European Union (Accessions) Bill

HL Deb 25 July 1994 vol 557 cc529-58

3.17 p.m.

Viscount Ullswater

My Lords, I beg to move that this Bill now be read a second time. I am introducing the Bill today in the absence of my noble friend the Minister of State at the Foreign and Commonwealth Office. My noble friend Lady Chalker regrets that she is unable to attend. She is at present visiting Uganda and hoping also to go to Rwanda. I hope that the House will understand her absence and will accept me in her place.

The Bill follows from the treaty of accession between the EU and Norway, Austria, Finland and Sweden which was signed in Corfu a month ago. Its purpose is to ensure that Britain is able to honour the obligations given in that treaty. Its passage is essential if we are to ratify the accession treaty and allow those four countries to accede to the European Union.

The Bill gives effect to the treaty in UK law by adding it to the list of Community treaties in Section 1(2) of the European Communities Act 1972. In addition, Clause 2 of the Bill approves the accession treaty for the purposes of the European Parliamentary Elections Act 1978. That is necessary because the treaty gives new powers to the European Parliament in one minor respect. It provides for the European Parliament to verify the credentials of representatives elected in the applicant states between signature of the treaty and its entry into force.

The length of the Bill hardly reflects the political and economic importance of the enlargement of the European Union with which it is concerned. Enlargement to include these four EFTAn applicants will be an important step on the way to a European Union which embraces the whole of Europe rather than just half of it. EFTAn accession will help to bring about a European Union which is open, diverse and outward-looking.

Britain has played an important role in this enlargement. It was during the British presidency two years ago that the decision was taken to open negotiations with Austria, Finland, Norway and Sweden. Two months after the Edinburgh Council, Finland, Sweden and Austria started accession negotiations. Norway joined them shortly afterwards.

Little more than a year later the negotiations have been completed in record time and we are only a few months away from welcoming the four countries into the European Union. Concluding the negotiations in such a short time was not easy. It would not have been possible had not those four old friends been exceptionally well qualified for European Union membership. All are prosperous, stable democratic countries, experienced in international co-operation. In particular, all are already members of the single market through their membership of the European Economic Area. Nevertheless, there were many difficult issues to be resolved. Both sides had important interests to protect and it was not always easy to find a balance. But a deal was eventually struck. I believe it was a good deal for Britain, for the applicants and for the Union.

Let me explain some of the more important features of the agreement. Agreement on the budgetary consequences of accession was reached only at the very end of the negotiations. Three of the four applicants will be net contributors to the Community budget. Finland's contribution is expected to be around the same level as its receipts.

The difference between the new applicants' net contributions and their cost to the Community will be available to reduce the contributions of existing member states to the Community budget. In the case of the UK, this benefit should be around £300 million over the first six years of accession.

The limits on expenditure imposed by the Community's own resources ceiling will remain. Nothing in the accession agreements can change that.

Lord Stoddart of Swindon

My Lords, I am most obliged to the noble Viscount for giving way. When he says "£300 million", does he mean £300 million over six years or £300 million per annum for six years?

Viscount Ullswater

My Lords, the £300 million is spread over the first six years of accession.

Each successive enlargement of the Community has seen difficult negotiations on agriculture. These accession negotiations were no different. Three of the four applicants—Norway, Finland and Austria—have significantly higher levels of agricultural support than is provided by the CAP. Arrangements had to be agreed for the transition to Community levels of support after accession.

In previous enlargements the transition to the CAP has been managed through price compensation at borders. But the single market has seen the abolition of border controls within the EU. A solution was therefore agreed which avoided the need for border controls between the new and existing member states. Austria, Norway and Finland will adopt the basic mechanisms of the CAP immediately on accession and their agricultural prices will be aligned with those in the Community. The new member states will be authorised to compensate farmers for the loss of income this price alignment will cause them in the first four years after accession. These compensatory payments will be partly funded from the Community budget and will be degressive over the four-year period.

The EU's contribution to the cost of these transitional payments to farmers will be more than offset by the contributions that the new member states will make to the Community budget. Because three of the four applicants will reduce levels of support on accession, the amount of agricultural protection in Europe will fall. Britain's agricultural exporters will be free to take advantage of the newly opened EFTAn markets.

Fisheries was one of the most difficult areas of the accession negotiations with Norway and among the last to be settled. At one stage, it seemed that negotiations with Norway might stall altogether over the issue. The Spanish demanded extra Norwegian fish as the price of agreeing to enlargement and the Norwegians resolutely refused to give up a single fish. But after long and hard negotiations, the deadlock was broken and a deal acceptable to both sides finally struck.

The agreement with Norway on fisheries will benefit British fishermen. The agreement reaffirmed what is known as "relative stability" as the foundation for the allocation of fishing opportunities between member states and consolidated all British quotas on an unchanged basis. British fishermen have gained flexibility to fish western mackerel in Norwegian waters for the first time. We should also gain an extra 2,674 tonnes of north east Arctic cod by 1997 if this stock develops as predicted.

It was important to us that the post-enlargement arrangements for qualified majority voting should be acceptable. We wanted to ensure that there would be a fundamental review of the system of qualified majority voting at the 1996 intergovernmental conference. This was agreed. The conference will need to devise a formula that more closely reflects population levels in member states but ensures that the rights of minorities are properly safeguarded. In the meantime we insisted on a legally binding arrangement, known as the Ioannina Compromise, which requires the presidency and the Commission to take "any initiative necessary" to reach a solution supported by member states with at least 68 votes. As part of the negotiations which led to this, we obtained assurances from the Commission concerning the handling of the social programme. These have already proved their worth.

I want to focus now on the benefits to Britain and to Europe of the accession of the four countries. As net contributors to the Community budget, Norway, Sweden and Austria will share our interest in budget discipline and in value for money. Like us, they will want to ensure that Community funds are used efficiently.

All four countries will join those in the EU arguing for a market-oriented, free-trading Europe rather than the protectionist, fortress Europe approach that we have fought against.

We can also expect the four countries to support us in arguing for the vigorous application of subsidiarity throughout the Community. Like us, they believe that the European Union should be a union of diverse nation states, each preserving its own traditions and identity.

Finally, the enlargement of the Community by four countries with strong records of contributing to peacekeeping and generous aid programmes will increase its international standing and influence. All have useful experience to bring.

The benefits to the UK of EFT An accession are clear. I hope that the benefits of European Union membership are clear also to the people of the applicant countries. Certainly, they are to the Austrian people, who voted overwhelmingly on 12th June to accept EU membership. I welcome that decision. The remaining three referenda will be held in the autumn. Obviously, I hope that the Finns, the Swedes and the Norwegians will vote to join us.

The accession of the four countries is clearly in the interests of both Britain and Europe. But. it is more than that. We can already see beyond this enlargement to the next. A number of countries have already applied.— Turkey, Malta, Cyprus, Poland, Hungary and Switzerland. Other central European countries are planning to do so. Overcoming the economic divide that still exists between East and West and embracing the whole of Europe will be the next and greatest challenge that the European Union has to face. EFTAn accession will be the first step towards achieving that. I commend the Bill to the House.

Moved, That the Bill be now read a second time.— (Viscount Ullswater.)

3.30 p.m.

Lord Archer of Sandwell

My Lords, the House will be grateful to the noble Viscount for that clear exposition. Perhaps I may echo the welcome from my noble friend Lord Williams of Elvel to the noble Viscount in his new responsibilities. I gather from what he said that those responsibilities will not include speaking regularly on European affairs, but perhaps I may welcome him at least pro tanto to the exclusive club of those who interest themselves in these matters.

On the principle of the Bill there is no dissent from these Benches—perhaps I should say more properly from this Bench. Perhaps I may say at once that the views of my noble friend Lord Stoddart are well informed. They have been held consistently throughout. They are passionately held. But I believe that even he will recognise that they are not necessarily representative of the mainstream of Labour thinking on these matters. If we can agree on that, I am sure that my noble friend will make his own contribution to the debate.

I say "we" welcome the principle of the Bill because we welcome the accession to the European Union of the four countries listed there. We would be inconsistent if we adopted any other view. We in the Labour Party have done all that we could to bring it about. It was an element in our manifesto in the European elections; a policy statement including that commitment was endorsed by conference last year; and the Socialist group in the European Parliament has urged it.

For many of us this new chapter will evoke an element of retrospection in addition to what, if I may coin a word, would be "prospection" by way of testimony or confession, as appropriate. I was one of the 69 Labour Members who in another place in 1971 voted with the Heath Government to endorse Britain's accession to the EEC in opposition to what was then, admittedly, a majority of my own party and a vociferous minority of Conservatives. I campaigned for an affirmative result in the referendum of 1975. So I can claim to have been a Christian before Constantine. But that has not precluded something of a love-hate relationship with the European Union.

