the United Kingdom. Those two concepts of sovereignty are not one and the same.

So far as concerns the first concept of sovereignty, every time the United Kingdom concludes a treaty of any kind it limits its freedom of action, in the same way as any individual limits his freedom of action by making a contract. The provisions of the Maastricht Treaty relating to such matters as common foreign and security policy may at present appear rather mild, but I suggest that those common foreign policy provisions will prove to be thoroughly ineffectual, as the crisis in the former Yugoslavia has shown.

As regards the sovereignty of Parliament, the Maastricht Treaty clearly imposes limitations thereon. However, I am advised that a majority of constitutional lawyers take the view that Parliament could always, if it chose to do so, pass legislation removing the United Kingdom from the European Communities and from a new European federation or union created by Maastricht. In that sense at least the sovereignty of Parliament remains undiminished, but in practice would that be likely to happen?

My understanding of the constitutional position is that in the United Kingdom sovereignty resides in the Queen in Parliament—that is to say in the institution created by Queen, Lords and Commons. Of course, it may be added that as a political principle ultimate sovereignty resides in the people, either on their own or in union with the monarch.

There are, however, respectable precedents for holding a referendum. Although there is no requirement to hold a referendum in United Kingdom law, a referendum was held in 1975 to improve the renegotiated terms for Britain to remain in the European Economic Community.

I suggest that we are at a watershed. In many ways, those of us who remember 1940 regard the treaty as being as serious as that situation. Noble Lords will have read of recent proposals to hold a European summit to discuss further European federalisation. That confirms my earlier fears and firmly underlines the vital need for a referendum. We must not be traitors to future generations.

12.32 a.m.

Lord Slynn of Hadley

My Lords, the noble Lord, Lord Ewing, said that he hoped that it would be possible to say something new but that he feared that it would not. Forty-three speeches and seven hours later one faces an even more difficult task.

Your Lordships have had the advantage of hearing eminent former members of the European Commission and of the European Parliament. It was suggested to me that even at a late hour it was appropriate that the still, small voice of the European Court of Justice might be heard. It is a court which is apparently regarded by one or two of your Lordships as sinister, crusading and ceaselessly imperialist. That fear of the European Court of Justice is not shared either by Her Majesty's judges in this country or by the barristers and solicitors who have grappled in an admirable way with the task of applying together the system of Community law and national law. I had not realised that for one or two of your Lordships in particular the European Court of Justice was the big, bad wolf of Europe which, if it sought to come into this country, should be put in a very restrictive form of quarantine.

Some telling points have been made by those who oppose the Bill, and your Lordships have heard views from the financial, the economic and the political point of view. I speak only as a lawyer. I have the feeling that although many of the points were tellingly made, on analysis those points were more relevant to the question of whether we should be in the Community at all than whether the Maastricht Treaty should be ratified. There were some notable exceptions to that.

However, on the basis that we signed the Treaty of Maastricht, and on the basis that we signed, it seems with some enthusiasm, the Single European Act, it seems to me as a lawyer that there are two questions that one should ask oneself before taking a decision. The first is what the noble Lord, Lord Carrington, would call the conceptual question. Does the Treaty of Maastricht depart so radically from what we agreed to before that we should not go along with it? If it does not so depart, the second is what the noble Lord, Lord Carrington, would call the pragmatic question. Is the agreement reached at Maastricht so defective that we should reject it? Alternatively, is it an agreement which on balance is good for the United Kingdom and for the Community?

With regard to the first question, I am not persuaded that the essential aim of Maastricht is beyond the contemplation of what was agreed before. On the contrary, if your Lordships look at the preamble to the Treaty of Rome, member states were determined to lay the foundations of an ever closer union among the peoples of Europe. If your Lordships consider the Single European Act, the member states recited that they were moved by the will to continue the work undertaken on the basis of the treaties and to transform relations, as a whole among their states into a European Union in accordance with the solemn declaration of Stuttgart". Of course, the Treaty of Maastricht goes further than the other two. If it did not there would have been no point in much of the negotiations. But it seems to me clear as a lawyer that it does not set off in a different direction from that envisaged earlier. Your Lordships have had read extracts from the recitals to the draft agreement. It seems to me that the proposed Union is not a new, mighty political structure. It is a framework within which activities under the three pillars will be pursued by a common set of institutions with different functions and different powers depending on the matters involved. I do not see that as a greater inroad into the sovereignty of the United Kingdom than has already been accepted.

If that is right, one turns to the pragmatic question. Is this a document that will be effective? There seems to be an assumption in some of what one has read and heard in another place, and perhaps even in your Lordships' House, that Maastricht is good for everyone else but not good for us; that it is loved by everyone else and is not loved by us. I doubt whether anyone is totally satisfied with the Maastricht agreement. I am sure that on the Continent people did not like it because we had the opt-outs. We probably do not like it for a variety of reasons, not least because it is a very complicated document.

I speak as one wholly outside the political world, necessarily rather than voluntarily. It seems to me as such an outsider that it is a remarkable achievement of compromise. The other member states have accepted that we should have the social chapter out; that we should make reservations about economic and monetary union. They accepted that because they wanted us in the Treaty of Maastricht and in the Community. In return we had to accept certain checks and balances.

I ask myself this question. What are the main features of Maastricht which seem to me as a lawyer to be important? The first is that I consider that it is good that the European Council and European political co-operation which have existed up to now should be transformed into a more effective form of inter-governmental co-operation. So far as concerns foreign affairs and defence, that can be only for the good with the European Council—that is, the member states themselves—laying down guidelines and the Council of the Union deciding on action unanimously.

So far as justice and home affairs, the other pillar, are concerned, it seems to me that the arguments in favour of bringing them within the Community are stronger. I agree with what was said by the noble Lord, Lord Plumb, about the possibility of some of those matters coming into the Community pillar. My hunch is that with time we shall all recognise that some things within this pillar, within this bracket, can be better administered by the Community. But for the time being, it is a great improvement that these matters will be dealt with in a more open way and with more accountability, subject, as the noble Lord, Lord Boston of Faversham, said, to proper scrutiny by the Parliament. It is significant that under this pillar, in relation to home affairs and justice, the initiative does not rest with the Commission, but with the member states and the Council. That may, in time, with experience, have a very important effect.

Secondly, it seems to me that the introduction of the notion of subsidiarity is important. It was in the Single European Act in relation to the environment and it has been shown to be workable there. "Who is afraid of subsidiarity?" is the title of a recent article. It has been described as gobbledegook. I do not believe it is gobbledegook, I believe that it will be possible to work out, on a case by case basis, what matters fall for the Community to deal with and what matters fall for the member states to deal with. What is important is that this distinction has been fully recognised. The Edinburgh Council has already said that national powers are the rule and the Community's the exception. It is only where it is necessary for the purposes of the treaty that the Community will be able to act.

I see this largely as a political question. I do not believe that decisions as to what should go to the member states and what should go to the Community will be taken by the European Court. They will be taken by the Council, subject in extreme cases to review by the Court of Justice and perhaps a further refinement of the definition.

Thirdly, it seems to me that the increased role of the Parliament, with new procedures, will have an important influence on the final shape of legislation. No legislation can go through without a positive decision of the Council of Ministers. So, through the Council, the member states retain control.

Finally, it seems to me that the better, more precise definition of the competences of the institutions is important. It will be much clearer under the Maastricht Treaty as to what the Commission can do in relation to the environment, to heritage, to transport and to matters of that kind. I believe that that is an important feature. On balance, it seems to me that the constitutional and the legal arguments are in favour of ratification of the treaty.

The noble Baroness, Lady Thatcher, was highly critical of the Court of Justice and perhaps at the time it sounded quite the fiercest part of her speech. I was not surprised that she was critical of the Court of Justice because she has told me of her criticisms before and she will not be surprised if I comment, however unfiercely, in reply to them. There are four comments which I should like to pick up. The first is that the court draws upon the objective of European integration to inform its rulings. Of course it does. If noble Lords look at the preamble to the Treaty of Rome and the first five articles of the treaty, they will see that that is the court's task and that it would be failing in its duty if it did not have regard to those matters. If we did not like that, we should not have accepted the treaty in the first place. I reject entirely any suggestion that the court acts improperly and outwith its jurisdiction.

It is said that by a strange device—and I quote accurately from Hansard—an Act of the United Kingdom Parliament was over-ridden by Community law. As the noble Earl, Lord Russell, has just said, it was accepted in the European Communities Act that that could be done and it was accepted by the noble and learned Lord, Lord Bridge, in his speech in the Factortame case in the House of Lords.

I recall this evening—I hope correctly—a passage that I read in Hansard of the other place some years ago. Mr. Enoch Powell asked the Prime Minister why, in effect, European law was going to over-rule some aspect of English law. Her reply was, if I may say so with respect, wholly accurate and wholly in accordance with the law. It was that that had been decided by the European Communities Act. I entirely agree.

It is said that the court's decisions undermine the basis on which we require people to obey the law. I regret to say that I do not follow that. The court enforces the treaty and the Council's regulations, and people must obey what it does. We may not like its decisions when they affect us, but it is frankly impossible to say that the rule of law is in some way being undermined by the enforcement of those decisions. Countless times the court has condemned other member states for being in breach of the treaty —Italy and Belgium innumerable times, and other countries as well. That and the many times that acts of the Commission and the Council have been set aside as being contrary to the law should, I would have thought, have called for the approval of the noble Baroness, Lady Thatcher.

