HL Deb 15 April 1996 vol 571 cc442-554

3.8 p.m.

Baroness Chalker of Wallasey rose to move, That this House take note of the White Paper on the British approach to the 1996 Intergovernmental Conference (Cm. 3181).

The noble Baroness said: My Lords, I am pleased that we have this important opportunity to discuss the IGC in advance of the first substantial meeting of Foreign Ministers in seven days' time. We much look forward to hearing the maiden speeches of my noble friends Lady Wilcox and Lord Bowness.

The British Government approach to the negotiations is set out in the White Paper A Partnership of Nations placed in your Lordships' House on 12th March. That document is a clear and comprehensive statement of our position. Our vision of Europe's future is enshrined in the title. We want to see a Europe of nation states working together in partnership to advance their national interests and to manage their shared aims. This is the reality in Europe today. It must develop and improve as the European Union tackles the crucial tasks associated with enlargement. The Intergovernmental Conference is about the mechanics of this process. It is about ironing out the incongruities and inadequacies of the European Union, and thus creating a machine which is leaner, more efficient and more effective, capable of taking us successfully into the 21st century; in other words, doing less better.

Previous conferences have been built around grand visions of concrete steps forward: in 1985 the creation of the single market; in 1991 the project of a single European currency. This time it is different. The aim of the 1996 IGC is to examine how far changes may be necessary to ensure, the effectiveness of the mechanisms and institutions of the Community",

just as the Maastricht Treaty stated. That involves a close look at the nuts and bolts but not a whole new engine.

So the aims of the conference are relatively modest. I can assure your Lordships that this is not a uniquely British perception: the study group set up to prepare the IGC expresses clearly in its report that the IGC is not designed—allow me to repeat "not designed"—to embark upon a complete revision of the treaty. This is the right approach. But the IGC is not the only item on the European agenda, so Europe must also face a whole series of important challenges which are related to, but largely outside, the remit of the IGC.

I have already referred to the crucial tasks associated with enlargement. The study group described this as the Union's most ambitious target for the next few years. We fully agreed. The opportunity to bring the new democracies of the East into the European fold is unique. We must seize it. It is our moral obligation to take this historic step because the central and eastern European countries need us; and because that integration into the Union is essential to secure the future prosperity and security of the whole of Europe, including Britain.

The prospect of enlargement brings with it the need to reform the agricultural and structural policies of the Union. The total present levels of CAP support and cohesion expenditure are already far too high and will be totally unsustainable in a union of 20 or more states. Business thrives when it pays continuous attention to competitiveness. In a very similar way, Europe will overcome her difficulties only by finding a productive way through this persistent lack of competitiveness. She will then successfully be able to compete with her transatlantic partners and with the Far East. That is the reality of the global economy in which we shall live in the 21st century.

Successful competition is equally important on a world-wide scale if we are to help to create jobs which Europe so desperately needs. In the UK we have seen how business-friendly measures of deregulation and reduction of non-wage costs have helped reduce unemployment steadily since 1992. Most of our European partners have not been so fortunate. We know that external competitiveness is an essential adjunct to flexible domestic measures.

The Community's financing arrangements fixed in Edinburgh in 1992 have to be reviewed before the end of the century. That is another major and complex task. There are some large choices for Europe to make on the move to a single currency. They must not be left out. By the Government's own action, Britain's position remains fully protected by the opt-out secured by my right honourable friend the Prime Minister at Maastricht. But we must, and shall, be ever watchful of the effects of others' wishes as well as our own.

The Intergovernmental Conference has just begun. It is only one in a series of negotiations which the Union is facing. As I have indicated, it is not even the most significant. By saying that we are not seeking to belittle the IGC's importance but to set it in the wider context.

Before looking in detail at some of the specific issues which the conference will examine, perhaps your Lordships will allow me to outline some broad principles which underpin the British Government's approach to Europe. First, the Government are wholeheartedly committed to a successful Britain in a successful Europe. As the White Paper shows, we are actively engaged in all areas of the Union's work. We want Europe to work better, to be more efficient internally and to play a more effective role outside its borders. In order for Europe to succeed, we are convinced that the nation state must remain the primary focus of democratic legitimacy in the Union. The Council is and must remain the prime decision-making body. It is for those decisions that Ministers are held to account by their own national parliaments. It is through national democratic institutions that the peoples of Europe can most closely identify with the whole European project.

In recent months we have heard references from some continental European leaders to the dangers of nationalism; to the threats that any resurgence of nationalism would pose to the European project. Such a threat must never be allowed to take shape. But let us not confuse a legitimate defence of the sovereign nation state of the 1990s with the evils of the nationalism of the 1930s. They are very different. We are by no means alone in Europe in stressing the pivotal role that the nation state must continue to play. Last month the French Prime Minister, Alain Juppé, said, the nation state remains more than ever the essential, central place where the democratic contract, the social and political link between citizens and their elected representatives, is fulfilled". There are some who argue for extensive integration, for dilution of the role of the nation state, as being necessary for the enlargement of the Union. The British Government do not agree, nor does M. Juppé. Nor even, we suspect, do very many of the countries which are aspiring to join the Union. Certainly, Vàclav Klaus, Prime Minister of the Czech Republic, does not. Allow me to quote from a recent address that he made in Paris. He said: We are convinced that even in the future the sovereign states will represent the original building stones of the European Union".

The second key principle is that the Union must respect diversity, not impose uniformity. There are, of course, areas where it is in our interest to integrate. The single market is an important example which has been a substantial benefit to all. But there are many more where the variety offered by the member states should be preserved; where the diversity that has evolved through differing traditions in different countries is a positive asset. The structures of the Union must develop in a way which can incorporate this diversity and allow it to flourish. Some people see uniformity, harmonisation and standardisation as necessary for Europe to work together. We reject that vision entirely, and many others across Europe agree with us.

I would ask the people who argue for greater conformity as a necessary precondition for enlargement to heed the words of those who wish to accede to the Union. Vàclav Klaus again spoke for many when he said: We do not want our state to be disintegrated in multi-national structures which have neither deep historical roots nor genuine identity. The strength of Europe is in its diversity, not its uniformity".

How much we agree. The peoples of the new democracies which have so recently emerged from the shadow of totalitarian regimes to rediscover their identities would not fit comfortably into a union whose structures repress such variety. We should be doing those countries scant favour if we allowed the Union to go down that road.

That brings me to the third principle. The European Union cannot succeed without the whole-hearted support of public opinion. Those who want a rapid move to a federal Europe, such as the European Commission and the European Parliament if the opinions which they have submitted to the IGC reflect accurately their views, make the perilous mistake of ignoring that imperative. I say "perilous" because they have not learnt the lessons of Maastricht—the Danish "no", the cliffhanger of a referendum in France culminating in the "petit oui" and our own difficult ratification here in Britain. Those who do not heed the lessons of Maastricht and press for a federal agenda risk sabotaging Europe's sensible development based on a partnership of nations.

The treaty to emerge from this IGC is likely to be put to a referendum in a number of countries. A "no" vote in any one of them could put back European co-operation many years. That is why we must get the IGC right if we are to move forward.

The final guiding principle which I mention now is subsidiarity. That has become a widely accepted concept since its inclusion, largely as a result of British pressure, in the Maastricht Treaty. It was Jacques Santer who said that the Commission should do less but do it better. As I have already made clear, we welcome that aim which will be assisted by a further clarification and definition of the subsidiarity principle. The Government will be putting forward concrete proposals at the IGC which will further assist averting any over-intrusive regulation which does so much to damage public confidence in Europe by alienating the ordinary citizen.

I shall now move on to some more detailed issues which will be dealt with in the IGC. The Maastricht Treaty set up the new pillared structure of the Union. We are committed firmly to preserving that. It reflects the reality that Community procedures and institutions are not right for foreign and security and justice and home affairs policies. Those are areas of crucial importance, both internally and externally, for the Union.

The United Kingdom accepts fully the need for a co-ordinated, multi-national response to the threats from within Europe such as drug trafficking, terrorism and growing cross-border crime as well as the challenges from without, showing the advantages of a co-ordinated European approach on key foreign policy issues. Community institutions and procedures are really not appropriate in those cases.

Defence too is a vital issue for the security of the Union, although it is not one for the Commission. As the White Paper sets out, we believe that discussions on European defence issues must be carried forward in the clear realisation that NATO remains the bedrock of European security. The WEU has an important role to play. The UK has already put forward proposals for enhanced collaboration between the WEU and the EU, but we believe, for the reasons which the White Paper sets out, that the WEU must remain an autonomous organisation with its own treaty base.

The Maastricht structure recognises that those areas go to the heart of national sovereignty and therefore must continue to be handled intergovernmentally. We see no case for changing that. Many people argue that qualified majority voting must become the rule in order to avoid decision-making paralysis in an enlarged Union. The noble Baroness, Lady Seear, spoke along those lines in the House earlier this month. I cannot find that those arguments stand up to the scrutiny which they must receive for three reasons.

First, they ignore the fact that majority voting is already .the rule on a wide range of subjects, including agriculture, the single market and trade policy. Secondly, they ignore a fact of history; namely, that many major decisions have been taken under unanimity—the financing package agreed at Edinburgh, for example, and the Maastricht Treaty itself. Unanimity can hardly be described as a block to progress on either of those occasions. But, thirdly, they ignore the fact that the majority of areas which still need unanimity are of major constitutional importance where QMV would be unacceptable not only to ourselves but also to the vast majority of our partners. Treaty changes, new accessions and the level of the Community budget are but three examples.

Major issues of constitutional importance aside, the areas which remain subject to unanimity are few: industrial policy, some limited areas of environmental policy, taxation, citizenship, culture, the overall research policy and structural funds' framework, some of the articles on EMU, some derogation from Community rules and some institutional issues such as the siting of institutions. Therefore, it is scarcely credible to claim that continued unanimity in those areas will paralyse all progress in an enlarged union.

An area where we see the need for reform before enlargement is the voting system. Currently, the smaller states have a disproportionate influence relative to the size of their population: one vote for every 200,000 Luxembourgers; one for every 8 million Germans. Population is by no means the only factor which matters. We must acknowledge too the sovereign right of even the smallest nation to have a say. But there is a strong case for the IGC to look closely at the system and to seek a means to redress somewhat the existing imbalance.

One of Europe's key objectives is to cut unemployment. Some of our partners, as well as the Labour Party, are, I believe, very misguided when they call for a treaty chapter on employment. Frankly, we cannot see what possible contribution that will make to job creation, except within an expanding European Commission, and that is something which many of your Lordships have said that they most certainly do not wish to see. It is businesses, not governments and still less the European Union, that are the key to job creation. It is our task, as governments, to provide a regulatory framework which allows the investment decisions to be made for businesses to expand. It is not treaty language which will make the difference; it is our own activity. We have to provide the right framework for that activity to thrive and to create employment of a lasting nature.

This Government will be looking for concrete improvements in a large number of areas: to improve the quality of European legislation as well as the continued reduction in its quantity; more consultation with business before relevant legislation is passed; better committee procedures; improved monitoring and enforcement procedures; and an enhanced role for national parliaments in the decision-making process of the Union, which I know will please the noble Lord, Lord Bruce of Donington. I nearly called him my noble friend.

Those detailed commitments are further evidence of our positive and constructive approach to the IGC. We believe also that the IGC needs to look at the role of the European Court of Justice. I know that most of your Lordships share the serious concerns that have been expressed recently about the perceived threat of further centralisation through apparently integrationist court decisions.

We shall shortly be issuing a memorandum putting forward proposals to address those concerns. We must recognise, however, that Britain benefits from a strong, independent court and we must abide by our long tradition of respect for and adherence to the rule of law. For example, the single market would really risk being undermined if its rules were not enforced and enforceable by the European Court.