In those early days I saw the unity of Europe as an end to centuries of warfare and to the mutually destructive plotting and bullying of European nationalism and the beginning of a new era of building together for a common future. I say, and I know that some of my noble friends will echo it, that we have seen a number of things happening since then which have not seemed to me to stem from that recognition of our common humanity. Spending vast sums accumulating food mountains, while every television programme showed pictures of starving people in Africa and Bangladesh, was not the best way of establishing a commitment to internationalism. The attitude of Europe to its guestworkers did not seem always to be opening a doorway on the rest of the world. There have been times when we were in danger not of manufacturing a supranational ideal but of creating one more tunnel-visioned nationalism. The emphasis appeared to be on exclusivity, and I know that that was one of the reasons why some of my colleagues in the Labour Party were hesitant about the vision of Europe.

It is good to see the Union now looking outward, no longer a framework for excluding the world outside but inviting applications for membership from those of good will. That is my first reason for welcoming the accession of the new member states to the European Union.

My second reason is this. At the time when the EEC (as it then was) appeared intent on building a wall around itself, some of its member states were having difficulty in raising their eyes above their own garden walls. Having shared the dream of a more open and generous Europe, I was involved in some of the issues which came before the European Court and I was a member in the other place of the Select Committee on European Legislation. I saw those nation states which claimed to have buried their past rivalries still as intent on scooping more than their share of the kitty as ever they did in the days of Metternich. And I came to realise that national governments who have come together in consequence of a vision are not somehow translated to a new level of sainthood. I have said, as I believe my noble friend Lord Stoddart will recognise, some harsh things at various times in the past.

But I saw on reflection that it did not follow that the architects of European unity were wrong. Working, however selfishly, within a framework of rules and litigation is a more civilised way of proceeding than participating in anarchy, where there are no constraints. And it is better for people to cheat one another than to shoot one another. What we can do is to work towards agreement on changing some of the rules. The CAP as it now is is indefensible against any context of logic and common sense.

Lord Bruce of Donington

Hear, hear!

Lord Archer of Sandwell

My Lords, of course my noble friend accepts that; I have said it at least as vociferously as he has, although not always with the same degree of information.

We in Britain have to shoulder much of the blame. When it was being worked out, we absented ourselves from the table. It was being said in this country that we did not wish to be subjected to the CAP. But we now know, as I hope Norway, Sweden and Finland will recognise, and as Austria has already recognised, that, inside or outside, you cannot insulate yourself from a policy adopted by your neighbours simply by staying away. All you achieve is to make sure that your concerns are not taken into account and your voice is not heard. Until now we have had to live with the consequences of that. We could not ask for a complete renegotiation of the CAP to accommodate a Johnny-come-lately. But, as the noble Viscount indicated a few moments ago, with the expansion of the European Union and the inclusion of further members, each with its own characteristic agriculture and its own concerns, there is an increasing likelihood that some of those things may be looked at again. An expanding Europe is less likely to be a fossilised Europe.

I add just two comments. First, I hope that we will not follow the outdated examples of the past, with each country concerned only to maximise its own interests at the expense of its neighbours, but that we will genuinely seek rules which are fairer to everyone and more likely to ensure the general prosperity. And, secondly, we in Britain are more likely to carry weight in any negotiations if we are perceived as committed to a prosperous union, and not as the reluctant and surly odd one out.

The third reason why I welcome the expansion of the Union is that I disagree with those who speak of a choice between widening and deepening the Union. I believe that a widening of the Union will lead to a closer binding together of its members. It will not be possible indefinitely to match each new accession with the appointment of a new Commissioner or there will be more Commissioners than there are functions. And without the pretence of a national representative on the Commission it will need to be made more accountable to the European Parliament.

It has always surprised me that those colleagues in this country who have been most anxious about the powers of the European bureaucracy have been the most reluctant to see it controlled effectively by an elected body. Furthermore, I believe that, with the growth of membership, the Council of Ministers will undergo something of a metamorphosis, perhaps to be more transparent and, who knows, to evolve into something approaching a senate, there to protect the interests of member states and to maintain a vigil for subsidiarity but not to ensure that the whole traffic proceeds at the speed of the slowest vehicle.

None of that alarms me. It will not deliver us into slavery. It will mean that the British people will participate in decision-making at a further level in addition to decision-making at national level and at one or more levels of local government.

I find it puzzling when the word "federal" is used to connote an unacceptable level of centralism. It means no such thing. It means simply that there is a clear and mutually agreed division of powers between individual members and the central authority. What proportion of those powers should be exercisable by the common authority and what proportion by the individual national authorities is a matter for negotiation and agreement.

But what is important is that such decision-making powers as are entrusted to the institutions of the Union should be exercised effectively, preferably with the minimum of uncertainty and without the need for constant, repetitive and time-consuming litigation before the European Court. And I believe that that process will be encouraged by the accession of new members.

The fourth reason—and your Lordships may be relieved to learn that it is the last which I propose to ventilate today —why I welcome the accession of new members is that I believe it will encourage in the world outside the values at the heart of that vision which informed the Founding Fathers of Europe. They recognised that any form of unity would be acceptable only if it enlarged the opportunities of the constituent peoples and not if it sought to constrain them. Membership was not to be conditional on the domestic economic or social philosophies of member states, except in so far as they impinged on fair competition. But they were clear in their generation that the Union was to serve as a bulwark against regimes of the kind which Europe had experienced in the war years. It was to be a union of democracies.

For those who aspire to membership there is an inducement to practise democracy, and in our generation to practise a respect for human rights. In relation to the four countries listed in the Bill, it does not generally matter because they are democracies in any event and there is no question mark over their capacity to fit into a democratic pattern, nor over their standards of human rights. That has not always been the case with potential members. In earlier, more unhappy days, Spain and Greece would clearly not have qualified for membership. There are those potential members I hope will not qualify without some improvement in their standards. There are elements within some of the countries in Eastern Europe who would be reluctant to see those standards established there. And they may seek to use the economic grievances of their electors to induce them to look to fascism as an answer.

It will be no bad thing if it becomes clear that those practices would not ensure their countries a welcome among the community of nations, nor acquire for them the benefits of membership of the European Union.

Perhaps I may repeat once more, at the risk of being tiresome, that the European Union and its predecessors were born from a vision, a dream, of men such as Robert Schuman, Alcide De Gasperi, Matteo Lombardo and Altiero Spinelli. Their vocabulary lacked words like "directive", "negotiating mandate" and "veto".

It is inevitable that those who have to make it work, day after day, compromise after compromise, working group after dreary working group, will sometimes lose sight of those ideals and see the whole thing as a market place where you do a deal, you make a bit or lose a bit, and you may get away with a piece of sharp practice. Even the compatriots of De Gasperi and Spinelli have been known on occasion to lack their vision of community. New members, coming in fresh after a clear decision to join, may just possibly catch a glimpse of that early vision and may remind us of those ideals. I believe that that is the strongest reason of all for welcoming an expanding Union.

3.44 p.m.

Lord Bonham-Carter

My Lords, I too welcome the noble Viscount to his new position and thank him for his introduction of the Bill. I wish to make only two points about the two speeches that we have heard. I was surprised that the Minister did not mention the IGC of 1996, which will be the focus of our attention in the coming years. I hope that in winding up he will redress that omission. Secondly, the noble and learned Lord, Lord Archer of Sandwell, spoke about national representatives on the commission. Surely that is mistaken. Surely it is the case that commissioners, directly they become commissioners, must swear an oath that they will be commissioners not to their nation but to the commission as a whole.

Lord Archer of Sandwell

My Lords, I am grateful to the noble Lord for giving way. If I said that, I must have been more than usually incoherent. I meant to imply that they are perceived as national representatives.

Lord Bonham-Carter

My Lords, I am grateful to the noble and learned Lord for his correction. They should not be perceived as national representatives and perhaps our interchange has helped to destroy that perception.