Finally, the criticism is put forward that only three out of 13 judges of the European Court have judicial experience in their own countries. Here, it is said, we are used to having "proper judges", and "perhaps that explains a lot". I agree entirely with the noble Baroness that it is good to have some experienced judges. But the treaty clearly envisages that jurists who have not had judicial experience but who are of recognised competence will be appointed. It must be faced that many persons who are not judges in their own country applying their own domestic law have more knowledge of Community law than the judges in the ordinary courts. Their approach may be different. But in the context of Community law it is quite unjustified to imply that they are not proper judges.

Perhaps we should be a little careful in what we say about other countries. Of the two judges and one advocate general that we have at the moment at Luxembourg, unless I am mistaken, not one has had judicial experience in his own country. Yet they are eminently qualified to do what they are doing and highly successful in the way they do it. I wholly support their appointment in each case. It would be wrong to say that because they and others do not have national judicial experience, therefore they cannot perform the task.

There are other matters upon which I could comment, but I shall not. Perhaps at the end of the day, what has happened can be seen as a side attack on earlier treaties which gave those duties to the European Court of Justice. But for the reasons that I have given I believe that the treaty should be ratified. I have the impression as one who is outside the political arena that the Prime Minister and the Foreign Secretary have achieved as much as they possibly could of what they saw as their objectives. I believe that the sooner we get on with it now the better.

I believe that the noble and learned Lord, Lord Simon of Glaisdale, under-estimated the complexity of a referendum. He thought that there would have to be five questions. If one is really to put the issues within Maastricht to the people there cannot be less than 25 questions.

12.55 a.m.

Lord Hacking

My Lords, in the days when I played cricket I was not very good. So it was my lot to find my position in the batting order down at the bottom. But never in my cricketing days —nor, I would add, in my days in your Lordships' House—have I found myself a batsman or speaker at the 122nd position. The question therefore now that I have reached the crease is: what should I do?

I suppose that the answer, to begin with at any rate, is to stay there. I am to be followed by the steady hands of my noble friend of many years on the Cross-Benches, the noble Lord, Lord Butterfield. After that come the noble Lords, Lord Morris and Lord Tebbit. I feel that we will have a little slogging from those noble Lords. There may be one or two windows broken. Therefore it seems to me that there is a cricketing reason for me to remain at the crease. There is also a speaking reason for me to remain.

Your Lordships may think that in this long debate we have covered all that has to be covered. Well, I have to tell your Lordships there is a lot more to be covered! When I last examined the treaty in the English version, I found that it contained 306 pages. I recollect that this included 17 protocols and 33 declarations. When that treaty is coupled in, as it has to be, with the Treaty of Rome, there will be some 248 articles. During the course of our discussions thus far in this debate, I suppose that we have covered about half a dozen, or at most a dozen, of those articles. Therefore there is much more to be discussed.

But there is also a serious point arising out of that. I have felt disappointment as a supporter of the ratification of this treaty that there has not been more positive attention paid to the articles contained in the Maastricht Treaty. The point has been made by the noble Lord, Lord Dacre, that the supporters have spoken only in general terms about the treaty. It has been left to its opponents to start picking around among the articles. We should pay much more attention to Articles 8 to 8e concerning citizenship of the Union. Your Lordships made a very positive contribution to those articles in the treaty.

I sit on Sub-committee E under the good chairmanship of the noble and learned Lord, Lord Slynn. His predecessor was the noble and learned Lord, Lord Oliver, and during his chairmanship the sub-committee considered the question of the right of nationals of the Community to stand for and vote in local elections. Encouraged by the noble and learned Lord, Lord Oliver, I was invited to open a debate in your Lordships' House, when we strongly commended the adoption of those matters. Indeed, I was very heartened to hear from the noble and learned Lord the Lord Chancellor when he referred to those provisions —I quote from his opening speech in today's debate —as "an important extension to democracy".

There are other articles to which we could pay attention and identify their positive features. I refer to the industry article, Article 130. That new article formalises as a Community objective maintenance of the right conditions for the competitiveness of EC industry. There are also the environment articles, Articles 130r to 130t, which set out new objectives for Community environmental policy. Then there are the articles conferring increased powers on the European Parliament and the European Court, upon which the noble and learned Lord, Lord Slynn, has already addressed the House.

There is another lacuna. I do not address your Lordships even at this late hour to cover ground which has already been covered. That other lacuna concerns the alternative course of action of those who are not in favour of ratification. My noble friend Lord Pearson referred to the "solution" of the referendum. Presumably that means to reject the ratification of the Maastricht Treaty by means of the referendum.

Lord Pearson of Rannoch

My Lords, perhaps my noble friend will give way. Surely the result of a referendum would be something for the British people to decide.

Lord Hacking

My Lords, we should not be too naive about that. There seems to be a certain consistency in your Lordships' debate between those who oppose ratification and those who are asking for a referendum.

Lord Pearson of Rannoch

My Lords, is my noble friend admitting that he believes that the British people would reject the treaty?

Lord Hacking

My Lords, I am addressing your Lordships on the consistency of position of those who are opposed to ratification and who are asking for the referendum.

Lord Pearson of Rannoch

My Lords, quite so.

Lord Hacking

My Lords, if, therefore, the Maastricht Treaty is not ratified, what then? We are left with the Single European Act. That created certain improvements. It improved the decision-making procedures of the Commission, the Council and the other Community institutions. But it left a large area of non-accountability. That can hardly stand if the Maastricht Treaty is to fall. Then what is the position of the Treaty of Rome?

I move on to the speeches that have been made in your Lordships' House this evening. I have already referred to the work of one sub-committee of our Select Committee on the European Communities. This House has made a notable contribution towards the decision-making of the Commission and the Council of Ministers in the work of our Select Committee. I believe that this debate has also made a contribution. I refer not only to those who spoke so well in favour of ratification—my noble friend Lord Howe, the noble Lord, Lord Callaghan, and others —but I refer also to those speeches that were critical of the present institutions in Europe—my noble friend Lord Parkinson and the noble Lord, Lord Rees—Mogg. Those were all constructive contributions to the great debate about Europe. That has been one of the great values of this debate.

It is now for me to declare my own position; that is, to support the Government and to support ratification.

1.3 a.m.

Lord Butterfield

My Lords, I have been a little worried about the references to cricket and "late in the batting order", because you are looking at a man who managed to lose the Oxford and Cambridge cricket match for Oxford by trying to hit a six over the pavilion at Lord's in the last over. That was the end of the Oxford innings. It is a recurrent nightmare and I hope that I shall not have a nightmare after the short innings in which I am about to indulge.

The noble Lord, Lord Amery, in his wonderful maiden speech, included a reference to Sir Winston Churchill's interest in our becoming part of Europe. He made that point in terms of military, political and cultural affairs. I want briefly to raise a question of policy which may have some relevance to the problems of framing the 25 questions that may be needed for a referendum. I shall deal with that first.

I was intrigued to obtain from the Library a whole lot of research papers in relation to Maastricht. One of them concerned the Committee of the Regions, about which I have not heard much in my time in the Chamber on this question today. But it is a fact that there is to be established—I believe the German Lander pushed it—a Committee of the Regions, which will consist of around 150 people, each having an alternate. We can overcome the problem of Scotland, Wales and Northern Ireland quickly by saying that we shall have 24 members; Scotland will have two, Wales and Northern Ireland one each and 20 for the rest of the United Kingdom. That is about right on a population basis. It seems to me that if we are to have a referendum the importance of having another tier of European government will have to be built into the explanations that the population will need. I am not irrevocably opposed to a referendum. As someone who has tried to set examinations, I just think that it will be very difficult to frame the questions. Your Lordships will be aware that in the Explanatory Memorandum of the Bill, paragraph (f) requires the United Kingdom's representatives to the Committee of the Regions to be elected members of local authorities. A completely new group of people will be participating in European affairs. That will happen anyway so far as I can understand it.

I should like to make some points on the cultural side. It will not come as a surprise if I ask your Lordships to bear with me while I deal briefly with the question of the European Community and health matters. On 3rd June I was sent (at your expense) to Brussels to be your representative at a one-day public hearing of the European Parliament committee on environment, public health and consumer protection. It was conducted under the able chairmanship of a Scotsman, Ken Collins. I was present at the whole day's discussion on health policy after Maastricht. The papers with which I was provided reminded me that the treaty signed at Maastricht on 7th February 1992 set out a framework for co-operation and Community action. It was a good day that demonstrated splendid European collaboration. At one point someone said that we should all be very grateful to those countries that had delayed the passage and ratification of the Maastricht Treaty because it had given time to think of what we wanted to do when eventually ratification took place. It was nice to think that some Europeans were not quite as cross with us as I had expected them to be.

We discussed a number of things: demography; health needs; the problems of public health in Europe; preventive medicine and health care; social policy; and collaboration. In all those matters it is clear to me that we can—and, I trust, will—play an important role.