The root of those problems can often be found in the laws themselves rather than in the courts. Ambiguous or contradictory law plays an important part in contributing towards court judgments which we then find unpalatable. Therefore we shall look at ways for laws or their parent treaty articles to be revised if their effect is found to be inappropriate or disproportionate.

We believe in Europe as a partnership of nations, sharing and pooling experience and knowledge in the Community when there is a clear common interest in so doing and co-operating closely on an intergovernmental basis in areas where it is better to maintain unfettered national control. That is the way that we can help create a Europe which is comfortable with its structures and with itself, and in which its citizens can not only feel at ease but can also thrive and benefit from that partnership of nations and the aims that we all share for peace and prosperity.

Moved, That this House take note of the White Paper on the British approach to the 1996 Intergovernmental Conference (Cm. 3181).—(Baroness Chalker of Wallasey.)

3.30 p.m.

Lord Richard

My Lords, I believe it is appropriate for the House to have an opportunity today to discuss the Intergovernmental Conference and, in particular, that we should have the opportunity to discuss not only the Government's detailed approach to the conference but perhaps also their approach to the European Union as a whole. I am grateful to the Minister for her introduction, which was discursive and wide-ranging; and I am awaiting with great interest to hear the two maiden speeches in today's debate.

I am pleased that the Government have at least, and after much travail, arrived as a concerted, even if only temporary, position so far as concerns a referendum. As I understand the position, the option to join an economic and monetary union remains an option and is certainly not to be closed before the next general election. I note that the Minister is nodding her head in agreement. If the country were so unfortunate as to re-elect the Conservative Government and if that Government were to decide to exercise the option of joining the EMU, then that decision would at some stage be put to the country in a referendum. As I understand it, that is now the policy of Her Majesty's Government.

As the House will know, the Labour Party has consistently argued that there should be a test of public opinion on the issue of whether or not Britain becomes part of a common currency. We note with interest that the Government are now finally supporting that idea.

The Minister was quite right to draw attention to the importance of the IGC itself. She was also right to say that it is not a conference which is designed to be part of a re-drafting of the Treaty of Rome, nor is it to be a re-run of Maastricht. But, nevertheless, it is a conference of considerable significance. It is charged with the duty of looking at the treaties and seeing how they should be adapted between now and the end of the century. That is a particularly important role having regard to the possibility of enlargement of the Union within the relatively near future. I understand that it will be sitting for a year or more, and one can well understand why some of our partners in Europe are anxious that it should still be in session at the time of the next general election in the United Kingdom.

When the Prime Minister returned from Turin and made his Statement to the House of Commons, I asked the noble Viscount the Leader of the House a number of questions on the communiqué. I did not expect to get any answers, and I must say that my expectations were not in the least disappointed. But the whole tenor of the communiqué and the whole tone of that argument is in the direction of a more integrated Europe. If the IGC does what the Turin Summit requested it to do, it would be bound to involve a greater role for the European Parliament; a more co-ordinated foreign policy; greater majority voting in the Council of Ministers; a common immigration and asylum policy; and more vigorous action on unemployment. However one looks at it, this is bound to involve a further curtailment of Britain's right of independent action, and it is no good the Government pretending otherwise. To say one thing in London and agree to something else in Europe is effective at neither end. What they say here makes our position in Europe more difficult, and what they eventually have to accept in Europe makes their position here more untenable.

The truth, of course, is that government policy on Europe is determined not by a sober assessment of British interests but rather by a panic assessment of Conservative disunity. On Europe, they have elevated drift to a political art form and they should not be surprised that they have succeeded in convincing no one.

Let us take the question of majority voting. Despite what the Minister said, it is clearly impossible to envisage substantial enlargement of the Community without an increase in the use of qualified majority voting in the Council of Ministers. Indeed, I do not believe that anyone could pretend otherwise. To argue the contrary would leave the two countries which are on the verge, or at least the nearest in doing so, of joining the Union—namely, Malta and Cyprus—with a veto over the actions of the whole of the rest of the Union in certain key specific areas. I cannot believe that that is a position which anyone in this House would advocate.

It is impossible to envisage further reform of the common agriculture policy, which is particularly necessary in view of enlargement, because the countries in eastern Europe will, frankly, not be able to be accommodated within the Union unless and until the CAP is substantially amended. Again, it would be impossible to envisage further reform of the CAP without an extension of qualified majority voting. I do not believe that anyone would pretend otherwise.

Yet by setting their face against any extension of qualified majority voting, the Government are once again putting themselves out of court in seeking to influence the re-weighting of votes or of determining the further circumstances in which QMV should be used. Having said that, I was somewhat heartened to note the changes (at least in wording) in the Prime Minister's attitude towards qualified majority voting compared with his previous total rejection. From a flat denial it has now become somewhat more nuanceée—if I dare use a Community expression in this House. I shall read out what the Prime Minister actually said in the House of Commons on Monday 1st April. Your Lordships will no doubt notice that it is not quite so comprehensive as some of the other statements being made by Ministers. As for the intergovernmental conference, we are pursuing the question of reweighting the voting, and I anticipate that we shall have the support of a number of other states in achieving that. Britain is not likely to be isolated in this regard. It will be a matter of some importance, especially as the Community enlarges. I anticipate success. I do not anticipate any significant extension of qualified majority voting, and it is possible that there will be no single extension at all. We are not seeking to accept any. What may turn up in negotiations lies ahead; at present, we do not intend to accept any extension of QMV whatever. I hope that that is clear enough for the right hon. Gentleman: no extension of qualified majority voting".—[Official Report, Commons, 1/4/96; col. 25.] I am surprised that the Prime Minister did not say, "Read my lips", at the same time. We all know what happened to that particular prophecy.

However, perhaps the Minister has told us today what the Government's position really is. I could well understand a diplomatic retreat from the over-extended position that Mr. Major put himself in by the comprehensiveness of his denials to David Frost in February, and a little clarity has, perhaps, been helpful both here and in Europe. But, if the Minister will forgive me, I shall read exactly what she had to say on qualified majority voting with great care, with a red pencil and with other texts open at the same time. Therefore, we may somehow see the drift of the Government's policy.

The fact remains that we are still in a minority of one in being against any further extension. The only possible supporter for our position is a tentative "Don't know" from Sweden. That and other issues raise rather more fundamental points than the minutiae if what will be discussed in the IGC. What are the British interests, not prejudices but interests, which demand that the Government pursue that course? No one else in Europe seems to agree that it is in their interests to be quite so negative. What distinguishes us from France, Germany and Italy, let alone all the others? Wherein lies the distinctiveness of the British position? I have to confess that I do not know the answers. Indeed on any real analysis of our interests there is precious little to choose between the United Kingdom and other countries in the European Union. We all trade (increasingly with each other) and we all broadly want the same type of society with the same human and democratic rights guaranteed and protected. So where are these differences that make us quite so special? I do not detect them and I listened with great care to what the noble Baroness had to say today when she enunciated her principles. Like apple pie and motherhood I could agree with probably 99 per cent. of what she had to say. However, I am bound to say that I thought her apple pie had a few cloves in it which are not particularly to my taste, but apart from that it seemed to me to be perfectly all right.

Again, on the reform of the European Court, so far as I can tell, we are in a minority of one once again. As I understand it, no one in the Community is in favour of reducing the powers of the European Court of Justice save for the British, with a tentative "Don't know" from the French. I am not sure why our interests demand that we should take up this position; but, as I understand it, this is what we have done.

On economic and monetary union, after the Verona meeting this weekend, again, according to the Italian presidency, we find ourselves in a minority of one. Why? What leads the UK into a position of such isolation when the others are clearly moving in the opposite direction? What disturbs me particularly is the fact that the justification for our attitude—if we are not careful—will be to look for failure on the part of the others. This is not just a question of intellectual differences; these are pretty fundamental points and unless one can try to unearth the reasons why Britain is supposed to be so unique in these respects, our European colleagues are bound to approach us with suspicion.

One can argue about the minutiae of the IGC—I am sure they will be argued at great length for perhaps 18 months or so—but as a country in the end we shall have to decide whether we are on the side of events in Europe or whether we shall stand out against them. I am afraid that at the moment we seem to be justifying too much General de Gaulle's suspicion and resentment. That really is a shame. Rarely can a Government consistently, over some 17 years, have incurred so much odium to so little effect. When the history of our relations with Europe over that period come to be written, future historians will I think be amazed at the extent to which a reservoir of good will for Britain was so capriciously emptied. It is hardly surprising that our negotiating position has deteriorated as sharply as it has in that period of time.

3.42 p.m.

Lord Ezra

My Lords, this important debate on the IGC has been effectively introduced by the speech of the noble Baroness, Lady Chalker, setting out with her customary clarity the Government's position; and the speech of the noble Lord, Lord Richard, in which he has raised a number of vital issues which I am sure will be dealt with in the course of the debate.

Having studied carefully, and to some degree participated in the long running debate on Britain's European policy, I have been increasingly disturbed at the emphasis on political issues; the emphasis on sovereignty and losses either real or in some cases, in my opinion, imagined; and the relatively lesser importance that has been attached to the economic implications of the European Community. I am glad that the noble Baroness referred to those matters briefly in her speech.

The most important British initiative in recent times in European terms has been the launching of the single market. I am delighted that the noble Lord, Lord Cockfield, who played such an important part in that, will be speaking later. It is most important that we consider what could be the impact on the single market of the various wider issues which will be debated at the IGC. The single market represents the one means within the European Union in which we can deal with issues which are uppermost in the minds of the people; namely, jobs, investment and competitiveness. We can go on arguing in our specialised milieu about sovereignty and about various forms of political association or joint or several political effort, but that does not deal with the issues about which people are now concerned. I wish to talk on that issue.

I hope I may interject a personal note. I have in recent years been involved in enterprises in France, Belgium, Holland, Austria and Italy. The one common factor in that participation has been the extent to which the European concept, the European procedures and the challenge of the European market played a part in the debates, whether at board level or committee level. Europe is inevitably being created by the enterprises of Europe. There will be no going back. We either have to make a success of it to enable the enterprises to do their job properly or fail to the enormous disadvantage of all the people we represent.

It is sometimes said that of course the best thing to do is to leave it to the enterprises. The noble Baroness used that phrase and it also appears in the Government White Paper. But the enterprises cannot do it on their own. They depend on an effective framework, and indeed the noble Baroness referred to that. Therefore it is the framework which will emerge from these deliberations which is of vital importance. I hope that when she replies to the debate later the noble Baroness will say what steps are being taken within the limits of the single market to complete it effectively. There are still areas of weakness. For example, there is a lack of liberalisation in the two important markets of telecommunications and energy. The policy on competition needs tightening up. The problems of distortions, particularly arising from subsidies in certain countries, have still not been resolved. My first question is, what will be done about those matters? I hope that they will not be lost sight of in the wider deliberations in which we are becoming involved.

I now consider some of the broader issues which will be tackled in the negotiations which could have an impact on the single market and on its progressive development. One of the most serious and adverse could be the creation of a two-speed Europe—of a hard core on the one hand and the remainder on the other. It is difficult to envisage what impact that would have on the single market, but I cannot avoid the conclusion that it could be extremely adverse. The Government appear to be against this division but, on the other hand, they favour variable geometry, flexibility and a multi-track approach. All this I find difficult to understand. They do not like two-speed but they like multi-track. They do not like a hard core but they like variable geometry. We need to be a little clearer about what this amounts to. This is not the first time that Britain in its relations with Europe has sought to find a form of words which will enable us to be part of but not wholly within it.