In 1992 the noble Lord, Lord Bruce of Donington, and I had the honour of serving on Subcommittee A under the chairmanship of the noble Lord, Lord Aldington, which undertook an inquiry into enlargement. Some of its conclusions are set out in paragraph 184 of its report. It states: The advantages to the Community and to Europe as a whole of enlargement are undeniable and this enlargement must not and need not threaten the effectiveness of the Community… The inclusion of EFTA countries and their acceptance of the CFSP [common, foreign and security policy] pillar will add both to the Community's economic strength and its influence in the world… The consolidation of free democracies and market economies in Central and Eastern Europe call urgently for progress in the relations of those countries with the Community… The problem is not whether there should be enlargement, but how and how quickly, and what adjustments should be made in the Community's institutions and procedures". There is not a word in that which I would alter. I draw particular attention to the conclusion, which raises three crucial questions. First, how are the European Union's institutions to be adapted to accommodate the countries from EFTA? Secondly, how are they to be adapted to leave room for the further enlargement of the Visegrad countries, which are on the agenda? Thirdly, how far and how fast can enlargement go? Those ate the crucial questions to which this Bill gives rise.

In this country attitudes to enlargement have been of two kinds. First, enlargement was seen as a means of diluting the pressure for political integration. It was seen as a way back to a free trade area. That appeared on occasions to be the attitude of the British Government, but as their attitude on these matters has been consistently ambiguous and hard to define one cannot say whether it was generally their attitude or that it sometimes was and sometimes was not. It was certainly the attitude of many Euro-sceptics and it was certainly how the British posture was seen on the Continent.

That interpretation was reinforced by the suggestion emanating from British sources that in some way the EFTA countries would be on our side in disputes, in political debates within the Commission and, in particular, as regards political integration. I believe that that was suggested by the noble Viscount. The latter was a characteristic British misunderstanding of what their attitude was, as was shown in the course of the negotiations. After all, they had decided to leave a free trade area and they were not going to do so in order to join another. The same is abundantly true of the Visegrad countries, which were to some extent daunted by the economic provisions of the European Union but which welcomed the idea of returning to a political Europe which would save them from a fate that they had so often suffered, as they saw it, of being a satellite of either Germany or Russia.

The second attitude is that enlargement carries with it the need for a radical and thorough revision of the Community's institutions and of its decision-making process. That has long been argued from these Benches. What is appropriate for six nations is very different from that which is appropriate for 12 and becomes quite impossible when dealing with 16.

As Sir Leon Brittan said in his book: The Union is already hard enough to manage as it is … It will prove harder still as three or four more applicants join … If we go beyond that without revising the way we take collective decisions, the wheels of the Union will grind to a halt". Hence the importance of the 1996 IGC. That will be a major constitutional convention, if those words and that language do not scare the wits out of the Government. That is what it should be and that is what it will be, whatever Her Majesty's Government may think or want. That is confirmed again by Sir Leon Brittan in his book when he says: Europe must start preparing the ground for those inter-governmental talks immediately … We must learn from experience and focus immediately on the changes needed to accompany enlargement as the central point around which all other questions will turn at the 1996 conference". For that reason I was surprised—and I repeat that—I was surprised that the conference hardly figured in the noble Viscount's introduction of the Bill. That is the heart of the matter and that is what we shall be discussing between now and 1996.

What will be the agenda of that conference? That was outlined in the Corfu Council on 24th-25th June at which a Reflection Group was established to prepare the IGC's agenda. The Reflection Group has an interesting composition. It is to be composed of a chairman appointed by the Spanish Government and the representatives of Ministers of foreign affairs. I take it that those representatives will be civil servants rather than Ministers, but the noble Viscount will correct me if I am wrong. It will be composed also of the president of the Commission and two members of the European Parliament. The latter was opposed by the British Government. I take it that they would have preferred the Reflection Group preparing the agenda for the IGC to be composed of national civil servants, one member of the Commission and one appointed by the Spanish Government, with no democratic representation at all. The British Government inveigh against the bureaucracy and lack of transparency at Brussels and yet they oppose the appointment of two democratically elected members of the European Parliament. They really are a very odd lot.

That is the situation. That group of people will examine the proposals for the reform of the institutions of the Community. There have been German proposals, Franco-German proposals and European Parliamentary proposals as to what the agenda and the reforms should be. There has been discussion with regard to the controversy between the large and small countries and how to achieve a balance: the size of the Commission; the role of the council; the nature of the presidency; the powers of the European Parliament; the application of subsidiarity; and linguistic problems. For example, the European Union now has 1,000 translators and it will need 60 more for each new country. That is the kind of problem which enlargement throws up and which must be dealt with in 1996.

All those proposals have been made but, as far as I know, there has been no British proposal. The noble Viscount will correct me if I am wrong about that. Have the Government no ideas or views on that matter? If they have views, what are they and when will they be made public? Or are we to repeat the mistake of Maastricht on which the debate took place after the treaty had been signed rather than before it? I hope very much that we shall not do that.

It seems to me that on this occasion there must be a preliminary debate on the nature of the changes to the institutions of the Community which 1996 will usher in. Those changes should be debated fully in this country on the basis of a government White or Green Paper setting forth proposals which we should be able to discuss in this Parliament. Will that happen? I gave the noble Viscount notice of that question. Is there to be a White Paper and, if so, when?

With regard to further enlargement, the Corfu council announced in the presidential report that it would welcome the accession of countries from Central and Eastern Europe. That is an extremely important and significant statement. The position of the Visegrad countries is clear. One of the most crucial political challenges of today is that we endorse, consolidate and confirm the political and economic reforms that are taking place in those countries. In my view, we can do that best by incorporating those countries as quickly as possible within the Community and by ensuring the security of their boundaries.

Therefore, I was rather disappointed by the sentence of the Corfu council which stated: The institutional conditions for ensuring the proper functioning of the Union must be created at the 1996 Intergovernmental Conference, which for that reason must take place before accession negotiations begin". That means that far from accelerating negotiations with regard to accession of the Visegrad countries, the Corfu council has postponed them. I cannot help but regard that as a retrograde step.

While I believe most firmly and strongly that rapid accession of those Central European countries to the Community is a primary and extremely important political step which we are wise to take, further enlargement needs careful consideration. I am wary of going too far too fast. I am wary of exciting expectations in such countries as Bulgaria and Romania of early accession. We must take into account what I can only describe as the digestive capacity of the Community: its ability to absorb other countries, other traditions and cultures. We should learn the lessons of Greece which has hardly proved to be an easy partner, partly because of its totally different traditions and partly because of the absence of an administrative infrastructure necessary for a country to fulfil the conditions of membership of the European Union. Therefore, while I press for acceleration in the case of the Visegrad countries, I should advise caution in the case of those other countries.

Finally, I regret that this debate on an extremely important subject, which will dominate our discussions in this country over the next few years until 1996, should have been slipped in rather late last week. That has meant that many noble Lords who would have liked to have taken part in the debate are not able to do so. I regret that that took place at such short notice. The noble Viscount will notice how few noble Lords on his Benches are taking part in the debate. That is surely not because they are not interested but because notice was so short. I believe that that is regrettable.

4 p.m.

Lord Monson

My Lords, perhaps I may first, from these Benches, also extend congratulations to the noble Viscount, Lord Ullswater, on his appointment.

I believe that nearly all of us would agree that friendship and respect between nations, and the citizens of those nations, are not in any way dependent upon the existence of a close political and bureaucratic alliance between the nations concerned. Indeed, the opposite may be the case. Political infighting often destroys good will.

There are many people in continental EC countries, some of whom I have met, who believe that you have a moral duty to favour fellow EC countries and their nationals over others; for example, that it is not communautaire to take the side of Macedonia against Greece or the side of New Zealand against France in, for instance, the "Rainbow Warrior" incident. But here we—and by "we" I include most Euro-enthusiasts as well as Euro-sceptics—do not, I believe, feel under any moral obligation to prefer the Germans to the Swiss, the French to the New Zealanders, the Belgians to the Poles, the Danes to the Norwegians, the Greeks to the Turks or the Luxembourgers to the Americans merely because the first named of each pair are EC or, if you prefer, EU citizens and the second named are not.

The affection and respect that we have for the applicant nations and their people and the ties of history, geography and, in some cases, of distant kinship that bind us to them, antedate the formation of the EC by decades, if not centuries. It follows that any reservations that may be expressed about whether the accession of those four countries is good for them, or for us, in no way invalidate that affection and respect.

Bearing in mind the fact that those countries, like us, are already members of the European Economic Area, in which of course we have free movement of goods, services and people, the decision about whether it is right to join the EC must be evaluated on purely pragmatic grounds. That is what is actually happening at present in Austria, Norway, Sweden and Finland. Emotionally, there seems to be no overwhelming enthusiasm to join the Community in any of the applicant countries—and I stress the word "emotionally"—yet in one of the four countries there is a well-justified fear of Russian military might which is, perhaps, not threatening in the short term but is certainly so in the medium and long term. In another of the four, there exists the fear of German economic muscle and the possibility of attendant economic bullying. For those very practical reasons their electorates are likely to vote "yes" as the lesser of two evils as they perceive it; indeed, one of them has already done so. The other two countries face no such threats, which is why the outcome of their respective referendums is much more in the balance.