At the end of the day Commissioner Flynn, responsible for health policy in the Community, underlined the importance of a recent debate in the Council of Europe on future involvement in health policy covering, under Article 129 of the Maastricht Treaty, co-operation in health matters. He noted the importance to health arrangements in Europe of ageing population and made much of the need to prevent disease. He said that the challenge was to preserve a healthy population and tackle disease earlier, which is very close to the views of many of us in this country. Summing up, the chairman said that subsidiarity would be respected; in other words, those in Brussels and Members of the European Parliament would not try to take over the role of running national community health care services. But he knew that there was an urgent need for better statistics, which included agreement on better definitions.

I hope that your Lordships will be as pleased as I am to realise that there are difficulties between European countries in defining exactly what is a hospital bed. He also felt that best practices could be recognised and used in other countries and spoke of the possibility of the establishment of a remarkable organisation called the European Observatory for Health which like astronomers would be looking with telescopes from country to country. When the Scandinavians come in, there will be some interesting things to watch as far as health matters are concerned. It would be looking through its telescope from the observatory to find out what would be best practice.

These are all ideas very close to the Department of Health's concern with our nation's health. For example, on diabetes (a disease I have spent a lot of time working on in the past) the Government have invited targets for the prevention of diabetic blindness, diabetic amputations, kidney disease, uncomplicated pregnancies, and so on. I hope that this will be seen as part of the reflection of the cultural richness of Europe if I tell the House that since 1965 there has been a European Society for the Study of Diabetes. It meets in different European centres each year to discuss how to improve diagnosis, care and how to educate patients and avoid complications. There are now 4,000 members. More than half are from Community countries and 400 are from the UK. We all hope that we shall retain our full membership of the European Community. The House will sense that from these points of view I hope that the Bill will be ratified.

There is also a European Association for the Study of Obesity which was established in Stockholm in 1988—quite rightly, I suppose, because they are always so concerned about their menus there. Of the 347 professional members, 38–10 per cent. or so—are from this country. It meets annually, and there are important discussions about the complications and the diseases associated with obesity—high blood pressure, heart attacks, strokes, gout, osteoarthritis, and so on. I thought that I ought to give your Lordships the formula for the diagnosis of a fat person in terms of height and weight. But I have decided that since the height has to be in metres it would not be satisfactory to put that to the House at this time of night.

There are excellent working relations between those of us who work in these public health fields. From these, and from so many other European medical and nursing societies, all the evidence is in favour of our extending European collaboration in practice, in research and in thinking. It is very much my hope that there will not be any impediment as a result of the deliberations on the Bill to our continuing to be involved and taking our lead in these matters.

1.13 a.m.

Lord Morris

My Lords, I think I know what you are all waiting for, and waiting for with keen anticipation. That is for me to sit down! I have waited through some 24 hours of debate for this moment and I am very much afraid that I am going to have to be a little more patient myself because I too am looking forward immensely to hearing my noble friend Lord Tebbit. I shall tell the House why.

I have always believed that if there is such a thing as a political virtue—although I rather doubt it—it has to be courage. In one of the early European languages the words "virtue" and "courage" were indivisible. That is why I resent very strongly noble Lords who use the terms "Euro-sceptic" or, what is worse, "Euro-rebel" for those immensely brave people within and without Parliament who have the moral courage and the moral integrity to defend what they perceive as the national interest.

It is so true of my noble friend Lord Tebbit, not least of my noble friend Lady Thatcher and not least, if I may so call him, of my noble friend Lord Bruce of Donington. They know that this decision by Her Majesty's Government to sign this treaty has within it the seed of some very serious threat to the future of the United Kingdom.

Perhaps I may explain as quickly as I possibly can why I believe that. It has taken these 24 hours of debate for me to attempt, however inadequately, to sum up in my own words the fundamentals of Her Majesty's Government's case as to why they have suggested that the signing of this treaty should be ratified. I have listened with immense care to all those who support that position. Basically, what they are saying is this: it is essential that we agree now with those with whom we do not altogether agree because if we do not so agree, then we cannot possibly be in a position to persuade those, at some indeterminate future time, with whom we do not altogether agree, to agree with what we believed in in the first place. That is, with precision, what the case is.

For that to be a basis on which to sign a treaty fills me with total astonishment. What Her Majesty's Government have done in their determination to follow the ancient and well-renowned and only Foreign Office policy which I truly recognise since the time of the entente cordiale and which they have held with precision since that time, is that we must be nice to the French. In effect what they have done is to mortgage what little leverage we shall have in future negotiations, and that is our ability to say "no". That is where there is immense danger.

I wish to make just one other point. One of the points in this debate which has concerned me considerably is that not one speaker has recognised what precisely is going on in the world at the moment. Throughout the world —I include the United States of America and Canada —there are serious threats to the large unions; to the confederations in Canada and the United States of America which are not driven politically, but technologically. Why did the Union of the Soviet Socialist Republics break up? Why has there been a break-up throughout the world into smaller nation states? One of the major reasons for that is the industrial revolution which we are going through at the moment which is the revolution in telecommunication.

It is a strange irony. One would think that that would draw the world closer together, but it has the very reverse effect. In the hearts and minds of so many individuals in the world today there is a daily reminder of the fact that individually we are a very small cog in a very large world. That is why people are looking for smaller and, if one likes, tribal or national units. In other words, the concept of the nation state and of the state is changing. It is becoming smaller, not larger. What the middle-class intellectuals in Europe are suggesting that we do is to go in the very reverse direction and to form a larger political unit. That is flying against the tide of current history. I shall now sit down.

1.20 a.m.

Lord Tebbit

My Lords, we have had a feast of excellent speeches today. We have just heard put very briefly and in short terms by my noble friend Lord Morris one of the underlying reasons why this treaty will fail either before or after ratification. Small is beautiful. The big monstrous states and the great political organisations are breaking up before our eyes. The number of nation states has not been falling in the past 80 years; it has been steadily increasing. That is the long-term tendency of the age in which we live.

We have had an excellent debate today, the tone of which was set by a speech which was, of course, erudite and so well presented by my noble and learned friend the Lord Chancellor. It was followed by speeches, such as that most impressive maiden speech made by my noble friend Lord Amery, civilised and erudite as always. We heard an excellent speech from my noble friend Lord Vinson who was so clear about the need for democratic accountability—again, something which becomes more difficult as the unit becomes larger and the communities within it become more divergent.

We also heard a speech from the noble Lord, Lord Barnett, which was one of the most polished that I have heard in my life. The cynicism in it shone with the polish which he put upon it. He supported the treaty while debunking and demolishing the heart of the treaty, which is economic and monetary union. How it is possible both to debunk and support a treaty at the same time I do not know, but the noble Lord, Lord Barnett, is able to do so in the most enormously accomplished style.

The noble Lord, Lord Rees-Mogg, shared all my concerns about the effect of Maastricht on the European Community, a theme to which I shall return. My noble friend Lord Onslow, in splendid and brief style, defended the cultural and spiritual course of Europe.

Intriguingly, my noble friend Lord Astor of Hever thought that the treaty was too complex for the British to understand although, apparently, the Irish were able to do so. There were others who thought that it would be too difficult for us to frame a question for a referendum. It seems to me that that would be a perfectly simple matter so long as it was not entrusted to those officials at the Department for Education who have been framing the tests for 14 year-old school children. Well, it requires only the question: do you wish this treaty to be brought into effect or not? I should have thought that most people in this country could have understood that—and if they cannot, and if it is the view of your Lordships' House that the British people are not capable of taking such a decision, then it must be your view that they are not capable of electing a government in a democracy—

Lord Howie of Troon

My Lords, they may make mistakes when they do.

Lord Tebbit

My Lords, indeed, they may make errors, as the noble Lord says, but it is part of the democratic system that it is the people who make the errors and the people who live with the consequences of them.

My task this evening is a formidable one. It is to attempt to sum up on behalf of we who oppose this treaty on Europe, and to expose what I and my friends regard as the fatal flaws in that treaty, and, of course, in response to popular demand, voiced not least by the noble Lord, Lord Callaghan, to set out my, and, by implication, that of some of my friends, alternative to Maastricht.

I fear that even at this late hour I must also correct a misconception or two which have featured in this debate. I have been represented as anti-European, as have many of my friends. Let me remind the House that I favoured British participation in the development of the European Community from its earliest days. I, like some of those on the Liberal Benches, believed that the Treaty of Rome could and should have been the Treaty of London. I supported our entry into the Community in 1972; our entry into the Common Market. Ah, my Lords, what did happen to the Common Market? I wish that it had come into being. We should all be so much better off had it done so. I campaigned for a "yes" vote in the 1975 referendum campaign, secure that in the words of the noble Lord, Lord Wilson, in the document distributed to all households: Fact: No important new policy can be decided in Brussels or anywhere else without the consent of a British Minister answerable to a British Government and a British Parliament". Indeed, I was a European in the Cabinet when my noble friend Lord Cockfield was an advocate of the illegal act of repatriating the management of trade policy to the United Kingdom in defiance of the Treaty of Rome.