I recall during the 1950s there was much debate about the Community in its early stages and about the European Free Trade Area and the Atlantic Alliance. I believe that it was Sir Anthony Eden, as he then was, who devised the term "Europe à tiroirs". He likened Europe to a chest of drawers: some would get into the European Community drawer; others into the European Free Trade Area drawer; others into the Atlantic Alliance drawer; and I believe that there were two or three other drawers.

I was reminded of that Europe à tiroirs when I read about flexible geometry. The inventiveness of the brilliant young men in the Foreign Office, or from wherever these terms emerge, seems to be without bounds. I have no doubt that in some years ahead we shall use some other phrase to discuss the one continuing issue which seems to afflict us: we cannot make up our minds about Europe. On the one hand we want to have an opportunity to get out or to limit its impact if we possibly can, but on the other we want to have a role in influencing its development.

That ambivalence is becoming very serious. In relation to the single market, we have to be very clear that we are totally against any division: that we are totally against differing speeds, differing tracks, flexible geometry, or whatever else; and we want to have a single grouping within Europe to concentrate on developing a single market which will be in the interests of and result in the well being of all members of the Union.

A second area of confusion—the noble Lord, Lord Richard, referred to it—relates to decision making: the question of qualified majority voting. The Government want to limit the further development of qualified majority voting. That is a perfectly proper line to take. What has struck me as odd is to take a totally adamant attitude against any further extension even before negotiations have begun. The noble Lord, Lord Richard, pointed out that careful analysis of the words of the Prime Minister in recent times may indicate a softening in that attitude. I hope that that is so because I do not see how one can enter into such negotiations when taking up unalterable positions in advance. The scope for negotiation seems thereby to be limited to almost nil.

That point is of great importance as regards the single market. If cases can be cited where qualified majority voting is appropriate, in particular in the context of enlargement, and decisions are not taken because it is not applied, then the operation of the single market could suffer. Again, I hope that we shall have clarification on where we stand in that area.

That leads to the question of enlargement, which will be one of the major issues debated during these long drawn-out deliberations. I do not know whether we have yet worked out fully the implications of enlargement. My noble friend Lady Seear advised us recently to ponder carefully on the effect of the entry of a large number of countries with a lower level of economic development into the single market as it exists. As she properly put it, on the one hand letting them join the Community means that they should participate freely in the single market. However, if they participate freely in the single market, will that be a threat to the jobs and livelihoods of those already in? That is a fair question to raise. It is very relevant to the operation of a single market; and I am not sure that we have yet found the answer. I do not know whether we have worked out that by some staging phases those countries should become members in order not to create too much disturbance in the single market while at the same time giving them opportunities for wider trading.

Finally, we come to the real bugbear, the ghost at the feast (because it will not be discussed)—namely, the single currency. From the point of view of the single market and of enterprises, the continued uncertainty about our position is damaging. The fact that we have retained an option is fair enough. Decide when you know all the facts. What is unclear—it has become particularly unclear as a result of the Verona meeting of Foreign Ministers—is what our position will be if we stay out. Where would our currency stand in relation to the single currency, if it were formed? The proponents of the single currency would like to have some defined band for the other currencies. It would be a fairly wide band, according to the statement today in the newspapers attributed to the Italian Prime Minister. But we apparently rejected that. The potential harm to the single market and its growth by having confusion in the currency situation would be serious. I do not see how one can have a grouping of three, four or five countries with a fixed currency, and with total currency uncertainty so far as concerns the others.

I have been involved in many deliberations on our industrial policy in Europe. One thing that enterprises would like to see, among others—such as low inflation which we have achieved—is a stable currency. It is in no one's interest to have a widely fluctuating currency. We should aim to have a stable currency. Whether one goes from that objective to a fixed currency is a matter for debate. But surely our aim should be, as well as keeping inflation low, to go for a stable currency.

Starting from what I regard as one of the big achievements of the European Union, namely the single market, I have sought to consider the impact on the further development of the single market as a result of wider issues which will be deliberated at the IGC. I hope that we shall bear that very much in mind when we negotiate, and that we adopt the attitude of negotiating from within rather than criticising from without, which has been the appearance, unfortunately, that Britain has too often presented in recent months.

3.57 p.m.

Viscount Tonypandy

My Lords, at the beginning and at the conclusion of his remarks, the noble Lord, Lord Ezra, reminded us of the importance of the debate today. I always listen to the noble Baroness with great—I almost said affection—respect, but I thought that she was rather sliding over major issues today. The noble Lord, Lord Richard, spoke for his party. The three previous speakers have had the authority to speak for their party. I lay no such claim. I speak for myself, and my speech will be different.

In my judgment, the best part of the Government's White Paper is the title A Partnership of Nations. Chancellor Kohl, and to a lesser extent President Chirac, seek not a partnership of nations but total political and economic union. European monetary union remains their goal.

I remind your Lordships that by sitting on these Cross Benches I follow the long established custom that former Speakers of another place never return to the party political arena. The total trust given in another place to its Speaker is based on the knowledge that when Speakers leave the Speaker's Chair they will always give their full support to protecting the independence, the rights and the privileges of our sovereign Parliament and refrain from active party political activity.

The Intergovernmental Conference gives us an opportunity to pause and take stock of the way in which the Treaty of Rome and the subsequent treaties are working. It is quite wrong to pretend that we do not have the right to consider how it is working, what we have gained and what we have lost by belonging to the European Union. We should have the right to consider whether the time has come when it is wise for us to change course in our economic and foreign policy. Only an objective study of the economic, social and political consequences of membership of the European Union can provide the answer to that question.

In preparing my contribution for this debate, I am deeply indebted to the in-depth and careful research into the subject undertaken by Mr. Bill Jamieson in his book Britain Beyond Europe; Bernard Connolly in The Rotten Heart of Europe; Andrew Man in Ruling Britannia; and Norman Lamont in Sovereign Britain. Surely we may quote a former Chancellor of the Exchequer and believe that what he has to say is based on information. I am also indebted to the right honourable David Howell, Chairman of the Select Committee on Foreign Affairs in another place; Christopher Booker, an outstanding journalist crusader; the noble Lord, Lord Rees-Mogg; and noble Lords on both sides of the House. Those people are not lightweights; it is no good smiling about their research as though it can be disregarded. I believe that they are dealing with facts. In his book Sovereign Britain, Norman Lamont states: I cannot pinpoint a single concrete advantage that unambiguously comes to this country because of our Membership of the European Union". That we are in pursuit of continental integration is regularly denied in this House, but none the less the policy seems to be relentlessly pursued. Propaganda to convince us that we are incapable of survival as an independent nation has poured upon us. It is emphasised that we need European crutches to be mobile. The attraction of belonging to a home market of over 250 million people has been dangled before us for over 20 years. As Bill Jamieson points out, that is the myth at the heart of Europe.

Facts and figures are more impressive than propaganda. I look to the impeccable source of the Treasury red books for my evidence. The results of European membership are very different from what we are encouraged to believe. The first fact of significance is that Europe is the only continent where our terms of trade are consistently in deficit. We have a surplus in balance of trade with every other continent in the world. We buy from Europe much more than it buys from us. The trade advantage has been with it since 1974. Crisis and consternation would cover Germany in particular if she did not have the British market to purchase her finished industrial products. Unemployment in Germany, which is already equal to the total population of Norway, would rocket still higher without the British market.

Examine the following statistics from the Treasury red book. It appears that in the 10 years from 1985 to 1994 we had a cumulative deficit of a staggering £105 billion with the European Union, but we had a £13 billion surplus with the rest of the world. Outside the European Union, we run a surplus with all the major industrialised nations of the world. Fortunately for us, our deficits have been cleared in no small amount by our invisibles—interest on investments, insurance and the like—or we would have been sunk without trace. The City of London, with its foremost stature among the exchanges of the world, is estimated to attract to the UK at least £20 billion a year. Whatever sweet words are said in this House, it is common knowledge that both France and Germany resent the City of London's world influence. That is one of the major reasons why the European Union decided to establish the proposed Central European Bank in Frankfurt. Equally, it resents the rapid growth of English as the pre-eminent world commercial tongue. English is now the language of finance; it is the language of the air that makes communication easier for all the markets in the world.

The total financial cost to Britain of membership of the European Union—and mark my words; these are not my figures but the Treasury's—is now a colossal £108 billion. This results from our cumulative visible balance of payments deficit with the EU since 1973 amounting to £87 billion. In addition, our net contributions to the Community budget amounted to £21 billion. Those are mind-boggling figures. No wonder the Government have been so shy about bringing them to our attention. In addition, there has been a serious effect on the cost of living in the United Kingdom. When we entered the European Union, we ended the cheap food supply from Australia, New Zealand and the Americas in favour of the highly expensive food regime in Europe.

An OECD estimate in 1993 calculated that an average British family paid £1,040 per year (£20 a week) more for its food as a direct result of the nightmare common agricultural policy. Because the CAP now claims nearly two-thirds of the Community budget, that extra cost is even higher.

Membership of the European Union is ferocious for us. It has severely weakened our balance of payments. It has reduced our political and economic rights to a pale shadow of what they were. Another place has already been diminished beyond measure compared with what it was as recently as when I presided in the Speaker's Chair. When this Parliament passed an Act preventing Spanish fishermen from sailing under our flag and stealing the quota of fish allotted to us, the European Court of Justice in Luxembourg declared the Act illegal—an Act passed by the British Parliament!—and told us we had no business to do so. If any foreign court had tried to overrule the sovereign rights of our Parliament as late as the 1970s it would have been told to jump in the river. What has happened to our self-respect in the meantime? What has happened to us that we now submit to overruling by foreign courts with a docility that is a disgrace to the "bulldog breed"?

Through our brief but turbulent period as members of the ERM our interest rates were decided more by Germany than by our own domestic monetary conditions. We must never forget that costly folly. It is estimated to have cost British taxpayers £5 billion. That is real money from the taxpayers of this country. It forced thousands of small businesses into bankruptcy. It ruined families from John o'Groats to Land's End. These are grave and grim facts. They are not opinions; they are facts.

I now turn to the indisputable evidence that a new global economic and trading pattern is emerging. Future world trade growth will leap forward in the Middle and Far East and in those countries on the Pacific Rim, the so-called tiger economies. Fortunately for us, many of the Commonwealth countries are also among the emerging giants. Monumental opportunity beckons us to increase dealing with Singapore, Malaysia, South Africa, Australasia, India and other nations where exploding expansion is under way. What is more, those countries are well disposed towards us. They do not seek every opportunity to hurt us—in contrast with the lightning speed with which France and Germany plunged their dagger into our cattle trade. Not being content with spitting on us themselves, they invited the world to do the same.

We are tied to an uncompetitive, introvert regional economic bloc whose share of world trade is already withering on the vine. It is getting a smaller, not a greater, share of the world's trade.

We need have no fear, whatever decisions we take about belonging to Europe: our trade with Europe will continue whether we are members or not. Europe cannot do without us. Our market for European goods is essential. Like Norway, Japan and Switzerland (countries outside the European Union) we should be dealing with Europe free of its restrictive practices. We must set ourselves free from the manacles put on us by introvert Europe. Our central position as a global trader is the target we must always keep in mind.

Europe has almost destroyed our fishing industry; it has played havoc with our farmers; it has destroyed the living standards of thousands of our citizens; it has diminished the standing of our Parliament and the stature of our Law Lords. They used to be supreme. Now they must doff their caps to Spain, Italy and Germany, because they know they can be overruled. That ought to make us hide our heads in shame.

Our veto is our life-line. But timidity in using it has landed us with serious economic and social problems. Even if we are but one against 14, we must be prepared to stand firm. It will not be the first time that the United Kingdom has stood alone in Europe.

Some things in life are so precious that they are beyond price. Love in one's own family is one. Love of liberty, political, social and economic, is another. Our fathers paid a great price for the political independence of these Isles; we will betray our trust if we deny such liberty to our descendants.