It may seem almost academic to ask whether the accession of those four countries will be good for us here in the United Kingdom, given that the exercise of ruthless Palmerstonian national self-interest would not be realistically possible in this case. Since, therefore, it is certain—that is, as certain as one can be—that the Bill will be enacted, some may argue: why stir things up? However, I would contend that reality should always be faced up to.

The Prime Minister and the Government contend that accession would be good for Britain. One wonders why. At least two of the countries concerned—and I do not need to spell them out—are permeated by a deeply Left-wing ethos which the occasional election of a non-Socialist government does nothing to dissipate. Allied to that, they are politically correct to a degree unknown outside North America or pails of urban Australia. Moreover, at least three of the countries are obsessively green in the political sense and, therefore, expensively so.

None of that matters in the slightest to us at present: it is entirely their own affair; they are independent countries. But once they join a Community which gives them the power (in conjunction with others) to impose those patterns of behaviour upon us, it will matter very much indeed. Against that, it is claimed that the applicant nations, like all right-thinking people, oppose corruption and fraud in the Community and the paying of illegal subsidies to national airlines, and so on. Whether adding their voices to the chorus of disapproval would make any practical difference remains to be seen. It is also claimed that the United Kingdom would save on its budgetary contributions. Well, we have heard that sort of thing before: I wonder whether we might be in for some sort of disappointment.

There is also the not inconsiderable matter of the effective weakening of our national veto under the adjusted qualified majority voting system. However, when all is said and done the die is cast. We can only hope and pray that the countries concerned make the right decisions both for their sake and ours. When I say the "right decisions", I mean not only as regards their referendums but also subsequently, should they decide to join the Community.

Let us not forget that a good neighbour is the one who gives help when it is needed but is otherwise discreet and minds his or her own business. In contrast, a bad neighbour, by common consent, is the one who is prying, interfering and bossy. So many features of the EC as it operates at present seem expressly designed to stir up animosity between neighbours rather than fostering friendship between them.

In his opening speech, the noble Viscount claimed that all four applicant countries favour the maximum degree of subsidiarity. Of course, one is pleased to hear that. If the accession of some or all of those countries were to coincide with a really substantial return of powers to nation states in every field other than those with a genuinely supra-national, cross-Community aspect, the future would look a lot rosier. But the operative word is "if".

4.7 p.m.

Lord Bruce of Donington

My Lords, this afternoon's debate on the Second Reading of the Bill reminds us that the accession of the countries concerned concluded in the conference at Corfu. We were reminded by the noble Lord, Lord Bonham-Carter, that a reflection group was formed on the island which, so to speak, would think out further developments and take a general resume of the events of the past few years so as to arrive at an assessment on reflection—which is an intellectual process requiring leisure—of what ought to be done next.

I would commend that to your Lordships this afternoon. In other words, perhaps we ought also to reflect at the same time as those august thinking sessions are taking place. It is wise that we take stock. In saying so, perhaps I should stress to the noble Viscount immediately that, speaking at any rate for myself and my friends in various parts of the House, I would not dream of opposing the Second Reading of the Bill, although I may have some observations to make in Committee.

It seems to me that we have made a large number of presumptions. In particular, member states have done so in setting forth how they propose to enlarge the Community and to think out the various institutional changes that they may believe are necessary. One of those presumptions—which I venture to suggest many noble Lords in all parts of the House have made—is that since 1972 at any rate the Community has prospered; that the Community has in fact delivered and that it has been a success. That thought obtrudes itself into all government thinking. That is taken for granted. It has almost become self-perpetuating: how successful the whole thing has been!

Indeed, the right honourable gentleman the Foreign Secretary, talking in another place on 11th July last, referred to the Single European Act in 1986. He said that it, marked a new stage in the development of the Community. Its businesses were gradually able to operate on a truly European scale for Europe-wide growth and prosperity".—[Official Report, Commons, 11/7/94; col. 688.] He also said at col. 687 of Hansard: We should not treat our success in the European Union as a commodity that we hoard to ourselves". He gave that as a reason for extending membership of the Community to these four new members.

What constitutes prosperity? What constitutes progress? Let us pause a little and think about it. Is it the success of politicians or of bureaucrats in achieving targets? Does it consist of the volume of legislation or regulations issued? Does it consist of the colossal number of conferences that are held from time to time throughout Europe? If the success of the European Community were to be measured by the tonnes of computer tape and the tonnes and tonnes of paper that emanate from it and the acres and acres of space occupied by politicians, civil servants, bureaucrats and their supporters, boy oh boy, we should all be a resounding success in Europe at this time. We should have krugerrands almost oozing out of our back pockets. If we were to measure success by the self-adulation which I am afraid is widely prevalent among those who seek to portray themselves as the leaders of Europe or as the heads of the bureaucracy, and, I repeat, if prosperity is to be determined on those lines, we have been very wealthy indeed since 1972. But what is prosperity? Prosperity surely means a growth in the material and spiritual wealth of the people, not of paper.

Now what has happened in Europe? This has to be faced by those who do not want to hear it; and probably it will go in one ear and out of the other even as I utter it. But economic performance in Europe has been far below that in Japan and in the United States. Unemployment is running at a level which it will be impossible to reduce unless in Europe output vastly in excess of what is anticipated is achieved. Unemployment is currently 20 million.

Our share of world trade in Europe as a whole has steadily diminished. The French may say that that is a sign of success. But even speaking from within the restricted profession of accountancy, I can tell them that it is not: it is a sign of failure. But until people realise that, there can be no way of determining just how we are to proceed in Europe.

Of course the effects of that have been seen in the United Kingdom itself. Is it success, from the United Kingdom standpoint vis-à-vis the European Community, that in the past 12 years we should have suffered a £70 billion trade deficit with the remaining sections of the Community? Is that success so far as we are concerned? I would not have thought so. Is it a success that we still have a level of unemployment twice what it was in 1979? Is it a success as regards our participation in Europe that we now have poverty levels greater than they have ever been? Is it a success that since 1979 the top 10 per cent. of the population should have had their incomes increased by 62 per cent. whereas the poorest 10 per cent. have suffered a decrease of 17 per cent.? Is that a success; or if it is, is it a civilised success?

Is it a success that our investment in industry is running at even lower levels than it was in 1979? Is that a success for Europe and the United Kingdom as a whole? Is it a success that we should today be screeching about competitiveness due to the fact that the freedom of movement of capital has resulted in vast sums being invested, not necessarily in Europe or even in the United Kingdom, but in the Pacific Rim countries, whose labour costs are but a fraction of our own? The answer we are given there is that we have to improve our competitiveness.

I raise these points because it is wise that we should not have this auto-intoxication with some notion of success which is only in the minds of interested politicians and bureaucrats, and some bankers and some financiers, but which bears no relation to fact. I am not saying for one moment that all these things are due to the operation of the common market. I am not trying to blame anyone for the steps that were taken to bring the nations of Europe together. I am not complaining about that in the slightest. There is much to be said for developing co-operation among all the member states in Europe in promoting commerce, trying to remove restrictions and doing all of those things.

Where then have we gone wrong? We have gone wrong precisely because we trusted certain others. When the Treaty of Rome was devised earlier on, and when we joined in 1972, we assumed that bureaucrats, who are quite necessary—the Commission and so on—were going to behave in a manner which would encourage the increase of total wealth in Europe. It was quite proper that we should assume that. We assumed it in good faith. We assumed that all bureaucrats acted in good faith. Where we made the mistake was that we did not make the bodies concerned accountable to anyone at all. We did not make the Commission accountable to anyone. We did not make, in the initial stage, the European Assembly accountable to anyone. Indeed the European Parliament—as it eventually called itself and to which we conceded—is still not accountable to anyone.

Anyone who thinks that the European Parliament—in which, as regards Germany for example, one Member of Parliament represents every 800,000 people, or as regards the United Kingdom there is one to every 500,000 people, as compared with one to 60,000 people in the small state of Luxembourg —is accountable to anyone is mistaken. That is a lot of nonsense. In the United Kingdom there is accountability because we have constituents, albeit 500,000 of them, and so has the Republic of Ireland. However, in the rest of the Community the Members of Parliament who are meeting in Strasbourg, Brussels or Luxembourg, or in various other venues, are not accountable to anybody because they are chosen from a list. They are responsible to nobody. In some cases—but not every case—they are political hacks, selected in back rooms by party organisations. Until we realise that we shall get nowhere at all.