I later supported the Single European Act, an Act which I was told by my noble friend Lady Chalker did not affect the Luxembourg compromise. I recollect what she said on the matter as Mrs. Chalker in the other place on 23rd April, 1986—St. George's Day of all days, I regret to say—during the passage of the Single European Act: Several hon. Members were, not for the first time, excited because they believe that the Bill will remove the United Kingdom's power of veto… I am afraid that those opponents of the Bill are allowing themselves to be drawn into an unreal world".—[Official Report, Commons, 23/4/86; col. 389.] Perhaps when my noble friend Lady Chalker closes this debate she might tell us whether what she said then would remain true after the ratification of this treaty.

I do not in any way resile from the views which I expressed as an advocate of British membership of the Community, and my objective is the creation of a better Europe, not our withdrawal from the European Community. So, your Lordships will understand why I resent my views being so frequently, and so crudely, misrepresented by some enthusiasts for this treaty who, lacking argument to convince doubters of its merits, choose instead misrepresentation of the views of their opponents.

I shall do my best to avoid such political crudity. Indeed, with the delicacy of touch for which I have long been known, I shall refrain even from attributing to Ministers, other than my noble friend Lady Chalker, any belief in, or affection for, this wretched treaty unless they own up to it with rather more conviction than did my noble friend the Leader of the House when he opened the debate yesterday.

My objections to the treaty are threefold. First, that it is bad for this kingdom; secondly, that it is bad for the other 11 member states of the Community; and, thirdly, and perhaps most serious of all, that it is bad for all of Europe, because it is designed to construct an exclusive Europe, a Europe with an economic iron curtain, built upon the single currency, that would keep out the newly emerged and fragile democracies of Eastern Europe.

On the matter of single currencies, I hope that both I and the noble Baroness, Lady Blackstone, will be given answers to the questions which we raised. I, last night, and she today, asked whether my noble friend will tell us whether it is the Government's policy that there should be created a single currency, whether or not we are a participant, within the European Community. It is a question which I have asked frequently by Written Question and in other ways. I still have not had a reply.

The fact is that the Treaty of Rome, alongside NATO, was constructed to deal with the problems of the early post-war era. The Rome Treaty was part of the reconstruction of Europe—a reconstruction based above all on American money through Marshall aid —and that treaty was part of binding Germany into the democratic process. To laud it—as did the noble Earl, Lord Stockton, yesterday—as the institution which alone has preserved the peace in Europe is eccentric in its blindness to the role of NATO through which the United States, 49 years after her troops went ashore on D-Day, still maintains armed forces on German soil, not to mention the Yalta settlement which divided Germany for more than 40 years, with Russian forces in East Germany.

The challenge of the next 50 years is not to contain a threat that the German Panzers might roll again across Europe. That will simply not happen. Perhaps the BMWs and the Mercedes might, although that is becoming increasingly less likely as Germany encounters economic problems. The challenge—the risk—is that Europe will descend not so much into wars between nations, but into the economic and political collapse followed by civil disorders and civil war. The fate of the former Yugoslavia, and indeed the former Soviet Union, are already there to warn us.

The noble Lord, Lord Healey, spoke eloquently on that theme. But I would have to say to him, were he in his place, that the dealings which he described, the allegation that Britain's foreign policy on Yugoslavia was sold out in a dirty deal over the opt-out clauses of this treaty, if it were to be true, would not be an aberration of European politics. It is precisely the stuff of Euro-politics. And if the noble Lord, Lord Healey, does not like that kind of dirty dealing behind closed doors, his only option will be to leave the Community.

The question for us is: how can we best nourish the fragile democracies and the fragile economies of the former Soviet satellite states of central Europe and the Baltic, and indeed those which may emerge from the ruins of the former Soviet Union itself? In my view, we should be intent on the construction of a European Community for all Europeans; a Europe from the Atlantic to the Urals and from the Arctic Ocean to the Mediterranean. That Europe should be an open, free-trading Europe. Clearly, it could not be centrally governed in the Bonapartist style of Jacques Delors. Clearly it could not achieve the economic convergence across all its member states required for a single currency. Clearly it would be a multi-speed Europe, and it would not be any the worse a Europe for that.

That Europe should cease to pursue the self-defeating policies of protectionist greed such as the CAP, which so savagely damages the economies of less-developed states as well as raising the price of food to our own European people. It was in an exceptionally powerful maiden speech that my noble friend Lord Parkinson set out how the ERM and the single currency would prohibit the admission of poor countries. As I have said before, it might help if we knew whether or not Her Majesty's Government really favour such a single currency.

If we do not rapidly give the new democracies access to our markets and, beyond that, expedite their membership of the Community, we shall run an appalling risk that their economies and democracies will fail. And if they fail, the consequences for Europe would be appalling. A vast army first, of economic migrants, as we now call such people; and then in their wake refugees would begin a westward march —with its first destination Germany. Need more be said about the consequences for Germany and for all of us in Europe?

By then the ratchet of the single currency and the Social Chapter would be doing its work. It would act as a protective system, as a non-tariff barrier, on behalf of the richer countries against the poorer countries within the Community. So Greeks and Portuguese, their economies crippled, would be left pleading for more support through the cohesion fund, support which the German taxpayers would increasingly resent and then refuse, thus sparking not only virulent nationalism of the kind which the noble Lord, Lord Healey, and others blame for our earlier European wars but yet another tide of displaced people seeking a better life in another country—with Germany, yet again, the favoured destination.

Maastricht is not only no answer to the problems of this decade. It would be part of the problem of this decade and the next century.

Let us turn our thoughts back to this country. I agree with those who say that our opt-outs from the treaty are likely to be ineffective. If a single currency were to be created, I have no doubt that we should be dragged into it before it finally collapsed. Chancellor Kohl is right. Political and monetary union are inseparable. A currency cannot have more than one Chancellor of the Exchequer nor more than one central bank nor more than one economic policy.

Even apart from the ambitions set out in the treaty—ambitions to which not only this Government but any future government elected will be committed—the single currency would create the single Euro state. Again, I quote Chancellor Kohl: In Maastricht we laid the foundation stone for the completion of the European Union. The treaty about the European Union initiates a new decisive stage of the European unification, which will create in a few years that which the fathers of modern Europe dreamed of after the last war: the United States of Europe". That is a quote from Bulletin No. 38 published by the German Government on 8th April 1992.

Yesterday my noble friend Lady Thatcher listed the attributes of statehood to be possessed by the Union; foreign policy and defence policy, external boundaries, immigration and visa policies, a supreme court, a currency —economic policy—a citizenship.

As our American friends say, "If it looks like a duck, if it quacks like a duck and if it walks like a duck, it probably is a duck". If an organisation has all those attributes of statehood, then I beg your Lordships to believe that it probably is a state.

The Lord Chancellor said this morning that we would be locked into this new state—something like nothing which we have ever seen before. How I agree with him! It is something that I hope we will never see.

Let us not be deluded by the separate pillars of inter-governmental co-operation. Yes, foreign policy can only be made by unanimity; and it can only be unmade by unanimity. So if an outgoing government should reach a unanimous agreement with our partners, that policy could not be changed by an in-coming government, whatever their mandate from the electorate, except by unanimous agreement of our partners.

But where does that leave Parliament? It would be hound by the actions of its predecessors. Yet this morning my noble and learned friend the Lord Chancellor told us that there is no constitutional impact in the Bill. I hate to tangle with my noble and learned friend, but that sounds to me like a change in what I have always known as the constitutional principle that no Parliament can bind its successor.

I have to say that I found the remarks this morning of my noble and learned friend the Lord Chancellor difficult to follow at times. No doubt that was my fault rather than his. But on citizenship I began to feel that the concept was somewhat metaphysical. I cannot imagine how one could be a Belgian citizen if there was not a state of Belgium; nor can I imagine how I could be a European citizen of a European non-state. It does not make sense to me.

Moreover, to force on me, against my will, with no right of renunciation, a new additional citizenship is not, my noble and learned friend said, a constitutional innovation. If it is not, what is the precedent? If I understood my noble and learned friend correctly, it seems that it is not a constitutional issue because there are no duties (only privileges) attached to this citizenship. In short, it is a free-lunch citizenship. Your Lordships may recollect that "There ain't no free lunch". But in five years' time we may face a Bill imposing duties on citizens. Will we then be told that, since we are already citizens, merely to impose duties upon us is not a constitutional matter either? Therefore, in two non-constitutional steps we would have achieved a radical constitutional change.

However, I was encouraged as I heard my noble and learned friend the Lord Chancellor describing the doctrine of subsidiarity. It seemed to me that almost the whole of the social chapter would become unenforceable under that doctrine. But, of course, it does not apply to matters where there is Community exclusive competence. Last night my noble friend Lord Pearson asked what are those matters—but answer came there none. I shall give him the answer which was given to me in a Written Answer: The Community has exclusive competence where that is conferred upon it by treaty provision or measures taken under the treaty. It is not possible to draw up an exhaustive theoretical list". So we do not know what the matters are to which subsidiarity does not apply. Even worse, nor do Her Majesty's Ministers. They find it impossible to draw up a list. I do not know why it is called "a theoretical list". It sounds to me like a rather practical list, if it could be produced.

But more important was the overall message of my noble and learned friend the Lord Chancellor about the treaty. I hope I do not do him an injustice when I paraphrase it. He said that once we accepted the Treaty of Rome this kingdom entered on a slippery slope and that since then we have had no choice but to accept whatever our partners have pushed at us—and the slope gets steeper. As Maastricht is ratified, so we enter an even steeper slope and that is our ordained fate. Our ordained fate, listed in the treaty and enunciated by Chancellor Kohl, is to become a province of a federal Europe, just as Saxony is a province of a federal Germany.