This Intergovernmental Conference is our last chance to set ourselves free. I am not intimidated by the craven warnings as to what would happen if we withdrew from the European Union. It would be an act of liberation for which our people long. I have taken more time than I intended, and I am sorry; but I believe in my bones that there are masses of people in this country who are frustrated and resentful because they have never been given a chance to decide their own destiny. I pray that Her Majesty's Government will not just brush aside what I have said today.

4.17 p.m.

Baroness Wilcox

My Lords, I crave your Lordships' indulgence as I make my debut in this House speaking in one of the most controversial areas for debate in Britain today; namely, the future development of the European Union. I follow nervously such experienced and distinguished speakers on all sides of the House. I am emboldened to do so because this conference provides the perfect opportunity to work for changes that will benefit the future of the Union and the future of our nation within it—and because, when I read the White Paper, I saw some stars twinkling at me.

As a trader in Europe for some 26 years, and a representative of the National Consumer Council in Europe for six years, I am attracted by some points in the White Paper. Some of them have already been referred to, and I wish to commend them to the House.

To introduce a personal note, as is often the way with new ventures, my trading started by accident on a windswept Breton fish quay at 4 a.m. buying a few langoustines to take back to the United Kingdom—something which was then a bit different. My school French was not up to the local Breton dialect; in the howling wind I became totally confused by the metric system, and by 4.30 a.m. I was the proud possessor of a quarter of a tonne of live langoustines crawling around the back of my Mini! A frantic bit of marketing on the phone and guesswork as to the exchange rate eventually saw them delivered, still gaspingly alive, to Harrods, Fortnum and Mason and the Bunny Club. They sold fast, and at a profit. In no time I was a busy, happy European trader. I learnt, as I have learnt many years since, that traders will trade, and anywhere, given the right conditions.

At the National Consumer Council—the other side of the counter—I became keenly aware of how the United Kingdom's 58 million consumers are directly affected by legislation and policies agreed within the Union. So, for the British traders like me and for the British consumers like me, the first shining star on the paper—so far as I could see, the most difficult one to reach—is openness and transparency.

Decisions taken in Brussels can seem very remote from ordinary people. If we are ever to make British citizens feel that the Union exists for them, we have to encourage more openness, better scrutiny and some plain language. I am delighted therefore to see that the White Paper recognises the need to build people's confidence in the Union and attaches priority to encouraging greater openness. Consultation is very much part of that process. Therefore, I welcome the commitment to: press for more systematic consultation by the Commission of business, parliaments and other interested parties, before introducing proposals for new legislation". We have seen considerable advances in recent years: better public access to documents, open meetings of the Council, the publication of votes and minutes of meetings. So let us extend those achievements and bring the European Union closer to the people that it serves. Involving people in decision-making will inevitably help to foster greater understanding and greater trust. I am sure that as an ideal it commands your Lordships' widespread support.

We have already heard a lot about my second shining star. The Intergovernmental Conference is much concerned with preparing the Union for enlargement. But before we can welcome new partners, we need to make sure that our policies are in good order. As my noble friend Lady Chalker has already stated here today—and the noble Lord, Lord Richard, agreed—the common agricultural policy certainly needs to be looked at. We recognise that pressing need. But convincing our partners in Europe continues to require courage and perseverance. I take this opportunity to praise our efforts so far in pushing our European partners up that very steep hill toward reform. I am thankful at least that the prospect of enlargement will concentrate the minds of all member governments wonderfully well. The accession of central and eastern European countries in particular demands that we work for further reform now. Adapting their agriculture to current levels of CAP support would take spending to levels that no one can afford. As the noble Viscount, Lord Tonypandy, identified, it already costs every British family and every European family of four, I think, technically, over £20 a week in higher taxes and food prices. Not only has the CAP become a very regressive tax, it also encourages damage to the environment, disrupts international trade and hurts the fragile economies of many poorer nations.

I come to my last point—my third, flickering star. Coming from a West Country fishing family and with long experience and knowledge of that industry, I could not end my speech without reference to another key policy: the common fisheries policy. Support for our fishermen is very close to my heart, particularly the inshore fleets which are so vital to the families of Devon and Cornwall. I confess to an emotional involvement here. Fishing families are close, drawn together by the unpredictable element in which they must work: the life taking and life giving sea. No doubt in time, battling over a fast diminishing, unreliable, internationally fought-over resource will be replaced by the much more predictable and supermarket-friendly, reliable farmed fish. But for the present, our Government's new determination to see fairness and order in our industry is our only hope. Quota hopping and our precious licences must be scrutinised anew.

As I stand here today, I ponder—I pondered as I sat up at 4 a.m. trying to re-write this speech—what my fishing forebear, Great-Granny Johns, would have made of the discussion that we are having here today. To her, foreignness and foreigners started with landsmen and went from there to the people in the next village. That is about as far as my Great-Granny Johns was prepared to go. To her, currency was hard—very hard. She put her money in the bank once and the bank folded. She never forgave it. From that moment on she bought and sold all her boats in sovereigns. I have to tell noble Lords that when she died, her sovereigns were found sewn into her mattress. But she traded; and she traded her fish where she had to in the conditions of her day. I recall being taken at the age of seven by my own formidable mother to see what I had to live up to. At 5 a.m., in the cold and wind, at over 90, my Great-Granny Johns was down on the quays at Plymouth. She was there to see off her men and ships; to wish them Godspeed; to encourage them to be brave and cheery; to return with a good catch; and to return "safe home".

More important and relevant here, she gave to her captains her trust and the freedom to negotiate at the helm in foreign waters. In that same spirit, I urge your Lordships today, when the debate is done, to send our British Ministers and our civil servants to this long conference with our trust, our encouragement and freedom at the helm to negotiate a peaceful partnership for the benefit of us all.

4.26 p.m.

Lord Bruce of Donington

My Lords, your Lordships, I venture to suggest, have listened to one of the most remarkable and agreeable maiden speeches that the House has heard for some time. I should like respectfully to congratulate the noble Baroness upon it.

The noble Baroness brings many talents to this House, talents of which she has not informed the House wholly and in extenso. Perhaps I may inform your Lordships that in addition to being president of the National Consumer Council and her business experience, first in her own family business and later in the food industry generally both in the United Kingdom and France, she is also a non-executive director of the Board of Inland Revenue. That should reassure many noble Lords, particularly as we are still very close indeed to 5th April.

That is not the limit of the noble Baroness's interests. She has been keenly concerned with the development of the national curriculum, thus showing an educational interest which I am quite sure will be most welcome in your Lordships' House, and has been associated with technical and educational training. I see also that she is a member of the Institute of Directors, which brings additional authority to large numbers of members of the Institute of Directors who are in your Lordships' House, excluding me, of course. Among her listed recreations is calligraphy. That is indeed a remarkable recreation. I hope that she will never find herself exercising that skill by receiving a missive from me in my own handwriting. It will present very considerable trouble to her. I am sure that the whole House will look forward to hearing from the noble Baroness at frequent intervals in the days that lie ahead and in the very wide field of subjects of which, quite clearly, she has considerable experience.

I listened with pleasure to the remarks that fell from the lips of the noble Viscount, Lord Tonypandy, with the object of detecting some reaction from Members of the House, particularly those not only on my own side but also on the government side. It is only a few months ago since the noble Lord, Lord Henley, told this House that the benefits of membership of the European Union were so self-evident that it was unnecessary to provide particulars. Perhaps the noble Lord should be reminded that we had a most authoritative speech from the noble Viscount, Lord Tonypandy, very much on the same lines as a memorandum published by the Treasury in 1988, when it thought it was worthwhile to draw up a balance sheet and profit and loss account of the whole position. If the Government disagree with what the noble Viscount said this afternoon, perhaps they would be kind enough to publish their own figures and let the House and the country make their own judgments as to who is right.

My interest, since 1963, has been in relation to the constitutional position of the United Kingdom within any further association with, as it was at that time, the continent of Europe. I am well aware that all governments operate within certain international constraints imposed by trade, treaty or by sheer financial power. I have always believed in the maintenance of the power of Westminster to deal with those affairs that are intrinsically part of the governance of the United Kingdom; that people from outside should not be entitled to tell us what we are to do, whether by majority vote or otherwise. I suggest, not only to Members of this House but also to Members of another place, that the principal concern in regard to our membership of the European Union should be the integrity of the United Kingdom Parliament. I shall therefore pursue the narrow path of how the Government White Paper deals with the whole question of the powers of the United Kingdom Parliament as against those of the Commission and the European Parliament, and what has happened since. Your Lordships will recall that in the Government's White Paper which dealt with this position, at paragraph 35, they said: The Government does not feel, however, that the European Parliament needs new powers. Nor do we accept, in a Union of nation states, that the European Parliament can displace the primary role of national Parliaments". It goes on to say, The European Parliament has sometimes used its powers under this procedure irresponsibly, to try to force the Council to accept institutional changes not directly related to the legislation under discussion". With the greatest respect, and I hope without undue embarrassment to the Government or my own side, that is a judgment that I accept. It is clear from the Government's standpoint, as set out in the White Paper, that they intend to maintain the power of the national Parliament in so far as it lies within their abilities to do so. In that connection, the White Paper of 12th March last was followed by a General Affairs Council meeting in Brussels on 25th March which was attended by a Foreign Office Minister. In the communiqué published in Hansard on 29th March, no mention was made of any discussion having taken place in regard to the powers of the national Parliament. However, it said this: The Council also reached agreement in principle on the mechanism for keeping the European Parliament informed about the progress of the intergovernmental conference".—[Official Report, Commons, 29/3/96; col. WA 797.] It makes no mention of any progress made to keep the British Parliament informed. We then pass to the Prime Minister's Statement of 1st April on the result of the European Council in Turin. The only commitment he made in regard to national parliaments was, For example, I underlined … the value of a greater role for national parliaments". That was the limit of the Prime Minister's commitment to the matter.

In the presidency conclusions, the support for the Government's position about the importance of national parliaments was dealt with briefly. They stated that, The IGC should equally examine how and to what extent national parliaments could, also collectively, better contribute to the Union's tasks". That is as far as it went. It is not exactly a ringing declaration in favour of strengthening the powers of national parliaments. But worse is to come. In the presidency communiqué published almost immediately afterwards, there was an annex. The conclusions said, The Heads of State or Government have confirmed the agreement reached between the Ministers of Foreign Affairs on 26th March 1996 regarding the association of the European Parliament with the work of the IGC". That was not mentioned in the Answer to the Written Question submitted in another place to which I referred. It would appear that on that occasion the Minister for Foreign Affairs agreed to explicit new powers for the European Parliament and I shall read them to your Lordships. They are, To ensure that association in compliance with the provisions applicable to the revision of the Treaties the Ministers for Foreign Affairs have agreed on the following arrangements:

  1. 1. The meetings of the European Council dealing with the IGC will begin, as usual, with an exchange of views with the President of the European Parliament on the subjects on the agenda.
  2. 2. Ministerial meetings of the IGC will also be preceded by an exchange of views with the President of the European Parliament, assisted by the representatives of the European Parliament, on the items on the agenda.
  3. 3. Once a month and whenever the Ministers' representatives deem it necessary by common accord, the Presidency will hold a working meeting, on the occasion of meetings of the Ministers' representatives, for the purpose of holding a detailed exchange of views with the representatives of the European Parliament.
  4. 4. The Presidency will regularly provide oral or written information to the European Parliament. It will also, as agreed, provide information to the national Parliaments through the Conference of bodies concerned with Community affairs (COSAC).
  5. 5. The European Parliament's association will begin with an invitation to the President of the European Parliament and two representatives of the European Parliament to the opening of the IGC in Turin on 29 March 1996".
Anybody trying to equate that statement with the Government's desire that no further powers should be advanced to the European Parliament would be straining all credulity. But it is worse than that. We have a statement from the European Parliament itself—it arrived this morning—which claims that at the Intergovernmental Conference in Turin it did in fact have many new powers that it was determined to use.