Bureaucrats who have power but who lack accountability will play merry hell with any organisation. And so they have with the Commission itself. I shall give some examples.

All that the qualified majority ruling has done is to make quite sure that the Commission, by its manoeuvring, can get anything it wants pushed through by means of sufficient inducements given by it personally to a certain number of states. It sets one member state against another.

A concrete example of that is the European budget, to which this country pays £2 billion net after all abatements and receipts. The Council of Ministers has no control whatsoever over the budget. The budget is decided by reason of a limitation in the earlier part of an inter-institutional agreement. Once that has been agreed, all discussion on the European budget is coincidental. If the noble Viscount says to me, as I hope; he will if I am wrong, that the United Kingdom could go along to the next meeting of ECOFIN or the budget council and propose reductions of £100 million or £500 million, I shall tell him that he is wrong. He knows that I am right. The Government have no power. The budget has been sewn up by the Commission. And we should not forget that we pay more than £2 billion a year towards that budget.

Those are the issues which have to be addressed in quiet reflection, or as a group, over the period before the 1996 budget. We have to consider how the powers of the Commission and the existing Parliament can be brought into conformity with the elementary requirements of democracy and accountability. That is the total problem. I have no reason to suppose that it cannot be done. We have an inferiority complex about this at the highest political level in our own country.

I observe that, notwithstanding our support for M. Santer as the new commissioner, he was; not averse, even before he was appointed, to attacking the United Kingdom without so far as I can see any demur from the British Government. In fact if noble Lords listen as I do, and as they must occasionally, to their own Prime Minister when he has broadcast in the morning they will have found that on at least two occasions last week he made the psychological slip of referring to the President of the Commission as the President of the European Union. That is psychologically very interesting indeed.

Until we begin to assert ourselves a little, without necessarily being offensive—and noble Lords know me; I am always as gentle as I can be on these occasions in spite of my enthusiasm—and unless we stand up for ourselves as men, where are we?

My noble and learned friend implied in his opening remarks that somehow I was out of phase with my party. As noble Lords know, I am all for cementing the coalition that has emerged between the Government and my own party in connection with this matter. However, I am bound to draw the attention of the House, and particularly the attention of my own Front Bench, to a statement made by the Front Bench foreign affairs spokesman in the Shadow Cabinet in the other place on 11th July. He said: Let me state clearly and unequivocally that we stand for a Europe of nation states". I agree. He continued: We do not support a federal Europe, as the right hon. Gentleman wrongly asserted many times and the Conservative central office hand-outs lied time and time again during the European election campaign. Nor do we have any intention of abandoning Britain's right of veto. I say that so that the right hon. Gentleman hears it again from me at the Dispatch Box, as he has heard before, in the hope that from now on he will not continue to repeat falsehoods about Labour Party policy as, regrettably, he has done in the past".— [Official Report, Commons, 11/7/94; col. 703.] There is, of course, scope for reinterpretation of that statement, but on the face of it I am bound to say that your Lordships differ. I should like to know where my noble and learned friend stands on the issue in confirmation. It would be most refreshing.

Lord Archer of Sandwell

My Lords, I am grateful to my noble friend for giving way. Can he specify anything which I said which was inconsistent with that statement?

Lord Bruce of Donington

My Lords, yes, I can. I can specify many things. My noble and learned friend favoured further integration in Europe. He said that many times.

I shall not weary the House further except to say that the noble Viscount referred to visions. I too have a vision. Having been a member of my party for nearly 60 years my vision is for a country which develops democracy, which eliminates the worst extremes of poverty and wealth, which gives a reasonable sense of security to its people and pursues policies designed not for the aggrandisement of politicians or bureaucrats but for the happiness of its people. Those are the visions which I have for Europe and for my own country. I commend them to the House.

Lord Brain

My Lords, before the noble Lord sits down perhaps he will explain why he addressed all his remarks towards these Cross-Benches, the Benches in this House with least responsibility and whose occupants bear no political allegiance to any side.

Lord Bruce of Donington

My Lords, I shall answer that question immediately. The fragile person that I am, I normally try to look to my natural sources of support as a counter to my nervousness in the course of any remarks that I may make.

4.27 p.m.

Lord Finsberg

My Lords, it is good to have confirmation that the noble Lord, Lord Bruce, does not look to his own Benches for that support.

This is a time for baring souls. It is now two decades since, in the other place, I voted for the European Economic Community. Why did I vote for it on that occasion? I did so because I felt that it was the best way of preventing Germany and France from taking Europe into a third world war by enmeshing their economies. I thought no more widely than that. It was a view shared by a substantial number of the population. I have not changed my mind about that reason, but there are now further reasons why I believe this Bill should be supported.

My noble friend Lord Ullswater started the debate in a superb fashion. He painted a picture of what was decided at Corfu and how it would operate. He mentioned in particular the majority voting of the IGC, which the noble Lord, Lord Bonham-Carter, clearly did not hear. He was followed by the noble and learned Lord, Lord Archer, whose speech again exemplified the type of speech I have heard him make over the years— sound, sensible and practical. We do not always agree, but on this occasion I believe that we do agree.

I am concerned, as I always have been, about widening of the Community. I believe that there is a difference between widening and deepening. As your Lordships will know, for more than 10 years I have held membership of the Council of Europe. During that time my meetings with politicians and parliamentarians from Eastern and Central Europe and from Scandinavia have all led me to one conclusion; namely, that they desire to come into what is now the European Union. Certainly my Austrian and Swedish friends take a strong view on that accession. If, as I hope, Sweden, Finland and Norway give an affirmative vote in the referenda, I do not think that it will be long before Iceland also wishes to apply. That will be good because I take the view that the accession of those members will be good for the United Kingdom.

I do not make any excuse for being nationalistic on the issue. We have always fought hard for the observance of the legislation that we have passed. That distinguishes us in many cases from some of our fellow members of the European Union; and the Scandinavians take that view strongly.

However, there was the probability—not the possibility—of the Visegrad countries and other states in the former Warsaw Pact area wishing to join the European Union. The European Union has made clear that, apart from the problems of the economy, agriculture, the increase in the wine lake, or whatever it may be, one of its prerequisites was that democracy had to be practised in those countries. What I call the seal of good housekeeping in that field could only be given by the Council of Europe in the work that it does on human rights and on multi-party parliamentary democracies. I have no hesitation in saying now, in your Lordships' House, that both Poland and Hungary qualify for membership of the European Union on those grounds. Other member states are well on the way, but those two countries are well ahead of the field. I hope that they do not have to wait too long. Equally, I hope that others who have passed the test on human rights will soon have the opportunity of joining.

Mention has also been made of the European Assembly, now the European Parliament. I share the view of the noble Lord, Lord Bruce of Donington. I do not believe that that body is yet in a position to do the job that it should do. It should be controlling the bureaucracy of Brussels, and it does not. I tell noble Lords why, in my view, that is so. That body is unrepresentative. It cannot represent the vast hordes of populations which at present it has to look after. Its members have little or no contact with their national parliaments. I believe that the two political parties of this country made a great mistake in regard to membership of what was then the assembly and now the European Parliament by rejecting dual mandates. I have said before, and I repeat, that we in this House have a unique opportunity of redressing that democratic deficit. Yet again I advocate that Members of the European Parliament, like Lord Bishops, should be Members of this House so long as they hold their seats in the European Parliament. That would at least give them a link. It would give us the opportunity of hearing what they have to say. It would give them an opportunity of knowing what we have to say. I hope that that idea might be taken up even if discussion has to wait until the IGC.

However, a second point was raised, I think by the noble and learned Lord, Lord Archer—it might have been the noble Lord, Lord Bonham-Carter—that the Council of Ministers might become the senate of the European Parliament. I do not believe that that can possibly be right. The Council of Ministers, the Commission and the Parliament are three separate bodies. But there is a need for a second Chamber, and that second Chamber already exists in embryo in the Council of Europe. If in the referenda the final three join, 16 countries will be represented by members of their national parliaments. We already have membership from 32 nations. As the European Union widens, as it must, it would be perfectly easy to devise a system such as that of the old Greater London Council which had a separate statutory body for education—ILEA—and only those members representing the inner London area were able to vote on education matters. In exactly the same way, only those members of the Council of Europe whose countries were members of the European Union would be entitled to vote. I suggest that that system would give the opportunity for two voices to be heard and to control the bureaucracy. There is a real need for the bureaucracy to be controlled.