For this Parliament to become a provincial assembly and our Chancellor to enjoy the powers and status of the treasurer of a rate-capped local authority is not acceptable to me. Future generations will not accept it, neither here nor on the Continent. That is why the people should be asked to give their consent to further steps towards the union state.

To say that it is impossible to say no to our partners without leaving the Community is nothing more than a mixture of deceit, distortion and the doctrine of appeasement. It is never right to sign up to that in which we do not believe in order to appease our partners any more than it would be right to do so in order to appease our enemies. Nor is it right to sign a treaty in the hope that it is impractical and that our partners will not invoke the provisions which we have entered into.

Of course the United Kingdom can say no. If we did, as the noble Lord, Lord Bruce of Donington, explained today, the European Community would go on in just the same way as it did yesterday. Who would have claimed that if France had voted no she would be thrown out of the Community? Who claims that if the German courts strike down the treaty Germany would be thrown out of the Community? Why that it is claimed that if Denmark or Britain should say no we would be thrown out of the Community? It is palpably untrue, unless we believe that our partners would deliberately break the Treaty of Rome. If we believe that of them, why should we enter into a new treaty with them?

This treaty will end in tears. It is better that it ends in tears now than that it ends in very bitter tears in five, or 10 or 15 years' time.

1.46 a.m.

Lord Bonham-Carter

My Lords, I listened, as I expected I would, with the greatest interest to the speech made by the noble Lord, Lord Tebbit.

When I saw that I was the 125th speaker in this marathon debate I expected simply to provide a soliloquy listened to by the 126th and 127th speakers, and I am surprised by the stamina of your Lordships in staying in such numbers for this debate on the second day until a quarter-to two in the morning. I am impressed, and somewhat abashed, by the number of people I am asked to address.

I wish that the extremely interesting remarks which the noble Lord has just uttered had been uttered earlier in the day so that other noble Lords than I, the noble Lord, Lord Peston, and the noble Baroness could have responded, since he has made a contribution which deserves wider consideration than I can offer at this hour of the night.

Before I turn my attention to those interesting remarks I must pay tribute to the two maiden speeches we heard in the debate. The first was that of the noble Lord, Lord Amery of Lustleigh, who, as we all expected, made a contribution which was both distinguished and memorable. We look forward to many others from him in due course. The second was that of the noble Earl, Lord Donoughmore, who made an interesting speech, which contained one point that struck me as surprising coming from an Irish Peer. He appeared to regard horse-trading in a pejorative sense.

We also heard a number of speeches of great distinction from other noble Lords, and in particular from my noble friend Lord Rodgers and the noble Lord, Lord Ewing of Kirkford. I should like to say how much I agree with the noble Lord that within the Community it is essential that we should be members of the management team. We heard from the noble Lord, Lord Sanderson, on the CAP, and from the noble Lord, Lord Thomas of Swynnerton. I agree wholly with the noble Lord, Lord Mackay of Adbrecknish, about the danger of being half in and half out. It is a danger that we shall come to later in dealing with the speech of the noble Lord, Lord Tebbit. I was interested, too, in the contribution of the noble Earl, Lord Peel. He seemed to take a rather Disraelian view of the European Community. I was particularly interested in the contribution of the noble and learned Lord, Lord Slynn, as I am sure all noble Lords were.

But, of course, the pyrotechnical event of the day was the contribution of the noble Lord, Lord Bruce of Donington. He clearly has a new vocation. It is interesting that the vice-chairman of the BBC was present today. I hope that he will immediately employ him both as a performer and as a script writer for the next series of "Yes, Minister". The interesting aspect about the contribution of the noble Lord —it could have continued much longer to the entertainment of your Lordships—was that it did not deal in any respect with the issues with which we are concerned today. He offered no conceivable alternative to that which has been offered by the treaty which we are discussing.

Finally, there was the contribution of the noble Lord, Lord Rees-Mogg, which contained the most devastating condemnation of the management of our economy over the past 14 years. In his new incarnation as the prophet of the Apocalypse he is constantly commenting with extreme pessimism and terrible predictions on almost everything that happens every day of the week. However, as we know, that is the new manifestation of his journalistic genius. So far as I know, his only answer to the problems which confront this country is that we should return to the gold standard.

The debate has been of extreme interest and very considerable importance. As I understood the analysis which was put before us by the noble Lord, Lord Tebbit, he was arguing, together with some of his friends, that under the circumstances which confront us today, small is beautiful, big is breaking down, nationalism is growing, and that in those circumstances the development of the European Community is singularly inappropriate. I hope that in making that very crude summary of the basis of the argument I do not misinterpret what he said.

The noble Lord said that the Treaty of Maastricht was bad for the United Kingdom, bad for the 11 states and bad for the whole of Europe. In particular, he identified as one of its central weaknesses—if I may so describe them—that it would damage the development of democracy and a reformed economy, I take it in Central and Eastern Europe. As one who has taken a close interest in the affairs of Central Europe over many years, I can only say that I regard his comments on the impact of the European Community on that area as a matter of the highest importance.

I believe that unless the European Community can contribute positively and constructively to the rescue of those countries which have previously been under the domination of the Soviet Union it will not have fulfilled one of the functions for which it was invented. I take a rather contrary view to the one which the noble Lord described. I wholly agree with him that the restrictions on the export of agricultural goods, textiles and steel from those countries are highly undesirable. I equally hope, in the course of the next year or so, that the restrictions will be relaxed. It should be the policy of the United Kingdom Government, through what influence we have, to relax the restrictions. That should be a prime motivation.

However, we are in a much better position to secure that relaxation from within rather than from without. I know that the noble Lord does not want us to get out and I shall come to the question of whether we have the halfway house which he proposes and which I think is rather dubious. The fact is that those Central European countries are queueing up to join the European Community, and the Community must be strong, politically strong, and have the digestive capacity to embrace those countries in a democratic and economic system. That is a huge task.

The noble Lord talks about Europe to the Urals and includes Yugoslavia, Romania, Bulgaria, presumably, and possibly other countries; the Urals includes the Ukraine. I wonder whether we have the digestive capacity to do that and whether to attempt it would be to break the Community which has been built up over many years slowly and gradually. Many people, who have spoken in support of what they thought the noble Lord's proposals were, said, "Slow down the process". That is in contradiction, it seems to me, to the proposal that the Community can expand almost indefinitely and accommodate the economies which are in a state of catalepsy. They are countries whose political arrangements are, to say the least, primitive. I accept absolutely that this is one of the challenges of the next 20 or 30 years. I take a rather different view as to how we should approach it. I believe that for us successfully to help those countries will strengthen the Community politically as well as economically.

If we are to expand the Community, we must deepen it. The wider it becomes, the greater must be the political content. That is where the noble Lord and I are probably in disagreement. I think that it is a perfectly acceptable and respectable disagreement. The debate is a perfectly acceptable and respectable one. But the case which he puts is not that of many people who spoke earlier and who thought they were supporting what he said. That is an off-the-cuff immediate response to comments which he made. I would have been happier if they had been made earlier in the debate so that all of us could have considered them more carefully and slowly, as I hope we shall.

I wish to mention two other points which seem important in this whole matter. They relate closely to what the noble Lord, Lord Tebbit, was talking about: enlargement. Many people have referred in the course of our debate to enlargement in one way or another. There are few keener on enlargement than the noble Baroness, Lady Thatcher. What has been less discussed in the course of our debate is the consequences of enlargement on the Community's institutions, its machinery and its decision-making. We must remember that the Community institutions were based on a Community of six—six people who were basically agreed in what they wanted to do, in the way they wanted to do it and in their cultural, political and (as it were) bureaucratic arrangements. Voting among those six was a relatively unimportant affair. Most of the stuff was done by agreement or by deals. The number then expanded to 12, and immediately problems arose. Qualified majority voting increased, has increased and must increase. If that Community is increased from six to 12, to 17, the institutions have to be radically changed.

My criticism of Maastricht is that it did not address the problems that will inevitably arise when one increases the size of the Community by getting the EFTAns—and not only the EFTAns but the central Europeans—into the Community. It will lead to a fundamental reappraisal. I hope that between now and 1996 that will be undertaken urgently and quickly.

My view of Maastricht is that it would be a disaster if the Treaty were not passed and ratified, and if it were not improved between now and 1996. That is another difference between my views and those of the noble Lord.

Finally—and I must abbreviate my remarks at this extraordinarily late time—I believe that in the course of our discussion in the past 48 hours we have not addressed seriously the international and European consequences of a failure on the part of this country to ratify the Maastricht Treaty. It would have very serious consequences for our economy and for our ability to influence events (for the reason which I have suggested already) and to control our own destiny. The noble Lord, Lord Callaghan, referred to its consequences on the Continent more obliquely and briefly. But I believe that a failure on our part in that part of the world would be drastic and dangerous.