The reason that I have gone into this detail is simple. I have given one illustration—and I can give many—of where the Government say one thing and do another. In public and in your Lordships' House, they can growl with righteous independence, but the moment that we come to the real arena within the European Union itself, in either the European Council or the Council of Ministers, or even in COREPER, they achieve very little at all.

It is very difficult to talk about these issues at the present time. One appreciates the Government's difficulties in these matters; but there is a world of difference between disagreeing on a matter of principle and going along with something for the sake of a quiet life or of "being at the centre of Europe" as it is called. Surely, "being at the centre of Europe" in ordinary parlance does not mean that we are thereby debarred from disagreeing from time to time. Why should we not disagree when it is right for us to do so?

In part the difficulty arises from a disinclination to go into too much detail. I believe that we are a very law-abiding country. We have a record which is second to none in Europe in obeying and enforcing the regulations that are imposed on us, whether or not we agree with them. Our main trouble is that our political leaders do not read. Indeed, as the Chancellor of the Exchequer said a little while back as regards Maastricht, Nobody has read it. I have never read it. You should not waste your time unless you are particularly interested in the diplomatic minutiae". What an admission from the head of Her Majesty's Exchequer; from a Minister whose responsibility it is within the United Kingdom meticulously to supervise the complications of the annual Finance Act! Why should foreign legislation, foreign communiqués and treaties be exempt from detailed study? It is the supreme laziness which sooner or later we shall pay for.

Following Turin and the conference which has recently concluded in Verona, what impression does one get? If we are completely honest, and unless we are purblind and completely deafened by the mob, surely the picture is this: that France and Germany have combined together, and have been together by treaty since 1963, with the explicit objective of arriving at an agreement before every Council meeting, every meeting of Foreign Ministers and of the IGC. They are committed to meet together in order to determine the line to be taken.

Your Lordships will recall that it was Herr Kohl himself who, without any prompting, raised the possibility of war. Nobody prompted him to do that. But your Lordships may well conclude that at the moment, because we will not face the facts which have been faced by the noble Viscount, we are already living under Pax Germanica. We shall continue in that direction unless something is done. Let us hope that in the life of this Government or, possibly even that of the next one, something will be done in the interests of the United Kingdom as a whole.

4.45 p.m.

Lord Lester of Herne Hill

My Lords, it is a very great pleasure to have been present to hear the witty, thoughtful, modest and delightfully personal maiden speech made a few moments ago by the noble Baroness, Lady Wilcox. It was made with characteristic humour, vividness and the down-to-earth common sense that I have always associated with her, counting her as an old friend as well as a respected champion of consumer interests. I much look forward to her contributions to the wisdom of this House.

I intervene only to draw attention to the Government's attitude towards the European Court of Justice. I believe that it is an attitude designed to appease the large Europhobic rump of the Conservative Party. It is a regrettable attitude because it gives the impression that the Government wish to curb the Court's supposedly excessive powers because they injure the reputation long enjoyed by this country as a nation which cherishes the independence of the judiciary, the rule of law and the protection of human rights; and because it tends to undermine the vital authority of the independent judiciary in protecting our basic rights as citizens of this country and of Europe.

The Government say in their White Paper that they are: committed to a strong, independent Court without which it would be impossible to ensure even application of Community law, and to prevent abuse of power by the Community institutions". The White Paper goes on to point out that it was the threat of court action by the UK and others in 1994 that led to Italy paying the biggest fine in EC history for breaching milk quota rules. The White Paper observes that in 1995 the European Court found that the European Parliament had abused its powers in relation to the EC budget. The Government also rightly note that the Court: safeguards all Member States by ensuring that partners meet their Community obligations". So far so good.

But in paragraph 37 of the White Paper the Government express their concern about judgments in recent years that they claim have imposed disproportionate costs on governments or business. They claim that the Court's interpretations of laws: sometimes seems to go beyond what the participating Governments intended in framing these laws". They say, with a certain menace, that the Government are: working up a number of proposals to enable the Court to address these concerns better". When I read that I asked the Government to give chapter and verse of the cases that they had in mind where the court had gone too far. The Written Answer given by the noble Baroness, Lady Chalker of Wallasey, on 21st March is instructive and I am grateful for it. The examples given include two cases in which the European Court held that the European Parliament could challenge the legality of the acts of the Commission and of the Council and in which the legality of the European Parliament's acts could also be challenged.

How, I ask myself, can the Government sensibly complain, while purporting to believe in the rule of law, that the European Court has gone too far by requiring that all institutions of the European Union must act within the powers conferred by the treaties, especially when the Treaty of European Union expressly affirmed the effect of these judgments in the new version of Article 173, approved by our own Government at Maastricht, and especially when, as I have already said, the White Paper singles out for favourable mention the Court's finding that the European Parliament had abused its powers in relation to the EC budget?

Other examples given of decisions unwelcome to the Government are four British cases involving breaches of the EC principles of equal pay and equal treatment without sex discrimination, the cases of Garland, Barber, Marshall and Richardson. It is astonishing that the Government should give those as instances where the Court supposedly went beyond what was intended by the framers of the EC treaty and the equality directives. It shows that the Government's real objection is to the equality principles in the Treaty of Rome and in the directives signed by previous governments rather than to the Court's interpretations of those principles.

Perhaps I may explain briefly that in the Garland case the conclusion of the European Court of Justice was so obvious and so predictable that the Law Lords, led by Lord Diplock, criticised counsel for not having relied upon Community law at an earlier stage in the English proceedings. The Barber and Marshall decisions were long foreseen by British judges and British lawyers; namely, that occupational pensions benefits were part of the concept of pay, and that the Equal Treatment Directive forbids sex discrimination in compulsory retirement ages. Very eminent and distinguished British judges contributed to those European judgments, including the noble and learned Lord, Lord Mackenzie-Stuart, and the noble and learned Lord, Lord Slynn of Hadley, whom I am delighted to see in his place.

The decision in the Richardson case that men and women alike are entitled to receive free prescriptions at the same age followed a similar approach towards the relevant directive adopted by the English Court of Appeal in the Thomas case. It is especially inappropriate for the Government to cavil at the result in Richardson as being excessively burdensome—if that is the complaint—for it is the Government, rather than the European Court, who chose to implement that judgment in the most expensive way by providing free prescriptions for men and women at 60 rather than at, say, 63 or 65 years.

I cannot believe that the Government were advised by their own excellent lawyers that the result was likely to be different from what it turned out to be in any of those cases. The Government's implied criticism of the Court as unduly "activist" is unjustified and was firmly rejected by the sub-committee chaired by the noble Lord, Lord Tordoff, of which I was privileged to be a member, on the basis of a careful review of the evidence.

I asked the Government whether any of the proposals in the White Paper would involve reducing the Court's powers. In a Written Answer given on 26th March the noble Lord, Lord Chesham, explained that the Government's proposals concerning damages, national time limits and limitation of retrospective effect are designed to reduce the likelihood of the Court delivering judgments which impose disproportionate costs on business and member states.

I am sorry to say that that is a somewhat disingenuous response. What the Government describe as their proposals go no further than the case law developed by the European Court of Justice. It is the European Court which has made quite clear that damages will be awarded against a member state only for a manifest and serious breach of its obligations; it is the Court which has ruled that national time limits must be applied in all cases based on EC law except where the member state's failure to implement a directive is a serious and manifest breach of its obligations; and it is the Court which has held that it will limit the retrospective temporal application of its judgments in appropriate cases to achieve legal certainty.

The Government's muddled and unprincipled approach to this issue is typified by the fact that they actually want to give the European Court controversial powers to decide what are essentially political rather than legal questions. The White Paper proposes a treaty provision, clarifying the application of subsidiarity in the interpretation of EC law", to ensure that the principle is fully taken into account by the Court when deciding cases. Deciding where to draw the line between matters to be legislated upon at a European or at a national level is surely a political rather than a judicial question. The sub-committee concluded that it is not a question which could properly be decided by the European Court. It is curious to find the Government favouring increasing the Court's powers in this political area.

I am sorry to say that it is also deeply dispiriting to me that the Government are now lobbying in Strasbourg to weaken the jurisprudence of the other European Court, the Court of Human Rights, seeking to persuade other governments to join in passing a resolution to put pressure on that Court to give governments a wide margin of appreciation or discretion when they interfere with fundamental human rights. It breaches the vital principle of the separation of powers for Ministers to seek to persuade their colleagues to join them in exerting pressure on the European Court of Human Rights in that way and it sends an untimely message of support for the so-called "variable geometry" of human rights to the fledging democracies of central and eastern Europe. "Variable geometry" is music to the ears of those who yearn to exercise arbitrary power in any part of the world.

The implications of enlargement for the two European Courts require urgently to be addressed by a group of independent experts of the kind recommended by the sub-committee. That would provide a proper foundation for the important and difficult decisions that must be taken if we are to preserve and strengthen the rule of law and human rights protection across Europe; one which will not be provided by the specious debating points made in the White Paper, nor by the misguided attempts at intergovernmental level to reduce the influence of the two European Courts.

4.56 p.m.

Lord Chalfont

My Lords, although the noble Baroness, Lady Chalker, cautioned us against exaggerating the importance of the Intergovernmental Conference, I venture to suggest that the White Paper is one of unparalleled political and constitutional significance and one which we should take very seriously indeed. I speak not as, on the one hand, a Euro-fanatic, nor, on the other hand, a Euro-sceptic, so I shall not address today questions of federalism, confederalism, referenda or even qualified majority voting.

I am sorry that the noble Lord, Lord Richard, is temporarily not in his place because I was somewhat puzzled by his analysis of the Government's attitude towards qualified majority voting. He seemed to suggest that there was something wrong with the position in which the Government were in a minority of one and where some of their major partners in Europe were in disagreement. I see nothing wrong with that position. There is nothing wrong in being in a minority of one if you believe that the policies that you are advocating are right. Perhaps I might suggest an answer to the noble Lord's question of why some of our partners in Europe are so keen on changing qualified majority voting. It may be that they are keener on strengthening the institutions of Europe and bringing Europe closer to political integration than are Her Majesty's Government. The noble Lord was perhaps a little off target when he attacked the Government on that basis.

I should like to concentrate on only one aspect of the White Paper, defence and security. I know that the legislative, economic and monetary aspects are important, but I concentrate on defence because it goes right to the heart of national sovereignty. The most important role that any democratically elected government can have is to ensure the safety and security of their people, without which none of the other policies means very much at all.

In that context, perhaps I may say that when I first saw the terms of the Maastricht Treaty one article in it immediately rang loud alarm bells in my mind. I refer to Article J.4 which I read in its entirety: The common foreign and security policy shall include all questions related to the security of the Union, including the eventual framing of a common defence policy"— here the alarm bells really begin to ring— which might in time lead to a common defence". To anyone who had passed through the travails of multilateral forces, multilateral nuclear deterrents and all the other fallacies of some kind of European-based common defence policy, this was extremely alarming. On the other hand, from reading the White Paper, especially those paragraphs dealing with defence and Annex D (the memorandum placed in the Libraries of both Houses in the spring of last year) I believe that the Government have taken a robust and clearly thought-out line which deserves the support of everyone committed to the effective defence and security of the United Kingdom. They have made one basic and, in my view, unassailable assumption from which intelligent defence policies must surely flow. I refer to paragraph 44 on page 20 of the White Paper, the relevant sentence of which reads: Decisions to send service men and women to risk their lives are for national Governments, accountable to national Parliaments. They are not matters for decision in the European Union". From that unexceptionable premise the Government have been led to a number of conclusions which are reflected in the White Paper. They include recognition of the overriding importance of the Atlantic Alliance and NATO as a keystone to our security and an effective but limited role for the Western European Union as the European pillar of the Western Alliance. They have recognised that it is wasteful to develop separate European military structures, and they have underlined and underpinned all that with a declaration that the nation state should be the basic building block of the international community.