Comment was made that there was not much support for the Bill from these Benches. Frankly, that is because the case is so open and shut. I was surprised that I wished to take part. I have done so in order to float those two ideas. But I am perfectly certain that the Bill is a correct way forward. I hope that the Foreign Office will take on board some of the ideas that it will need to consider well in advance of the IGC. It is important that that IGC represents the view that we in this country have been expressing for many years about the future of Europe.

4.36 p.m.

Lord Stoddart of Swindon

My Lords, I, too, welcome the noble Viscount, Lord Ullswater, to the debate. We are accustomed to him and much appreciate the manner in which he carried out his duties as Chief Whip. I wish him well in his new duties; I hope that he enjoys them.

I wish too to express my appreciation to my noble and learned friend Lord Archer of Sandwell for paying me the compliment of consistency. I pay him the same compliment. He, too, has been consistent since voting against a three-line whip and supporting the government that took us into the Common Market. But for his action, and that of 68 others, we probably would not have joined. However, he has been consistent in his support over a long period of time.

The longer we have been in the EC, the more I believe that the view I took in 1972 and in 1975 is confirmed. We should not have become a member in the first place; or we should have withdrawn as soon as we possibly could. The baleful effects of our membership on this country are plain for everyone to see. They were outlined by my noble friend Lord Bruce of Donington.

My noble friend Lord Bruce of Donington said that we would not divide the House. He should not be too sure about that. I have not made up my mind whether I shall seek to divide the House. I have to tell him and the House that I am opposed to the Bill. I do not believe that it is a good Bill. Nor do I believe that it is good that we should have these four countries joining the European Union. I do not say that because I have anything against them. I feel for them; I have great consideration for them. I do not want them to be confronted with the baleful effects which this country has experienced since 1973. They are prosperous countries which have been doing extremely well outside the EC. Frankly, I wish to protect them from the baleful effects of membership.

My noble friend Lord Bruce of Donington pointed out that although in 1972–1973 we were promised that the Common Market would be good for British trade, our total deficit in trade has topped £70 billion since we joined. I believe that his figure may be a little modest; it is probably about £97 billion. So as to being part of a trading organisation, we have received no trading benefit. Indeed, quite the reverse. What we have done is neglect other markets that we should have been building up over that period of time.

Lord Archer of Sandwell

My Lords, I am most grateful to my noble friend for giving way. Having regard to the fact that some 14 years of that period has been a period of Conservative government, does he think that factors other than the EC may have had some effect?

Lord Stoddart of Swindon

My Lords, I am sure that there are other factors. I fear that they do not account for £97,000 million of deficit. And, of course, there was a Labour government in power in between. We should take that into account as well. I agree with my noble and learned friend that the effects might have been mitigated had we had more years of Labour government and fewer years of Conservative government.

In addition, the cost to the Exchequer has been enormous. We have paid about £20,000 million in net terms to the EC for nothing at all. As I say, it has not assisted our trade. It has damaged our agriculture. We have land set aside which used to grow food. The environmental effects of increased nitrogen on our rivers have been very bad. It is very difficult to find any benefit. But the cost has been £20,000 million.

The noble Viscount, Lord Ullswater, said that the Bill represents a good deal for Britain; that three out of the four countries will be net contributors; and that this country will save £300 million over six years. That amounts to £50 million a year. But our net contribution to the EC will double from £1,750 million this year to £3,500 million next year; and indeed the year after. It will go on increasing. I fear that the incoming countries will find exactly the same thing happening to them: their economies will not be assisted and they will find themselves paying more money across the exchanges for what is a bureaucratic nightmare.

The idea that by adding more countries to the EC the more likely it is that the British way will gain ground is nonsense. The idea that adding countries will mean less bureaucracy has not been proved in practice. Indeed, the accession of Spain, Portugal and Greece resulted in more centralisation and more bureaucracy. I fear that exactly the same will happen when the four new countries are introduced to the Community. I believe that they will provide further impetus towards the Euro superstate which will be dominated by a centralist and authoritarian Germany. The accession of new members so far has resulted in more power to the institutions of the EC. During that period there has been a growth in the new political elite, remote —and they have been remote—from the people they are supposed to serve.

In his excellent speech my noble and learned friend suggested that it may be the case that his view finds more support among Labour Party supporters than mine. I do not know about that. During the Maastricht debate, not only in this House but throughout the country, there was the opportunity to hold a referendum and to consult the people on how much further they wanted to go towards an integrated Europe. Unfortunately, his party—and my party—refused the people of this country the opportunity to say exactly where they stood in regard to further progress towards integration and a centralised European state. I hope in future, when I and others suggest that we should have a referendum, he will support us. I hope that he wants to see this country governed, not by the new political elite, but by the people of this country through a Parliament elected by the people of this country without interference from outside.

Lord Archer of Sandwell

My Lords, I am grateful again to my noble friend. I apologise for being tiresome. But our mutual noble friend Lord Bruce quoted Dr. Cunningham's intervention in another place on 11th July. No doubt my noble friend has seen what he said. He made it quite explicit that he certainly did not exclude the prospect of a referendum if otherwise that seemed to be appropriate.

Lord Stoddart of Swindon

Yes indeed, my Lords. I was very pleased to see it. What I am doing is encouraging the process. I hope that my noble and learned friend will help to take the process forward. He is a man of great influence within the Labour Party and with the Front Bench.

This country and this Parliament have over the period given more and more of our powers to institutions of the European Community. The Single European Act gave more power in relation to qualified majority voting. The Maastricht Treaty handed over further powers relating to internal affairs, including immigration policy and policing. It gave over more consultation concerning defence policy and foreign policy. Above all, it gave more power to the European Parliament. And as we see, that body is now flexing its muscles as it has never flexed them before. We saw what happened over the Santer affair. Having tasted power, it now wants more. Having got more power, it wants to exercise it in an even greater and more influential way.

The leader of the so-called socialist group in the European Parliament, according to a radio programme, wants to see the European Parliament as the 13th state, with a power of veto —a power of veto, mind you— over elected governments. It sounds all very well while we have a Tory government to say, "Yes, let's have a go at the Tories. Let's show 'em". But what happens after two years of Labour government when the position in the European Parliament is perhaps reversed and there are 62 Tory members and only 18 Labour members. What happens then? Will we be happy to see the decisions of the properly elected government of this country set aside and overturned by a bunch of Tories operating through the European Parliament? I think not. That is why we must be extremely careful about giving further powers to that body lest it should misuse them against a government of this country elected on an economic, political and social programme that has been put before the people of this country at a general election and elected on the basis of 75 per cent. to 80 per cent. of the vote, and not on the basis of 36.4 per cent.

Let us keep those matters very much in mind when we consider admitting additional countries to the European Union. In fact, I believe—I am not at all sure that people will believe me but I believe it—that the European Parliament is probably a fifth column which wants to destroy the nation state. Indeed, a glance at the constitution which it has drawn up and which was mentioned by the noble Lord from the Liberal Benches makes very clear to all who read it where it wants to go; namely, the destruction of the nation state.

Finally, this country's destiny does not necessarily lie in Europe. This country's destiny has always lain in the world, not in one particular part of it. Europe is becoming an industrial and trading backwater. The action is taking place elsewhere. It is taking place in China, Japan, Australia, Taiwan and the Americas, north and south. That is where the great opportunities lie—not in Europe. We need to turn our trading attention there. Those are the partners we want. Unfortunately, our ability to find those partners is being injured by membership of the EU. That is why I say to the Government and indeed to my own party that this country is crying out for leadership. The British people believe that their leaders and politicians should be at the heart of Britain and at the heart of the world, not merely at the heart of Europe.

I implore our politicians to remember that they represent the people of this country—the people who vote for them and sustain them in office. Their prime duty is to defend this country not only militarily but in respect of standards of living and the political institutions of this country which have been built up over centuries and which have been an example to the rest of the world. If we have politicians who do that, they will regain the respect of the British people which they have lost over the past 10 to 15 years.

4.52 p.m.

Lord Annan

My Lords, although my name is not on the list of speakers I rise to my feet because I was stunned by the speeches of the noble Lords, Lord Bruce of Donington and Lord Stoddart of Swindon.