There seem to be two possible scenarios. In the first, the consequences would be that it would increase those forces of nationalism within Europe which are so extremely dangerous; that it would loosen Germany's ties to the West and her commitment to integration; that it would encourage de-stabilisation and possibly lead to division in Italy; that it would set back enlargement and the likelihood of political and economic reform in central Europe—it is already hard, and would be made harder; that it would encourage more generally Balkanisation and diminish our capacity to limit it; that it would, in addition, encourage isolationism in the United States. These are the perfectly serious and foreseeable consequences of a failure on our part to ratify the treaty.

There is an alternative scenario. It is—and I believe that this would follow from the noble Lord's half in, half out position, as I would describe it—that the inner core of the Community would gather round the old Six and they would create an exclusive, inward-looking, protectionist Community without this country and without our influence. That Community would inevitably be dominated by Germany. It is the very nightmare of—we cannot describe them in terms that they will accept-Europhobes, Euro-sceptics, Euro-paranoids or whatever they may be called: those who are against the treaty. That is the consequence and the second scenario of failure on our part.

I apologise for keeping noble Lords so late at this hour. But I urge your Lordships to pass this Bill so that the treaty can be ratified quickly and we can get on with looking to the future.

2.5 a.m.

Lord Peston

My Lords, this has been an interesting and important debate and there have been some excellent speeches. But all good things must come to an end. There can be no doubt that every relevant topic has been raised and almost every conceivable point of view expressed. Whatever else we have done, we have produced a gold mine for future PhD students of government and political science, some of whom, I hope, will be British.

Obviously we differ broadly on whether or not we favour the treaty. For me, of more significance is a different distinction that I tend to make between what I call the zealots (or less pejoratively the people of principle) and the pragmatists or empiricists. I echo some remarks that were made by the noble Lord, Lord Carrington. I count myself among the latter; I am an empiricist. I am not an unequivocal admirer of the Community. Its faults are all too clear. But I believe that on balance its benefits far outweigh its costs for the inhabitants of Europe in general and certainly for the men and women of this country.

I understand from most of the contributions made to the debate that on this matter there is nothing between most of us on the economic benefits of the single market. At least I understand that to be the case. I say that to make clear my view about the net benefits, despite being acutely aware of the waste imposed on consumers by the common agricultural policy and the obvious possibility that we could easily devise improvements which would benefit farmers and consumers simultaneously. Instead, the one area where we do not seem to have any subsidiarity is on the CAP. Indeed, my noble friend Lord Carter, who is an expert on these matters, showed me the document that farmers have to fill out to obtain support from the Community. The farmer needs to specify in enormous detail (to two decimal places) the amount of land and every animal that he has. I thought it a document that I could recommend to the Secretary for Education to be used to test some of our children; if they could do that, they would certainly deserve some kind of support from him.

I repeat that I support the Community, even though I am appalled by the activities of Mr. Attali and what goes on at the European Bank. I am shocked that the Community seems to find no way of getting rid of that gentleman and getting that body back into what it ought to be doing. But that does not cause me to give up my support for the Community. I just weigh it in the balance.

Let me make one general point at this stage. There are several aspects of the debate, including some of the speeches from my own side, which have left me uneasy. One of the arguments that particularly upset me came from those who said that they supported the treaty because the major elements that it contains will not happen in practice. I have to say that I regard that as intellectually disreputable. I shall not mince my words on that. The only valid positions are to support the treaty (which I do) or not to support the treaty. At some point your Lordships will have to make that clear. I was distinctly unhappy—to use the modern vulgar parlance—about those who wish to cop out in that way. Certainly that is not my view.

Secondly, I am not happy with those who wish to rush the Bill through, in the sense of saying, "Let us not have a proper Committee stage". My view is that we should argue; we should squabble; we should expose all sides of the argument. We have done quite a lot of that in this Second Reading debate already. It seems to me that it would be unforgivable to try and rush the Bill through and not to scrutinise it seriously. Again, I say that as a supporter of the Bill and one who is convinced that, with my noble friends—I even hope in due course with the help of the Government, and I shall come on to that in a minute—I can win the intellectual battle. However, I want to have that battle. So let us not hear any more about rushing it through and forgetting about the whole thing.

Let me turn to the single currency. I share the view of my noble friend Lady Blackstone and also, I must say to the noble Lord, Lord Tebbit, I share his. I support the single currency. I should like to know in terms whether the Government support the single currency. When I go through the Lobbies on the side of the Bill—again I shall come on to this in more detail —and when I advise my noble friends to go through the Lobbies, I should like to believe that on the key issues the Government are with me rather than against me. It is their Bill. Therefore I hope that the noble Baroness will tell me in simple terms that yes, she supports the single currency.

As the noble Lord, Lord Parkinson, pointed out in his maiden speech, it is at the heart of the treaty. There is no doubt about that, and again that is something that has not been said. The reason I support the treaty is because single currency is at its heart. I do not see the point of it otherwise. I have similar remarks to make in regard to the social chapter.

I was extremely interested in the remarks on economics of the noble Lord, Lord Rees-Mcgg. Unfortunately, it is so late that I shall not be able to devote too much time to them. I thought, however, that there was a certain illogicality in what he had to say. He referred to the mess in which the Western European economies find themselves; their large-scale unemployment and low or negative growth rates. But he ought also to reflect on what is the cause. It certainly cannot be Maastricht because Maastricht is not yet in place. It must be what we already have—individual nation states making economic policy on their own. The whole point of Maastricht is to change that.

As I am in a rather nasty mood, the noble Lord, Lord Rees-Mogg, might also reflect on the consequences of the monetarist policies which he advocated for a great many years. He may wonder whether or not they contributed to the unemployment that we currently experience.

It is a matter of judgment, but my judgment is that under the Treaty of Maastricht—assuming it is accepted—we can produce precisely the co-ordinated fiscal and monetary policy, to which my noble friend Lord Eatwell and others referred, which will restore full employment to the European Community. I must say to noble Lords, and I am also addressing the Government, that it is not possible in a world of free trade and free mobility of capital, for an individual country to control its economic policy. It is simply not a technical possibility. If one wishes to do that at all, it must be done jointly with other nations. That is what we should be doing, and if we did we could restore full employment across Europe.

I wish to make one further comment on the single currency. Again, I appreciate that it is controversial. I have never seen the treaty as overwhelmingly a matter of macro-economic policy. I see it overwhelmingly—I have argued this before—as part of the micro-economic policy in regard to the way markets work so that we do not go through all the nonsense of having to change currencies, or buy currencies forward in order to avoid risk when we engage in ordinary trade. I do not suggest for one moment that it will be easy to move to a single currency, but I have no doubt that it is a world well worth moving to. The gain to both firms and households will be enormous.

Let me say also on the opt-out clauses that I do not think they are worth the paper on which they are printed. It is perfectly clear—again, oddly, I find myself in agreement with those who are opposed to the treaty—that if the rest of the Community are going for a single currency, there is not the slightest possibility that we could or would exercise the opt-out clause. That is another reason why I support the treaty. I do not want us to exercise the opt-out clause. Equally, that is the reason why others are against the treaty. In my judgment, they are both honest, possible positions.

I take a similar view about the social chapter. I do not see how we can remain serious members of the Community if we behave as if we do not really belong. If other countries have enlightened social policies—and it is my view that they do—we must participate similarly, particularly because we have a rather good record with respect to social policy and the welfare state. Although normally very sympathetic to the views of the noble Lord, Lord Marlesford, on this occasion I found his remarks appalling. The suggestion that the welfare state is to do with something for nothing cannot be further from the truth. The British people have never thought that the welfare state is about something for nothing. They have always known that they have to pay for it. I say to the Government that the British people continue to expect to pay for it and get it and do not want to be told now, having paid for it all their lives, that they cannot have it any more. I regard the notion that somehow the British people are intrinsically free loaders extremely unattractive. It may well be that the noble Lord did not mean that, but that was what he actually said.

Another question on the social chapter that noble Lords ought to ask when they come to consider the opt-out is whether they believe that the multinational companies which dominate so much of Community production and trade will meet their social obligations on that side of the Channel but not on this side. Do they believe that for one moment those companies will tolerate being undercut by the supposedly cheap labour costs of companies located here, especially when quite a lot of them are not even British owned? The social chapter opt-out is also worthless and will not be used in the real world.

Some noble Lords expressed concern about majority voting in Community decision-making processes. I find the antipathy rather surprising. Majority voting is a perfectly normal democratic way of doing all kinds of things. Surely, the lesson that we must learn from majority voting is that it is the duty of our leaders to negotiate and make some friends so that we are in the majority. To take it for granted that we will always be in the minority suggests to me either a counsel of total despair or at least that we should close down our rather expensive foreign service since it cannot seem to do anything for us. Nothing can be more absurd than our continual adoption of the role of the sulking brat in a minority of one who will not do what anybody else wants and argues all the time that everybody else is out of step. What we need to do is find some allies and stop continually insulting our European partners. We may then get some allies.

On the constitutional position, I believe that the noble Lord, Lord Tebbit, was enormously courageous in the views he put forward. Given the views of the noble and learned Lord the Lord Chancellor, the noble and learned Lord, Lord Slynn, and the noble and learned Lord, Lord Wilberforce—who in my judgment was the greatest lawyer of his generation —that constitutionally there is nothing new in any fundamental sense, I find it very hard to argue that there is. I am not an expert. Nonetheless, I believe that noble Lords ought to take seriously the views of the incredibly distinguished members of the legal profession who have addressed us on the matter. It has never seemed to me that the Community was, or was ever intended to be, just a free trade area. What is interesting is that many Conservatives supported it because they thought it was a free trade area. I always find it rather paradoxical that many of my friends opposed it for exactly the same reason. But both sides were mistaken.