I believe that that approach does much to defuse the alarm experienced by some of us as a result of the strangely imprecise and somewhat sinister Article J.4, with its reference to a common European defence policy, possibly leading to a common defence. If that means, as I know a number of colleagues in Europe believe, a Community-wide defence involving complete European Union control of procurement, deployment and decision-making—which is what a common defence means—it should be resisted with all the strength and determination at our command.

The White Paper suggests that the Government substantially agree with that view. In any review of the Maastricht Treaty, which is the main object of the IGC, I hope that they will not resile from the clear proposition that they advance at the end of paragraph 45 on page 21 of the White Paper. Referring to the Western European Union (about which a number of hairbrained suggestions have been made), the White Paper states: Its separate, intergovernmental treaty base ensures that decisions on defence policy are taken by consensus and remain where they belong—with sovereign nation states". That seems to me to be a healthy, clear-sighted and pragmatically sensible view of defence within the European Union.

My concerns go a little wider than simply the arrangements within the Union. I hope that the somewhat inward-looking culture of the European Union will not allow attention to be distracted from the Atlantic dimension of this. I declare an interest here, although not of a financial nature. I am on the international advisory board of the New Atlantic Initiative which is to hold a conference in Prague later this year and is designed inter alia to draw attention to the Atlantic dimension of the security of Europe and the West.

In that context, in recent post-cold war years the record of co-operation between the United States, as one pillar of the alliance, and the European pillar of the alliance does not inspire great confidence. There has been inadequate support for the sometimes unstable political and economic systems of central Europe. There has also been some disgraceful—I hope that that is not too strong a word—foot-dragging over enlargement of the North Atlantic Treaty Organisation. There has been some serious bungling and sheer incompetence in former Yugoslavia which has led to serious divisions within the alliance. Much more important and alarming in the long run, there has been an apparent inability in the Atlantic Alliance as a whole to form a clear and unified response to alarming political developments in post-cold war Russia. We just do not seem to know what is going on there; and even when we do know we do not seem to know what to do about it.

In conclusion, I believe that we need to understand and reaffirm the indivisibility of the defence and security interests of Europe and North America. At the moment there is far too much talk, especially in Europe, about those matters that Europe might be doing on its own. I believe that not only should we welcome and strengthen the links between Europe and North America but be prepared to welcome strong global American leadership, without which the long-term security of Europe cannot be adequately guaranteed. I believe that we should not follow the modern trendy habit of engaging in small-minded whingeing about the strength of the United States and regarding it as some kind of juggernaut. When listening to the utterances of anti-American people in this country, sometimes one thinks that they are the pronouncements of the Ayatollah Khomeini from Teheran.

It may be argued that what we need—I believe that the Government have accepted this in their White Paper in preparation for the IGC—are new Atlantic institutions far more than new European institutions. In that context, I return to the memorandum reproduced as Annex D to the White Paper which was placed in the Libraries of both Houses last spring. The noble Baroness, Lady Chalker, has already made reference to it. I refer to paragraph 8 on page 34 of the White Paper where we see the following important policy statement: the Government believes that defence of the territory of NATO Member States should remain a matter for NATO, in accordance with Article 5 of the Washington Treaty. NATO is the bedrock of our common defence against threats to our territorial integrity and that of our Allies". I hope that the Minister can assure the House when she comes to reply that that will be the firm philosophical basis upon which Her Majesty's Government will discuss matters of defence and security at the IGC.

5.10 p.m.

Lord Bowness

My Lords, it is a privilege to be able to address your Lordships' House this afternoon. I trust that I shall be able to do so within the accepted customs and practices of a maiden speech, although I fear that it will be difficult to follow and compete with the contribution made by the first maiden speaker, my noble friend Lady Wilcox.

The matters about which I wish to speak are, against the background of the total agenda of the IGC, perhaps small, although of considerable interest to local and regional government across the EU, including that in the UK. I refer to the future arrangements for the Committee of the Regions of the EU. At this stage I should perhaps declare my interest as a member of the UK delegation to that committee and as a member of an English local authority—Croydon Borough Council.

The Committee of the Regions is not referred to in the Government's White Paper, although, as I understand it, part of the IGC's role is to review the institutions, organisations, and procedures of the Union. The committee is not an institution like the European Parliament but, as your Lordships will know, is an advisory body comprising representatives from local and regional government across the Union, set up by the Treaty of Maastricht to give those local and regional representatives the opportunity to comment upon policies and proposed legislation.

The treaty specifies the matters which the Council of Ministers and the Commission must refer to the committee for an opinion. The committee has a right to issue opinions on matters referred also to the Economic and Social Committee, and, perhaps most important, by virtue of the treaty, to issue opinions on its own initiative.

The committee is still very new, and in the opinion of some people has still to justify its experience, but there is evidence that in its short life it is proving to be effective. During the first two years of its existence, 65 main opinions have been given—35 in response to referrals and a further 30 on its own initiative. The committee and the Commission have set up a monitoring system to try to judge the effect of those opinions.

Of the 65 main opinions, 16 related to regional and local economic development, economic and social cohesion, or the structural funds. On at least 12 occasions, those opinions have had an effect upon the final text adopted by the Council or the Commission. In other areas, there is evidence of successful influence.

Your Lordships may wonder why the Government or the House should concern themselves with these matters. I believe, and I hope that other Members of your Lordships' House who with me are members of the Committee of the Regions—my noble friend Lord Kenyon, the noble Lord, Lord Tope, and the noble Baroness, Lady Farrington of Ribbleton, who is not present this afternoon—will confirm that, quite apart from the interests of local government in the UK, it will be of concern to local and regional government in other member states.

The diverse systems of local and regional government throughout the Union mean that some members of the Committee of the Regions enjoy a degree of political importance within their own countries. So, while a former leader of a borough council, and still less a former opposition leader, does not bear comparison with a Minister President of a German Land, or a member of such distinction as to be elected to the presidency of Portugal, your Lordships will understand that within that body such powerful figures carry weight in their own countries and share a commitment to the Committee of the Regions. Its future arrangements are very much on their agenda.

The committee's representations to the reflection group preparing for the IGC have included the raising of the committee's status to that of an institution, and the right of reference to the Court of Justice if it feels that its rights or the rights of its members with legislative powers are infringed. At one stage, co-decision with the European Parliament was mooted.

UK members, almost unanimously, supported a more modest, and, in our view, realistic approach, and one which will build upon the committee's success rather than one which is over-ambitious. We have sought the separation of the administration of the committee from joint working with the Economic and Social Committee—something which caused considerable difficulties in the first two years; a requirement that in the future members hold a locally elected mandate or are directly answerable to a directly elected local authority or regional authority during the whole of their term of office; and for the European Parliament to have the right to consult the committee in the same way as the Council of Ministers. That is something which we believe would improve relations between those two bodies.

I should like to emphasise that, while comprising elected members, the members of the COR should not in any way seek to detract from the role or to usurp the position or power of the European Parliament.

Lastly, the Government's commitment to subsidiarity in the White Paper is welcomed. Local government would like it to go a little further than consultation with business and other interested parties, and included a specific reference to local government as a partner in the development of appropriate areas of public policy.

Subsidiarity is not a matter just between the Union and member states but between governments and lower tiers of government administration within those states. I realise that not everyone will be supportive: some may consider that the EU does not need such an institution or organisation, and some may say that it is a trap for the Government to support the concept of regional authorities within the UK. I do not believe that to be necessary. In that, I may not be in agreement with colleagues from the Benches opposite on the Committee of the Regions. I do not believe that support for the Committee of the Regions means support for such authorities in the UK.

Certainly, UK local authorities are learning to work together so that they may benefit from certain European initiatives. They are doing that without the creation of another tier of government. Whatever one's view of the EU—provided that one is not advocating withdrawal—however much or however little is done at European level, Europe needs its institutions, its rules and its laws, and it cannot function in some ad hoc fashion. It is, as the White Paper makes out, more than a giant trade pact, and so it should be if the main objects of peace and stability are to be achieved. Proposals may be disagreed with, but we should not disparage the proposers or their visions of a European future.

The Committee of the Regions is—to use the phrase of my noble friend the Minister—a little nut or bolt in the EU which enables local and regional government to have an advisory role in the affairs of Europe. It represents a tier of government which is close to the people of Europe. It can help make the EU relevant to the people. The very stuff of local government is often at the heart of people's daily concerns. It has therefore, in my respectful submission, a place in the political activity of the Union. As someone who has the privilege of playing, albeit a small part, in three levels of political activity—local, here in your Lordships' House, and in a European body—I hope that each of those levels will come to appreciate that it has nothing to fear from the others. For all those reasons, I request my noble friend the Minister to remember the modest but important wishes of UK local government in these matters.

5.17 p.m.

Lord Bridges

My Lords, it is my pleasant duty to thank the noble Lord, Lord Bowness, for his most interesting maiden speech. From what we have heard him say, it is clear that he can contribute much to the business of the House. His long and distinguished career as a solicitor and his membership of the Committee of the Regions enables him to bring to our deliberations some first hand knowledge which many of us do not possess. I have long wondered what happens in the Committee of the Regions. I am delighted to hear of the work that it does, which is designed to improve European legislation—something which is taken seriously in this House, in the Select Committee and elsewhere.

I must begin by thanking the Minister for meeting the request made in the report of the Select Committee on the IGC, that the Government publish a White Paper in advance of the conference, and that there should be a debate. In making that recommendation, I do not believe the Select Committee realised how difficult it might be for the Government to comply, since that, it seems, would mean exposing their policy to further criticism from among their own ranks in another place. That was not my intention. I believe that the Government have taken the right decision by setting out their views in the White Paper. That is valuable for Parliament, the nation and the other member states of the EU, as the attitude and approach of all governments need to be taken into account if a satisfactory agreement is to be reached at the conference.

I do not propose to contrast the White Paper with the opinion of the Select Committee. That would be a lengthy task and perhaps others may wish to do so. However, I noted with surprise that the Minister said little about the committee's report. I do not myself detect a wide divergence between the two documents. Both seek to concentrate on improvements to the way of operating Community institutions in the light of experience and on anticipating the changes which will be required as a result of the next enlargement.

I should like to venture one general comment on the Government's approach. As one would expect, their document is a carefully expressed, matter-of-fact kind of paper based on our experience as a member state during the past 23 years. But to my mind there is a missing element. The Union is not just an administrative arrangement between the European states concerned. It also involves an idea and the ideals which accompany it; namely, the creation of a new form of political society—neither single nation state, nor federation, nor confederation. The success or failure of the venture will ultimately depend upon the success of the idea, which is strongly supported in France, Germany, Italy and in the Benelux union. One reason for our political difficulties in Europe is that the European idea, which seemed so promising in 1973, has not prospered in this country as it has among our neighbours. Of course, basic concepts of that kind will not flourish as a result of artificial puffs by government departments. But the Government can help powerfully by showing their own serious purpose and determination to succeed. It is that sense of wholehearted commitment which is lacking from the White Paper.

There are, of course, some genteel bows in that direction but they are qualified by phrases such as that in paragraph 6, which states: Above all, we shall be guided by a cool assessment of the British interest". To that one might reply, citing the poet Wordsworth, Give all thou canst, High Heaven rejects the lore of nicely calculated less or more". Or, if one does not care for that wordy poet, one may follow the injunction of the psalmist to, lift up thine eyes unto the hills, from whence cometh our help". Some might say that that is the most appropriate quarter for the Government to turn to at present, but I would not go as far as that. One must remember that some of the farmers in the hills keep cattle. However, I suggest that if our European affairs are to prosper some more overt enthusiasm for and interest in the European idea would not come amiss.