I much admire what the noble Lord, Lord Bruce, has done in this House for many months now. He has educated us all in some of the diseconomies of the common market. He reminds me very much of that fine rugby footballer, the full back and captain of Scotland, Mr. Hastings. Gathering the ball on his own line, he breaks through five or six tackles of the opposing pack as they thunder down upon him and kicks for touch just as he reaches his own 22 metre line. He is a fine performer. The noble Lord, Lord Stoddart, whom I have listened to many times, does not remind me exactly of a rugby footballer. He is more like one of the surgeons in our teaching hospitals in London, who makes an incision and takes out the putrid organ from the abdomen to the delectation of his medical students. They are a formidable team. But they do not convince anyone of my generation.

Both noble Lords attribute all the ills of our economy to the fact that we joined the Common Market. I attribute many of the ills of our economy—but not all— to the fact that in the late 1940s and 1950s we failed to join Europe, we failed to take command of the Common Market and we failed to impose some of our ideas on it. Mr. Bevin was a great foreign secretary; Sir Anthony Eden and Mr. Butler had their chance; they all turned down the opportunity for us to lead Europe. That is what has gone wrong.

There is a great distinction between European countries and ourselves in the way in which we manage the business of the state. In European countries that is subject to the Napoleonic Code, whereas we have our common law system. There is a great difference between those two. That is one of the reasons why we find it so hard to get into Europe.

With our common law system goes a very great respect for local government and for making trouble. Nobody makes trouble better than the noble Lords, Lord Bruce and Lord Stoddart. They make trouble with great experience of having done so all their lives. They know how to put a spoke in the wheel and get across the individual's point of view. That is something which is not so well understood and not tolerated in Europe. If noble Lords have ever tried to get change out of the Parisian police, they will have found that they were up against an unyielding and tough body. It is true that in Europe there is not the same respect for individual rights.

But when we come to the question of rival economies, let me ask which have been the economies which have fared best in the past 50 years. We have to accept that our own ways of doing business do not seem to have been so effective as those of our European colleagues. I think I heard the noble Lord, Lord Bruce of Donington, say that things were sewn up in a most unfair way in the coulisses of European bureaucracy. I was astonished. In all his long time in politics does he remember times in the smoke-filled rooms of the Labour Party when things were not sewn up? Politics is a matter of sewing things up.

Lord Bruce of Donington

My Lords, the noble Lord was kind enough to mention me on a number of occasions and I am very glad to have merited some of his attention. I have never been part of any smoke filled room conspiracy. I am by nature a loner. However, perhaps the noble Lord would help me in my quest for the truth. Perhaps he would address a question to the Government as to how they come to claim that we have recovered sooner than anybody else in Europe and are in fact a better economy than the remainder of Europe. The view seems to be slightly different from the one that the noble Lord puts forward.

Lord Annan

I am not answering for the Government on this matter. I am trying to make a point in contradistinction to the noble Lord, Lord Bruce. Perhaps I may move to another point.

Lord Stoddart of Swindon

Before the noble Lord moves towards that point, is he aware that during the 1980s the British economy increased year by year to a greater extent than most of the economies of Europe, including Germany? Is he further aware that our joining the ERM and having to come out of it with such ignominy and dishonour caused the greatest slump that we have had in this country since that between 1929 and 1931, and from which we are only just recovering?

Lord Annan

I am fascinated to hear the noble Lord, Lord Stoddart, giving such a fine encomium to the Conservative Government's policies in the 1980s. One of the reasons why our economy boomed in those days was because it came from a rather sticky base-line in 1978–79.

With regard to whether or not these other countries should join, I can tell the House this. I was dining the other evening with Herr Heinrich Treichel. Twenty years ago he was the head of the Credit Anstalt in Vienna. At that time I listened to him in Chatham House giving a talk as to why there was no need for Austria to go into the Common Market. The other night he was entirely in favour of his country going in. He felt that there was no alternative.

I must emphasise that point. What other alternative do we in Britain have than to be part of the Common Market? The other evening I was part of a posse of British and German historians discussing in the German embassy the future of Britain in the Common Market and how we related to Germany. One or two British historians said that they felt that we ought to keep out. That was certainly not the view of the majority of us. But the point was put to us time and again by our German colleagues: what other alternative is there?

I am the last person to think that historians have any merit in being able to foresee the future. They sometimes have something reasonable to say about the past, but they are no good at all in seeing the future. Nevertheless, it is an act of faith that we must stay in the market and do better than we have in managing our affairs within it. I believe that the expansion of which the noble Viscount, Lord Ullswater, is asking us to approve gives us another chance because we are going into a different situation. The noble Lord, Lord Bonham-Carter—and I believe the noble Lord, Lord Finsberg, said the same thing—was correct to say that this is a time when we must rethink the institutions of Europe, when the numbers are about to increase. What was good for six cannot be good for an indefinite number. I hope, therefore, that the House will commend the Bill before it.

5.3 p.m.

Viscount Ullswater

My Lords, I want to begin by recording my grateful thanks for the welcome given to me by the noble and learned Lord, Lord Archer of Sandwell, the noble Lord, Lord Bonham-Carter, and other noble Lords around the Chamber. I am deeply grateful for the personal thoughts that they transmitted to me.

This Bill will permit the United Kingdom to ratify the Treaty of Accession and so allow four new members to enter the European Union. These new members are stable democracies which will bring added strength to the Union. The treaty marks a milestone in the history of Europe and a milestone on the way to a more secure and prosperous Europe.

The terms on which the new members are acceding represent a fair and acceptable balance of advantage to them and to the existing members of the Union. The people of Austria have already voted decisively in favour of accession, and we hope that the people of Sweden, Finland and Norway will make the same decision. If they do not, the treaty provides for the accession of only those who do wish to join.

But the fact that we are debating this Bill now, and the fact that other countries are already waiting in the wings with applications to join the European Union— Turkey, Cyprus, Malta, Poland, Hungary and others yet to come—show that the European Union is the centre of gravity of present-day Europe. That is where we want it to be.

Britain has played its full part in promoting and encouraging the accession of these countries. In doing so we have received a heartening echo to our determination that Europe should not become a super-state and a fortress, but a house with open windows and doors, in which individual member states take advantage of the benefits of co-operation and eschew the vision of centralised regimentation. Europe will gain in variety and flexibility from the entry of these four new members. And we can only gain from that.

I turn now to the points raised during the course of the debate. First, I am appreciative of the welcome given to the Bill by the noble and learned Lord, Lord Archer of Sandwell, from the Labour Front Bench. I recognise his personal long commitment to the European concept. Noble Lords will appreciate that, whereas he may have concerns in relation to food mountains and the treatment of guestworkers —and many of us share those concerns—he has a long personal commitment, perhaps on occasion to the expense of his position in the party. However, I am prepared to acknowledge that.

The noble and learned Lord indicated that he welcomed the concept of a more open vision on Europe and that the entry of the four new countries would assist in opening up that vision. We need to change some of the rules, especially for the CAP—I believe those have been dealt with—particularly for the difficult problems that the new countries experience in the ways in which they have been dealt with in negotiations. We are all keen to see that the future of the CAP should be considered carefully.

To turn to one of the points made by the noble Lord, Lord Bonham-Carter, it is not a question of moving from one free trade area to another which prompts those countries to join; it is that they want a seat at the negotiating table. The Government understand and welcome that. For the reasons I mentioned earlier, we welcome the ideas and commitment that they will bring to it.

The noble and learned Lord, Lord Archer of Sandwell, was concerned that none of the countries should seek to maximise its own interests but that all countries should be committed to sharing in the Union across all its parts. That is something which we too welcome. He dealt also with the concept of widening and deepening the Union, and perhaps gave a warning that we shall need to look carefully at how the Commission will develop to cater for the new situation at each stage of widening and deepening.

I agree that the presence of the four new members within the European Union will help to bring in fresh ideas, particularly to the 1996 inter-governmental conference. I shall turn to that in more detail in a moment. The Government's view is underlined by our support for the accelerated accession negotiations to ensure that the four countries will have acceded to the Union and found their feet before the start of the IGC. We hope and expect that they will play a full role in the discussions in 1996.

The noble Lord, Lord Bonham-Carter, chided me for not mentioning the IGC in 1996. He was answered in part by my noble friend Lord Finsberg. But I should like to clear up what may be a confusion in relation to the agenda for the 1996 IGC. The agenda was established in the Maastricht Treaty and was extended by decisions taken at subsequent European councils—decisions taken by all member states; not only by the French, the Germans or the Danes, but by all member states.

The agenda includes the operation of the pillared structure; the size of Commission; defence; European parliamentary powers of co-decision; and qualified majority voting. The last item is important. It is on the agenda at this Government's request. We are already actively engaged in the planning for the 1996 IGC. We are aware that it will take place against the background of enlargement. We signed up to the Corfu conclusions following the June European Council which specifically linked the IGC and enlargement. The study group was established by the Corfu council to begin work in June 1995. No decision has been taken about whether the representatives of national governments will be officials or political representatives. That is something that we shall need to decide.