The Treaty of Rome was always about more than a free trade area. It was always about building a European Community. My view is precisely that which has been put forward—that once you started to say, "I will sign the Treaty of Rome", what you were doing was helping to build a European Community. It does not mean that everything that happens has to be accepted, but those who say that they are surprised by what has happened, as if it were different from anything that started, could never have understood the Treaty of Rome in the first place.

I said that I was not entirely happy with all the arguments deployed on my own side. Perhaps I may now mention just before I close two other arguments that have been put forward. I should warn the House that in addition I intend to make one or two nasty remarks about the Government and the Prime Minister, but noble Lords can shut their ears to those.

I find one argument that has been deployed on my side most unattractive. It is that Maastricht is inevitable and that we have no choice. I have to say —and this is a philosophical point—that I cannot and never could accept such a position. The treaty and the Bill provide us with an opportunity. They enable us to make a choice. We can choose. The game is not over, so to speak. What is unavoidable is the necessity for choice. My view is that the correct choice is to support the Bill and the treaty. But I certainly have no intention, and would regard it as appalling, to browbeat the other side by saying that it has no choice. Indeed, if there is no choice, why have we been involved in this at all? If there is no choice, why have we spent two long days on the Bill; and why are we going to have some long Committee days? We do have some choices. I hope that my remarks have persuaded enough noble Lords to make a choice in a particular direction. But the idea that we have no choice I regard as quite preposterous.

I wish to make one or two concluding remarks. Why are so many members of the public worried about the Maastricht Treaty? It seems to me that the reason is that our leaders do so little to persuade them about the merits of the treaty. I do not think that that criticism can be directed against my right honourable and noble friends because we are forthright in our support of the treaty. But, regrettably, the Opposition do not receive the media coverage that is available to the Government. Equally, the media much prefer to emphasise the failings of the Community rather than its successes.

But the real reason why the public is worried is that the Government, and especially the Prime Minister, have not given any kind of lead on the Maastricht Treaty. When is he going to speak out forthrightly and favourably about the Community and the treaty? Until he does so many members of the public will believe that, secretly, the right honourable gentleman shares the views of the Europhobes, or at least the Euro-sceptics, and even of the anti-marketeers, and that in the end what he is saying is that he does not believe any of this stuff. What I look forward to—and I would rather that it happened sooner than later—is the Prime Minister joining the rest of us in convincing the public that this is a treaty of great merit and of great importance.

I support the treaty. I think that it will be beneficial to the people of this country. In doing so I have no intention of denigrating those who disagree with me. I regard them as having a fair, if in my view incorrect, point of view. But I shall use what remaining time we have in your Lordships' House over the next few weeks strongly to support the treaty. I shall vote appropriately. I shall advise my noble friends to vote appropriately. And I hope to hear that the Government themselves in the end really do believe in the treaty that they have brought before us.

2.25 a.m.

The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey)

My Lords, we have had more than 25 hours of thoughtful debate on the European Communities (Amendment) Bill, the Maastricht Treaty and our future in Europe. We have heard three accomplished maiden speeches by my noble friends Lord Parkinson of Carnforth, Lord Amery of Lustleigh and the Earl of Donoughmore. I join the many tributes paid to them.

We have had the fun and the light relief today of the speech of the noble Lord, Lord Bruce of Donington. I am not sure that "Yes, Minister" is the series that he should be offering to the BBC or to some other television station. It could be something like "Crazy Commissioners". But there have been speeches of passion and much sound business sense such as that in the notable speeches of my noble friend Lord Alexander of Weedon and the noble Lord, Lord Cobbold. None of us will forget the vision of my noble friend Lord Thorneycroft, nor the wisdom of my noble friends Lord Carrington, Lord Pym and Lord Howe of Aberavon, all of whom brought to this House their experience as former Foreign Secretaries. The noble Lord, Lord Callaghan, gave the House a persuasive and deeply-felt analysis, and my noble friend Lord Whitelaw gave a remarkable and stout-hearted speech full of common sense.

This has been an outstanding occasion for your Lordships' House and the nation. In a few moments I shall try to respond to the main themes, but I ask for your Lordships' understanding that most of the detailed points, after around 70 speeches today, making over 120 in the course of our debate, can be dealt with only at later stages, to which we look forward.

Rather unfairly, but because I know exactly what will happen if I do not, I am first going to make some points in relation to the speech of my noble friend Lord Tebbit. He spelt out his alternative to Maastricht. I can see that for some it has attractions. Its disadvantage is that it is not on offer. If the British Parliament were to say no to Maastricht it would not usher in the free-trading, co-operative concert of European nations which he described. The noble Lord, Lord Bonham-Carter, began to answer that, and no doubt we shall return to it at later stages.

But what it would usher in is a period of introspection, of bitter in-fighting and defensive national strategies just at the very time in Europe when we need to act together to meet the tremendous challenges that face us. I fear that it would almost certainly postpone considerably the much-needed enlargement of the Community.

My noble friend Lord Tebbit also asked me if I would tell your Lordships whether this treaty affected the Luxembourg Compromise. I remember seven years ago my noble friend's support for us when we were taking the Single European Act through the House of Commons. I was very grateful for it then. I can confirm to him tonight that the Luxembourg Compromise is unaffected by the Treaty on European Union just as it was unaffected by the Single European Act.

My noble friend Lord Tebbit, the noble Lord, Lord Peston, and earlier in our debate the noble Baroness, Lady Blackstone, asked about the single currency. The Government have always made clear that we do not believe that the Community is ready for a single currency either economically or politically. That is why my right honourable friend the Prime Minister negotiated the UK protocol which preserves our freedom to take the decision on whether we should seek to participate at a later stage.

However, the Government recognise, and so should your Lordships, that others in the Community wish to commit themselves to a timetable for introducing a single currency now. However unrealistic we may believe that to be, we cannot stand in their way. So the protocol on transition to the third stage reflects all the member states' commitment not to prevent others moving to the third stage of EMU.

This Government's commitment is to the treaty, the Bill, and, above all, to making a success of Britain's Community membership. We must ensure that Britain plays its part in shaping the Community of the 90s and of the next century. Of course, there is much to be done. But if we work within the Community, we can make the needed improvements.

We will not forget the passionate pleas of the noble Viscount, Lord Tonypandy, and of my noble friends Lady Thatcher and Lord Beloff, however much some may disagree with what they said. But the Government's task must be to look forward. The Bill and the treaty can help Britain to strengthen its role and further its objectives in the Community and in the wider world.

A number of your Lordships have rightly criticised the centralising and interventionist forces at work in Brussels. It is this treaty and this Bill which provide the first real brakes on those forces. It is an improvement on the status quo. That is not to say that all the improvements have yet been made. This is a developing Community both in its institutions and in the number of its member states. We must follow up the changes which are being introduced. We must ensure that governments see that developments go with the grain and that they meet the needs of the member states as well as overall European needs.

We now have the chance, through this treaty, to put a block on unnecessary regulation. I believe that we should be taking it. Across the Community, the single market programme has swept away many thousands of national regulations. But it has opened the door to too much interference in the nooks and crannies of our national life. The principle of subsidiarity is designed to put this right. My noble and learned friend the Lord Chancellor has set out clearly how this will be done.

However, many of the complaints which have been laid at the Community's door are as much the sins of Whitehall as of Brussels. That was the essence of one of the points made so eloquently yesterday by the noble and learned Lord, Lord Wilberforce. That is why we are thoroughly examining the necessity for our regulations in Whitehall, not just requiring the Commission to do so.

Our achievement in entrenching subsidiarity shows how much we have to gain by positioning ourselves at the centre of the Community. Subsidiarity establishes that national action is the rule, and Community action the exception, as my noble friend Lord Caithness said last night. That is not our maxim: the Commission itself has stated it. Indeed, under the influence of subsidiarity only 77 legislative proposals were forthcoming in 1992 compared with 145 in 1991. That is no bland assurance. That is fact. The Commission has produced a preliminary list of proposals for repeal or revision. That is reality. And we, together with the French and the Germans, are aiming for a much bigger bonfire of Community, as well as in our case national, regulations by the end of this year.

A real gain in the Maastricht Treaty is the introduction of greater accountability. Several of the amendments to the Treaty of Rome will strengthen the rule of law. Many of them were British initiatives.

Lord Pearson of Rannoch

My Lords, I wonder whether my noble friend will give way.

Noble Lords

No!

Lord Pearson of Rannoch

My Lords, I am very grateful. Now that my noble friend has finished, I believe, dealing with the question of subsidiarity, I fear that I must press her on some questions —and I have given notice of this—which I put to my noble friend the Minister last night, or rather in the early hours of the morning, and to which I did not get an answer. I have to say that my noble and learned friend the Lord Chancellor did not appear to answer these questions either when he opened today's debate.

Noble Lords

Order, order!

Lord Pearson of Rannoch

My Lords, I should also remind—

Noble Lords

Order, order!