Here I must anticipate a riposte from the noble Lord, Lord Beloff, who contributed an interesting review article to the Financial Times 10 days ago when reviewing a book about the history of the British Empire. He ended with the words: In the end, history is about what happened, not feelings". Of course, that is right but I suggest to the noble Lord that feelings may strongly influence what happens.

As an example of that I quote General de Gaulle, who told us in his memoirs that he was inspired in early manhood by what he called une certaine idée de la France. It was that burning light of idealism about the renovation of his own country which sustained him over many years and led him to achieve so much for his nation.

Another interesting reflection was made by the French historian Albert Sorel when writing about Britain before the First World War. He wrote the following rather penetrating paragraph: The British only undertake war for commercial reasons. War interrupts commerce and compromises it. They only decide to fight when their interests seem to them to be under grave threat. But then they throw themselves into the fight because they judge themselves compelled to do so and they bring to war a serious and concentrated passion with an animosity all the more tenacious because the motive is in proportion to their interest. Their history is full of these alternations, from an indifference which makes one believe in their decadence, to a passionate commitment which disconcerts their enemies. We see them by turns abandoning Europe and dominating it, or neglecting the largest issues on the Continent and seeking to direct the most trivial affairs, moving from complete peace to all-out war". We all recognise in those sentences that spirit which was last evoked for us by the noble Baroness, Lady Thatcher, at the time of the Falklands War. I quote the passage in order to cite Sorel's belief, which I believe to be correct, in seeing our motives as a nation as largely empirical, derived from circumstances rather than from ideals.

A different and more flattering version of our behaviour appeared last year in Dr. Kissinger's blockbuster volume entitled Diplomacy. It is, in fact, a history of foreign policy, which is a rather different subject. Dr. Kissinger is most interesting. He admires the diplomatic method of Palmerston and Disraeli, describing it as, a disciplined aloofness from disputes and a ruthless commitment to the equilibrium in the face of threats". He continues: America would find it quite difficult to marshal either the aloofness or the ruthlessness, not to mention the willingness to interpret international affairs strictly in terms of power". Dr. Kissinger's book is, in fact, a critique of American foreign policy above all for its failure to operate a balance of power system and for its too frequent recourse to moral principles in the conduct of international relations.

It is my belief that the balance of power system as practised by Britain in centuries past is now over. What we have today is a collective security system which has essentially worked since 1945. We also live in a world of intense economic competition which has encouraged the growth of trading blocs of which the European Union is perhaps the most successful to date. We should all recognise the great change in our traditional attitudes which this requires. One senses that as one walks over Westminster Bridge. If one stops in front of the statue of Queen Boudicca one can read the lines by William Cowper engraved on the plinth: Regions Caesar never knew Thy posterity shall sway". It is hard to read these lines without a twinge of melancholy, history having moved in the opposite direction. We confirmed that move when we signed and ratified the Treaty of Accession in 1973.

We need to recognise that fact and to support the European Union with more interest and enthusiasm if we are to make the new system work to our full advantage. If we ourselves examine every Commission proposal on the basis of cost-benefit analysis in the national interest we can hardly be surprised if others do the same when we ask for Community solidarity and help in special circumstances, as over beef. A fuller sense of interest and enthusiasm would help and I do not see as much of that in the White Paper as I would like.

There are three other matters on which I wish to touch more briefly. The first is the question of the two-tier Community. That was mentioned by the noble Lord, Lord Ezra, and I agree with his line of argument. The Government seem confident in their view that the opt-out from the Social Chapter is an essential safeguard. They have now broadened this attitude to embrace the need for all member states to have the freedom to choose whether to participate in particular policies. That amounts to Europe à la carte, an approach strongly criticised by most member states. It does not look as though the Government's position on this matter will be negotiable at the Intergovernmental Conference. I am not sure that our present formulation is wise, since it amounts to acceptance under another label of the long-standing French notion of a "two-speed Europe", or variable geometry.

The problem about such concepts is that one will end up with a core Europe, based on Germany, France and some of their close neighbours, and an outer group including Britain. It does not take much imagination to foresee that the inner group will determine the broad policy outline and that the outer group will be obliged to accept or reject what is on offer. That appears to be the kind of situation reached by the Finance Ministers at their meeting in Verona in the past few days when discussing the future of the new exchange rate mechanism. Surely the only safe way to proceed is by being a member of the inner group which determines policy in the first place.

I turn next to parliamentary scrutiny of draft legislation by national parliaments. The White Paper is right to draw attention to that subject, which receives increasing attention from our colleagues in other European legislatures. It would be helpful if the Intergovernmental Conference could reach a decision which emphasises the need for the Commission and other EC bodies to do all that they can to facilitate proper scrutiny by national parliaments. The greatest difficulty that we have at present is in receiving the texts of draft legislation in national languages in good time. Unless that is done, effective scrutiny is not possible. That has been explained to the Government by our own Select Committee on several occasions in the past year and I believe that the Government understand the nature of the problem.

Finally, I emphasise my personal opinion that one of our most urgent tasks is to overcome what I may call the security vacuum in Eastern Europe. The collapse of the Communist system and the Warsaw Pact means that there is no effective security guarantor on the Western frontier of the former USSR, where there are some difficult and unresolved territorial issues which could readily give rise to dangerous disturbances. Those range from, at the northern Baltic end, Klaipeda, formerly Memel, and Kaliningrad, formerly KÕnigsberg, to Moldova, formerly Bessarabia, at the Black Sea end. To prevent those flashpoints from becoming something more serious, we need a security understanding, perhaps a new body or one based on the OCSE, to which all could turn in the event of difficulty.

I heard what my noble friend Lord Chalfont said about the international dimension of those security organisations. I have no wish to detract from the valuable role which NATO plays. But it can be argued that we need a body which works in conjunction with NATO or, to some degree, on behalf of it, which could provide the kind of mechanism we need in order to prevent disturbance in that very tense area. That will be an urgent task for the second pillar and I should hope to see the various measures mentioned in the White Paper put in hand as soon as possible so that we can install a body charged with those responsibilities.

I do not believe personally that it would be wise to extend the membership of NATO itself so that it touches the western Russian frontier. That could all too easily provide a target for some of the new Russian nationalists whom we read of as candidates in the forthcoming Russian elections.

5.32 p.m.

Lord Howe of Aberavon

My Lords, I commence with some words of thanks. First, I have a double-barrelled message of thanks and congratulations to my two noble friends Lady Wilcox and Lord Bowness on their outstanding and diverse maiden speeches. They illustrate a range of personality and experience and I hope that we shall hear from them often, with great pleasure.

Secondly, I thank my noble friend Lady Chalker for her calm and lucid presentation of the Government's case, including a reminder of the ever-crucial objectives which lie ahead; for example, enlargement, reform of the CAP, competitiveness and so on.

Finally, I thank Her Majesty's Government for the White Paper with its important emphasis on the British approach to the IGC because that description implies, even if it does not acknowledge, the need in this field above every other for the Government to identify and pursue a policy which commands the widest possible cross-party coalition support in both Houses of Parliament.

Experience under successive governments has shown how difficult it is to rely on what might often, if not always, be an inadequate majority of any single party in the other place. It really has always been thus. There has been no doubt about the core of policy to which our country wished to commit itself from the days of Macmillan to the days of my right honourable friend Edward Heath, as we took the legislation through Parliament together, to my noble friend Lady Thatcher and, indeed, to the present Prime Minister. My noble friend Lady Thatcher spoke of our destiny as being in Europe, as part of the Community, in her Bruges speech. My right honourable friend the Prime Minister spoke of being: at the very heart of Europe, working with our partners in building the future". That means that it is with regret that I part company with my noble friend, if I may so describe a fellow freeman of the Borough of Port Talbot, Lord Tonypandy. He wishes to challenge that common ground. I am not impressed in favour of his case by the identity of the expert witnesses whom he cited. Nor am I overcome with terror by his reliance on the evidence of my personal friend, Norman Lamont. There is a good deal less solidarity among ex-Chancellors than there is among ex-Speakers of the House of Commons.

Seriously, my anxiety is the risk that Britain's approach to the IGC may be perceived as being hedged about by unduly absolutist, negative commitments so that we appear to be resisting any enhancement of the role of Brussels in any field and resisting any increase in qualified majority voting in the Council of Ministers. My anxiety is that that approach, seen in that way, risks reinforcing the view in European capitals that Britain is far from being—I coin a phrase—"a man with whom I can do business".

But almost more important is that that apparent absolutism risks weakening the legitimacy of many important points which we should be and are making; for example, along the lines of the committee chaired by the noble Lord, Lord Tordoff, as well as in the White Paper, that there is a need for the European Parliament to begin to use its new powers effectively before it can expect to be given a substantially larger legislative role, a need to give a growing role to national parliaments and a further entrenchment of subsidiarity. To my pleasurable surprise, I found myself agreeing with the noble Lord, Lord Bruce of Donington, on both those points. But sometimes, his very rhetoric risks the points being perceived as less important than they really are.

The serious consequence of that is that the continental agenda may be moving on to find ways in which to outmanoeuvre this country. For example, in Bonn, there is an increasing tendency to think in terms of creating the two-speed Europe to which several noble Lords have already referred, with those either unwilling or unable to go further and faster being excluded from the top table. That was a point made by the noble Lords, Lord Ezra and Lord Bridges. Indeed, Bonn has already secured the agreement of Paris to the possibility of that approach, which was unveiled first after the meeting between Chancellor Kohl and President Chirac at Baden-Baden before Christmas.

All that risks producing an ironic result because the IGC is now perhaps unlikely to focus on the conversion of the European Union into a federal European state, as Bonn may have originally wanted. To that extent, that would be a success for this country. But the corresponding risk is that it might be likely to focus instead on the development of a made-to-measure core Europe for a smaller number of ambitious states which are moving forward on their own terms. That risks converting our success in advocating reluctance to accept a federal Europe into a reverse, in the opposite direction. A multi-speed, multi-track, multi-layered Europe was, in the first instance, a vision offered by this country. The problem is that we can hardly object if others pick up that idea and run with it to their advantage. We cannot insist realistically that the use of any such further and faster co-operation clause should require a safety-catch of unanimity every time that it is used.

That is why we need to steer clear of the risk of being perceived as adopting an attitude of defensive absolutism. We must recognise the way in which Britain has, ever since 1972, played a significant role in shaping the policies and design of the European Union. How have we succeeded as far as we have in that way? On previous occasions we have taken care to avoid boxing ourselves into a non-negotiable position. That is the real danger of apparent absolutism on our part which can spring from a too easy adoption of the language and tone of Europhobia.

For example, my noble friend Lady Thatcher and I avoided, I think, that hazard in our approach to the Luxembourg IGC which produced the Single European Act of 1985. We left no doubt about our enthusiasm for the positive achievement of a single market. Even while we argued against Treaty amendment, we expressed a willingness to see real changes in decision-making procedures towards a common objective. It should even now be possible for the Government to re-establish the same kind of positive and pragmatic approach without conceding any ground that should not be conceded. Of course that requires an explicit acceptance that membership of the European Union involves sharing sovereignty in defined areas. It requires the acknowledgment of the unique reality of the European Union as it is rather than the contention that it is no more than a set of independent states operating exclusively on intergovernmental lines.