The noble Lord was also concerned about consultation with Parliament. Any treaty changes agreed at the 1996 IGC will be subject to approval by the Government. Additionally, as the IGC gets under way, there will no doubt be debates and Select Committee sessions in both Houses at which Ministers will be required to explain their policies. The noble Lord will understand that it will not be possible for the Government to reveal their entire negotiating hand, but we shall certainly try to keep both Houses in touch with our thinking. I should also point out that, as both the Prime Minister and the Foreign Secretary have made clear recently, we very much favour national parliaments feeding in their views to the 1996 IGC.

Lord Stoddart of Swindon

My Lords, I am most obliged to the noble Viscount. Are we really going to have this old chestnut of the Government not revealing their negotiating hand before we can all discuss the matter? Is he aware that what has happened previously is that, once the Government reveal their negotiating hand, they then come to Parliament and say, "You must not let us down. That is what we have agreed". Therefore, the Whips are on and everyone has to agree with what the Government have done lest they be accused of reneging on an agreement. Will the noble Viscount think about that and will he make sure that, far from not revealing their negotiating hand, this Parliament and this House will be kept informed at every stage of the negotiating procedure so that we may have some influence on the outcome?

Viscount Ullswater

My Lords, I believe that those are words which I have just uttered. I said that there will be debates and there will be Select Committee sessions in both Houses. However, noble Lords would not expect me to say that the Government will reveal everything that they intend to say when they go into a negotiating mode. The study group, which begins work in 1995, provides an excellent opportunity for this House to make its views known before the IGC itself gets under way.

At the same time as welcoming further enlargement, the noble Lord, Lord Bonham-Carter, was wary that we should go too far or too fast. He mentioned one or two countries about which he had some reservations. The United Kingdom warmly welcomes the Polish and Hungarian applications, which the noble Lord mentioned. The main challenge for both those countries is to prepare politically and economically for membership. The noble Lord, Lord Finsberg, also welcomed their applications and said that he hoped that Iceland would join very soon too. It would have to be for the Government of Iceland to apply to join the Union under Article O of the treaty. Some internal discussions are going on at present in that sense, but we gather than an application is unlikely to be forthcoming in the immediate future.

To go back a little, the Copenhagen conclusions established the broad qualitative criteria for membership: stability of institutions guaranteeing democracy; the rule of law; a functioning market economy; a capacity to cope with competitive pressure and market forces within the Union; and the capacity of the European Union to absorb new members —all the matters brought to our attention by the noble Lord, Lord Finsberg. These are the points that we should be considering, and enlargement will involve a number of institutional questions: QMV, which I mentioned in my outline statement; the number of commissioners; and the size of the European Parliament. We shall be discussing these issues with our partners over the coming years.

The noble Lord, Lord Monson, was worried about the principles that he saw may be involved in incorporating the four EFTAn countries. He declared them as having socialist principles and being more concerned about green and environmental issues. He asked why they should be good for Britain. I repeat what I said in my opening remarks. They will be net contributors to the Community budget. Norway, Sweden and Austria share our interest in budgetary discipline and value for money. They will want to make certain that we use the funds efficiently. They will argue for a free market, a free trade Europe, a market-oriented Europe, rather than a protectionist Europe. That is why I believe that the accession of those four countries will be good for Britain.

The noble Lord, Lord Bruce of Donington, asked us in his charming way to pause for reflection. He said that we were making some large assumptions here and he asked us to consider whether the Community really had been a success since 1972. What constitutes prosperity, he asks us; what constitutes progress? The noble Lord's sentiments are very sincere and well known, as echoed by the noble Lord, Lord Stoddart. But I am sad to hear that he shares none of the vision of his noble and learned friend on the Front Bench. I am sad about that because my experience is that Britain is a very favoured place for investments from Japan, the United States and Germany because we are in the Union. That is why we are a favoured state in that way—not because we are out of it.

Lord Bruce of Donington

My Lords, I am grateful to the noble Viscount. He started off by reference to my definition of prosperity. He skated over that beautifully and then talked about vision. Will he tell me where I am wrong in my assessment of what has happened to us economically and prosperity-wise in Europe and in the United Kingdom since the common market started?

Viscount Ullswater

My Lords, I have indicated that the noble Lord has his own views about these matters and that those views are sincere and well known.

Lord Bruce of Donington

My Lords, what I have said is a fact.

Viscount Ullswater

My Lords, the noble Lord may indicate that he believes that those are facts. However, I should like to paint a different picture of why I believe Britain is a favoured place for investment. I believe that that reflects the view that many hold about the high level of skills that we have and the favourable economic conditions in this country.

The noble Lord, Lord Bruce, mentioned the size of the European budget—a £2 billion net contribution per annum —as did the noble Lord, Lord Stoddart. The four countries with which the Bill deals will be net contributors, which can only reduce the UK's budgetary burden. The budget, and our overall contribution, are constrained by the own resources ceiling—a percentage of Community GNP. That is why the budget goes up and down, as the noble Lord, Lord Stoddart, will know. We ensured in the accession negotiations that the ceilings agreed at Edinburgh were not increased. Of course there may be some increase in administrative costs by the addition of three more official languages and spending on internal policies in the new member states, but once that has been taken into account the UK will seek to ensure that any extra headroom is used to reduce the burden on everyone else and not used to increase spending.

Apart from one or two points on which I have already commented, the noble Lord, Lord Finsberg, made the important suggestion that Members of the European Parliament should perhaps be considered to be Members of your Lordships' House. That is something on which we should reflect. I have heard what he said and I shall pass it on to my noble friend as a suggestion for consideration.

I believe that the noble Lord was concerned about potential reforms for the Commission in 1996. We would like to see an efficient and accountable Commission which concentrates on what it does best, regulates a single market effectively and is committed to the overall goal set by successive European Councils. We are confident that the new president of the Commission shares those aims.

We support a strong role for the European Parliament in holding the Commission to account. However, we are very aware of concern about the Parliament's democratic accountability. We are giving active consideration to a number of suggestions which are designed to address the problem. These include the possibility of a second chamber, perhaps made up of representatives of national parliaments. This idea and others will be discussed in the context of enlargement and the 1996 IGC.

The noble Lord, Lord Stoddart, has told us on a number of occasions that he would rather that we had not gone in in 1972 and that we should not be having this debate at all, whereas the noble Lord, Lord Annan, said that we should have gone in sooner. Both have views to which a great deal of weight should be given. The noble Lord threatens to divide the House. If that were to be the case, I would ask it to support me roundly in something which I believe will do Britain good when the Bill has been passed.

I have already indicated to my noble friend Lord Finsberg that we should consider the powers of the European Parliament very carefully. That is one of the areas that we should look at for the IGC in 1996. The Government have always insisted, and will continue to insist, that the Council and not the European Parliament is the policy-making institution of the European Union. Our policies will continue to be determined within that framework. The Government have also made clear on numerous occasions that national parliaments remain the prime focus of democratic legitimacy.

I apologise if many of the remarks I have made have been about the IGC conference in 1996, when in fact we are talking about an accession Bill for four member states. However, I believe that the debate has very much fixed on that concept, so it was quite right that I should deal with those concerns.

In asking noble Lords to support the Second Reading of the Bill today we are signalling a new stage in the history of our continent. The European Community grew out of the ashes of the Second World War, at a time when Europe was riven by ideological and political differences. Since the collapse of the Berlin Wall in 1989 we have been living in a different Europe, a different world. Austria and the Nordic countries are, we trust, about to join the European Union. Other countries in central, eastern and southern Europe are all seeking a closer relationship with the Union or accession to it.

Britain has been at the centre of this process. By giving assent to the Bill before it today, this House can ensure that Britain continues to play its full part in the development of the European Union and of the wider Europe.

Lord Bonham-Carter

My Lords, before the noble Viscount sits down, may I take it from what he has said that between now and the IGC conference we are not going to receive any outline of the proposals which the Government will take to that conference for the reform of the institutions of the European Union in the light of enlargement?

Viscount Ullswater

My Lords, I have sought to give the noble Lord a number of assurances that, not only in this House but through many opportunities within government and the work of the study group, concerns expressed among your Lordships and ideas for the reform of the institutions will have a wide airing before the 1996 IGC.

On Question, Bill read a second time, and committed to a Committee of the Whole House.