Lord Pearson of Rannoch

My Lords, I think that this is a very important point. It has been mentioned much during today's debate.

Lord Hesketh

Order, order!

Lord Pearson of Rannoch

My Lords, I do not wish to make a speech. I wish merely to press the Government—

Lord Hesketh

Order, order!

Lord Pearson of Rannoch

My Lords, I really do think that this is an important point.

Noble Lords

Ask the question!

Lord Pearson of Rannoch

My Lords, the question is that in the Treaty on European Union it says that in areas which do not fall within its exclusive competence, subsidiarity will apply. That is to say, that the shield of subsidiarity does not apply in those areas which do fall within its exclusive competence. Therefore, the question I put to my noble friend the Minister in the early hours of the morning, and I put again to the Government, is: can they please identify precisely the areas which are within the exclusive competence of the Community and those which are not? If they cannot say that, and I believe that they cannot—

Noble Lords

No!

Lord Pearson of Rannoch

My Lords, can they say who will decide—

Noble Lords

Order, order!

Lord Pearson of Rannoch

My Lords, who will decide—

Noble Lords

Order, order!

Lord Pearson of Rannoch

—who takes the decision? Will it be the Council by qualified majority voting or by unanimous voting? Will it be the Commission or—

Lord Hesketh

Order, order!

Lord Pearson of Rannoch

My Lords, or will it be the Court? I think that your Lordships' House deserves an answer on this.

Noble Lords

Hear, hear!

Baroness Chalker of Wallasey

My Lords, I was wondering whether to give way, but I sought to be polite. I must say to my noble friend that that is very much a Committee point. If tomorrow, when he has the chance to reflect upon the speech of my noble and learned friend the Lord Chancellor, he is still not satisfied, then I know that he will bring his questions to us when we come to the Committee stage.

Noble Lords

Hear, hear!

Baroness Chalker of Wallasey

My Lords, at this hour of the night, after so many speakers, I believe that it is right, having laid out, as one does on Second Reading, the main tenets of my case, that that should be left to detailed discussion at a later stage.

Noble Lords

Hear, hear!

Baroness Chalker of Wallasey

My Lords, the real gain in this treaty is the introduction of greater accountability. Several of the amendments to the Treaty of Rome will strengthen the rule of law. Many of these were British initiatives.

The Court of Justice will have new powers to fine those member states which do not comply with judgments against them for not implementing Community law. Similarly the treaty reinforces the role of the Court of Auditors in scrutinising how taxpayers' money is spent. The treaty rightly strengthens defences against fraud. From what he said, I know that the noble Lord, Lord Dormand, will be pleased to hear that. We are building on those advances. Just yesterday at a meeting of ECOFIN the Commission was instructed by the Council to produce new measures to combat abuse.

For Britain the treaty includes two opt-outs. Our EMU opt-out means that Parliament, including this House, will decide whether or when to join Stage III of economic and monetary union, while allowing us to continue to play a full part in formulating the Community's policy in that area. My noble friend Lord Stewartby argued most eloquently the impossibility of a monetary union without political union. With our opt-out the British Parliament is in the enviable position of being able to judge the truth or falsity of his proposition, at a later stage, before we take a decision whether, and perhaps when, to move to Stage III. The social protocol means that we will not be committed to the social chapter, with all its adverse consequences for jobs and competitiveness, so well described by the noble Baroness, Lady O'Cathain. The ability to compete effectively in our own markets and abroad is one of the biggest issues confronting Europe today. The noble Lord, Lord Kilmarnock, put that point so well in our debate. Perhaps I may put one other point on record here so that there is no further misunderstanding. It is that there is no mention of a minimum wage in the Treaty of Rome, as amended at Maastricht, in the social protocol or in the agreement annexed to it.

A number of points raised by the noble Baroness, Lady Blackstone, were well answered by my noble friend Lord Caithness last night when I believe she was not present. We will have later opportunities to debate the correct role for the Community in the area of social policy. The pattern of social provision is so diverse across the Community, and the traditions so different on matters like industrial relations, that to attempt harmonisation would be deeply damaging to business and to jobs and also at variance with the principle of subsidiarity. Our social priority in the Community is the creation of jobs. The noble Baroness, Lady Blackstone, asked how we prevent social dumping. It is with health and safety standards properly applied. The term "social dumping" can only be a pejorative description of the theory of comparative advantage.

I now turn to the calls that have been made in all parts of the House for a referendum. This is not directly part of the Bill but it has been clear from our debate that it is an issue which raises high passions. I shall make three points. First, if there were an argument for occasional and exceptional referenda to be held in this country on issues of major constitutional change then one such issue was that of Community law having precedence over national law. As the noble Lord, Lord Thomson of Monifieth, said, that was settled in the referendum of 1975. There is no constitutional innovation in the Maastricht Treaty. As my noble and learned friend the Lord Chancellor said this morning and the noble Earl, Lord Russell, said this evening, that is not the question. It was settled in 1975.

Secondly, some of your Lordships argued that the people had no choice at the last election for the major parties were in broad agreement that Britain should ratify the Maastricht Treaty. I find that a spurious argument for two reasons. We should remember that there were around 20 candidates who stood on an explicit anti-Maastricht platform. On average they received less than 1 per cent. of the vote. We should also bear in mind that our constitution does not have different rules for when the major parties happen to be in agreement. There are, believe it or not, many such issues. All the major parties, for example, support our membership of NATO. Nobody to my knowledge has called that relationship into question merely because there was no opportunity to vote for an anti-NATO party at the last or any other election. Nor have they called for a referendum on our membership on the grounds that the obligations of collective defence undermine our national sovereignty.

Thirdly, many of your Lordships have already referred to the clear decision on a referendum taken in another place. I cannot improve upon the wise words of so many noble Lords, particularly those of my noble friend Lord Whitelaw.

The Maastricht Treaty is an important step towards a better kind of Europe. It strengthens the ways in which we work together with our partners on problems beyond the scope of the traditional nation state. It gives a new basis for co-operation against crime and economic migration and for promoting our shared interests and values in the wider world. As my noble and learned friend the Lord Chancellor made clear in his thoughtful opening address at the start of today's debate, the treaty is not revolutionary. It is a natural development from what has gone before.

The common foreign and security policy is an evolution of European political co-operation. That co-operation has been developing for more than a decade, enabling the Twelve to work together in national capitals across the globe and on issues such as South Africa and the Middle East.

Most people share the Government's, and indeed our, disappointment that the Community could not and has not yet halted the conflict in the former Yugoslavia. But many expectations were unrealistic. As my noble friend Lady Elles said, no outside party can impose a peace on people determined to fight. Three years ago the Community would not even have attempted to formulate a common policy. Eighty years ago it was the pursuit of conflicting policies by the great European powers in a previous Balkan crisis which led to the First World War. No one is claiming that our political co-operation is perfect. It has tended to be least impressive when it sought to go beyond the capabilities of the Twelve. But the Community has held together. It has led the economic and political pressure on Serbia and Montenegro. It has provided the only machinery for seeking a peace. It has co-ordinated sanctions. It has played a leading role in the provision of humanitarian relief.

The Maastricht Treaty is a step towards a less centralised Community—a Community that is more open and better able to accommodate the differences among the nations of Europe. The idea of a centralised Europe may have had a certain attraction for the original Community of Six but for 12, 16 or 20 diverse nations it is at once undesirable and unrealistic.

The noble Lords, Lord Richard and Lord Jenkins of Hillhead, recognised the importance of ratifying Maastricht for enlargement of the Community, first to include the four EFTAn applicant countries and then others. The Community must face up to the many challenges of post-Communist Europe. The countries of Central and Eastern Europe must be welcomed into the mainstream of our continent. This Government want also a successful conclusion to the GATT round and a more open Community, especially to trade from the emerging democracies of Central and Eastern Europe. We shall continue to argue vigorously for that outcome.

If Maastricht were to fail, the shutters would go up. We should certainly not be able to help the countries of Eastern Europe because it would undermine the co-operation already achieved in Western Europe.

Maastricht can help us move towards a whole continent of free democracies, outward looking and without trade barriers. That is the Government's vision of Europe. The Bill before us allows the Government to ratify the treaty and for us to play our part in achieving that vision. I believe that it is best for Britain. I believe that that is what the Bill's supporters have well argued during these two days.

Some opponents of the Bill attack issues which are either untrue or unconnected with the Bill. Even where criticisms are correctly targeted, they are criticisms for all that. I have heard many negative statements about what the opponents do not want. We have heard from the noble Lord, Lord Tebbit, his view. I believe that I am not alone in this House in believing that his scenario is not what is best for Britain. I wish to see Britain go forward with confidence, taking its place and playing its part in the evolution and development of the wider Europe. Europe has a real role to play in helping the emerging countries of Central and Eastern Europe and the former Soviet Union.

It is more than 20 years now since I led 14 nations of young Europeans through London on the eve of Britain's accession to the Community. Much united us —much much more than divided us. Above all, we were united by a vision of supportive co-operation between individual nation states for the benefit of each and all.

That is the kind of Europe that I want to see us building together. It is the one of which we wish Britain to be a full and participating member. That is why I ask that your Lordships give this Bill a Second Reading this evening. I commend the Bill to the House.

On Question, Bill read a second time, and committed to a Committee of the Whole House.