It must be said that, by those standards, the White Paper is written in language which looks unobjectionable but which appears inadequate on closer examination. At no point, for example, does it provide a clear description of what European integration is. It uses metaphorical terms when it says that, the bed-rock of the European Union is the independent, democratic nation state". That does not help the analysis. However, we are certainly entitled to say, as my noble friend did, that the nation state is the principal focus of democratic legitimacy; and, indeed, as M. Juppé also said. But it is surely misleading and inadequate to describe the nation state as the, bed-rock of the European Union". If one tried to identify the bed-rock, one would probably identify: A common system of law governing those aspects of economic and political life which are European rather than national". That is the unique feature of the system and that is why I welcome the Government's clear recognition au fond—despite the comments understandably made by the noble Lord, Lord Lester of Herne Hill—of the importance of the role of the European Court. The risk is that we might encourage people to revert to the old argument—the false Manichaeanism of choosing, on the one hand, between, a federal European super state", or, a Europe of independent sovereign nations". It is not as simple as that. We must have the courage and the candour to recognise and to assert that the European Union is a completely novel form of political entity. It is essential to demonstrate in that novel form our willingness to negotiate constructively—a willingness to make at least some concessions, on the right issues, even if we stand firm on other issues with equal certainty. One of those issues is indeed that of qualified majority voting. The noble Lord, Lord Richard, drew attention to the hazard of a single state standing in the way of progress, as Malta did in the CSCE negotiations over many years. He also spoke about the need for us to make headway on the CAP.

My anxiety is that the White Paper may do less than justice to the Government's own position by not defining it as confidently or as clearly as it could or should. Instead of appearing to reiterate an ostensibly immobile stance of "no extension" as a matter of principle, I believe that the White Paper would have done better to quote my right honourable friend the Foreign Secretary who testified to the European Legislation Committee in another place on 13th February and there asserted a different and much more positive position. He said: If you say that in future there were other strategic British interests which could only be achieved by qualified majority voting, yes, then there might be an argument for going in that direction; I would not exclude that". That insight into the mind of the Foreign Secretary has been reinforced—or so it appears—by the Prime Minister's apparently more open position in his last statements on the matter. A reluctance to formulate policy in such more positive terms indicates, possibly, the extent to which Eurosceptic intimidation risks limiting the Government's ability to retain and, indeed, assert the room for manoeuvre which is crucial.

Her Majesty's Government could do themselves a good service by pointing out that the emerging area of dispute on QMV is now actually much narrower than might appear from the White Paper. We are moving on to common ground and there are serious dangers in not acknowledging that fact. It risks turning into question principle issues upon which negotiation is and should be possible; and thus actually risks devaluing our ability to defend those other positions which really matter, simply because the number of non-negotiable points has apparently become indigestibly long.

As my noble friend Lady Thatcher and I discovered in Luxembourg and as my right honourable friend the Prime Minister confirmed at Maastricht, the real world of negotiation does not work like that. Along the more candid, more courageous lines of the real world it should certainly be possible to find a common way forward that is entirely consistent with British interests (as those would be defined by a substantial majority in both Houses of Parliament). France is not the only country that could be ready to back compromise solutions of that kind—we could, if we have the courage to reach out for them.

The "multi-speed Europe" was intended, sensibly enough, to lead to a variegated pattern of intergovernmental co-operation, involving different states in different ways. The risk always was that it might offer a route map towards a closer union of a small group of states from which we should be excluded. The risk is that that kind of isolation, which we have avoided for so long, could become the general pattern of European relations—and that notwithstanding the fact that such an outcome (our exclusion from Europe) would be out of line with the view of a substantial majority in both Houses of Parliament and indeed, I am convinced, out of line with the view of our people at large. Some people, although only a few, might be tempted to herald that as a triumph for British diplomacy. In fact, it would be a defeat of significant proportions.

However, I am totally confident that Her Majesty's present Government would not wish to bring about a result of that kind. The negotiations now under way still offer a real chance of averting the risk of such a disaster. Those who govern this country during the next two years or so—beginning, and I hope continuing, with Her Majesty's present Government—must be sure to recognise, to seize and to exploit the continuing opportunity that lies before us.

5.46 p.m.

Lord Stoddart of Swindon

My Lords, the House was rightly interested in the speech we have just heard. In fact, I thought that we were making progress when the noble and learned Lord agreed with my noble friend Lord Bruce of Donington on even one point. However, when the noble and learned Lord talks about sharing sovereignty, I should tell him that I really do not believe that that can happen. I believe that we either have or do not have sovereignty; it is not something which can be shared.

However, like other noble Lords, I welcome the White Paper for itself. Indeed, I believe that we are probably lucky to have one at all. Had it not been for the pressure of what I like to term the "Euro-realists"— that is, the Back-Bench Euro-realists—we probably would not have had a White Paper. I certainly believe that the Government, or many of its members, were opposed to producing a White Paper on the IGC. But the importance of the subject is underlined by the large number of noble Lords who have spoken so far in today's debate. We have heard many notable speeches both from the two maiden speakers and from the noble Viscount, Lord Tonypandy, with whose remarks I entirely agree.

Many references have been made to our European partners. Anyone who continues to believe that they are our partners rather than our competitors after their extraordinary, brutal and self-interested behaviour over the beef crisis must now surely revise his views. That is especially so after the weekend revelation by the European Union Agriculture Commissioner that the world ban on British beef was not imposed on grounds that it was dangerous to health, but on the basis that not to do so might be injurious to the interests of continental beef producers. So the British Beef industry, and its associated industries, were to be sacrificed to protect the commercial interests of EU farmers and industrialists outside the UK—not to protect the health of the people, because there was no health risk. Some partners these! In my view, which I have held for a very long period of time, the sooner we get rid of them the better.

The noble Lord, Lord Lester, who is temporarily absent from the Chamber, made criticism of the so-called "Europhobes" on the Back Benches opposite. I do not think they are Europhobes. As I have just said, I think they are Euro-realists. However, we need not be too worried about them. The "phobes" we need to worry about are the Anglophobes across the Channel. As I said, we have seen what can happen as regards the beef crisis. That has been educative in many ways.

For example, how many noble Lords and others realised that such awesome power has been handed over to the European Union as regards our trade and great industries, a power which ranges over a much wider field than the beef industry or farming as a whole? But of course the White Paper does not deal with power, wilfully and in dereliction of their duty to maintain Parliament's sovereignty, which has been handed over in the past by Members of both Houses of Parliament. The White Paper refers to further powers being demanded by those whose ambition it is to create "a country called Europe". That is a phrase we are increasingly hearing not only in Europe but on British television in Britain. It is these people up to now, and the people who have this ambition, who have been in the ascendant. They have been gradually getting their way. Indeed, I must tell the noble Baroness that by signing the Turin communiquéé the Government have already accepted the federalist agenda and conceded the principle that the European Parliament will be closely associated with the work of the IGC, and will have its views considered. The Government have quickly caved in to early pressure.

There are certainly some parts of the White Paper with which I can agree, or at least I can tolerate. Some reflect the recommendations of the intergovernmental sub-committee of the European Communities Committee of your Lordships' House upon which I had the honour to serve. Indeed, if the British approach set out in paragraph 6 on page 4 of the White Paper means that the Government believe in a Europe of freely co-operating states unencumbered by creeping federal ambition or a centralised power-hungry bureaucracy and a return to Parliament of its sovereign status, I could even welcome that statement. Perhaps when the noble Baroness replies to the debate she can tell me whether my interpretation of the White Paper in that regard is correct. What is quite certain, however, is that it is not the view of the Germans and the other European countries, including France.

Herr Kohl and his henchmen have made it abundantly clear that they believe the day of the nation state is past and they want to kill it off. They make no secret of their ambition for "a country called Europe"—a new state complete with flag, anthem, a central government, its own currency, a uniform economic and monetary policy, a foreign policy and, of course, its own army. Naturally all this would be under German suzerainty. These are the same people who rail against the nation state. Indeed, they seem to want us to forget that it was not the nation state that caused the problems in Europe in the 1930s and the war of 1939 to 1945; it was German imperialism which caused that war and caused the difficulties. Let us not forget that point of history and let us not run down the nation state which has worked pretty well over a long period of time.

Can the noble Baroness assure me and the House that this Germano/Continental vision of Europe will be firmly rejected and that the Germans and the French in particular will be told quite bluntly that if they persist in pursuing this nightmare scenario they will do so without Britain? In the last analysis the Government will find that the threat of secession will do much to cure their ambitions. Even the Chancellor of the Exchequer after his ungentlemanly drubbing at Verona may now have his eyes opened to the real intentions of the Europeanists, although, as my noble friend pointed out earlier, if he had bothered to read the Maastricht Treaty he would have known their intentions right from the start. The Chancellor should have consulted the noble Lord, Lord Cockfield, who is good at interpreting treaties, before he made the statement that he had never read the treaty.

Noble Lords need not be worried about Britain going it alone. We heard that from the noble Viscount, Lord Tonypandy. We are often told that 60 per cent. of our trade is with Europe. That simply is not true. Only 44 per cent. of our total trade is with Europe, if visibles and invisibles are taken together. Inward investment comes to Britain not because of Europe but in spite of Europe because the attractions are in many other directions rather than our membership of a European Union. Our English language and our good, trained, loyal workforce are all matters which foreign companies know of and come here to take advantage of. If we got rid of the huge trade deficit with the EU and if we did not have to pay the £3.5 billion net every year, we could enjoy cheaper food prices and be rid of the bureaucratic stifling Euro-legislation. We could blossom and flower in the world where the real opportunities lie, especially if we did so in concert with the Commonwealth.

The Norwegians were told the same story when they held their referendum. The Norwegians were told that if they did not enter the European Union the country would collapse. But what has happened since Norway rejected the idea of going into Europe? Instead of being ruined Norway is thriving. Inflation is 2 per cent., growth is 4.5 per cent. and unemployment is only 3.5 per cent. Norway is booming and those opposed to EU membership now constitute 66 per cent. of the population. Let us contrast that with what is happening in stagnating Europe where unemployment is now endemic and rising.

In the White Paper the Government are clearly of the opinion that there should be no extension of qualified majority voting to any further areas, especially those involving foreign and security policy and home affairs. They will be under pressure to compromise on this issue. The threat of no further enlargement will be used by the federalists to get their way. I hope that under no circumstances will the Government compromise one iota. It will be better to have no enlargement in Europe than to compromise our sovereignty even further. In any event, once the people of the applicant countries realise the price of entry, they may not want to join.

Many people are concerned about the European Court of Justice. That has been mentioned by a number of speakers this afternoon. They are concerned about the judgments and the costs they impose. Indeed, the Government themselves are worried and are seeking changes in the way the court works and the retrospective nature of some of its judgments. The Government are shortly to issue a memorandum setting out their proposals in detail. We await that with interest. But will those proposals contain ideas to deal with the entirely unacceptable situation where the ECJ has the right to overturn an Act of Parliament? That is clearly a position which cannot be allowed to continue. I hope that the noble Baroness will give an assurance that that will be one of the matters the Government will wish to achieve.

I also find the Government's policy to resist giving further powers to the European Parliament somewhat encouraging, especially bearing in mind that many of its members want a European state, a European Government and the European Parliament as the major legislative arm. I always knew that a directly elected European Parliament would become precocious, avid for power and ambitious to replace national parliaments as the seat of democratic legitimacy. That was why I would not support it in the House of Commons; and, indeed, how right I was.

I have a copy of a document outlining a speech made by the European President at the beginning of the IGC. Perhaps I may quote a couple of paragraphs. The document states: The European Parliament's involvement will go far beyond the contribution we were permitted to make during negotiation on the Treaty of Maastricht five years ago; equally the outcome of this Intergovernmental Conference must go far beyond mere adjustments to the Maastricht Treaty". The document continues: Today I do not want to set out in general or in detail the European Parliament's demands". It refers to "demands", not suggestions. Therefore everything that the European Parliament wants is in contradiction to what the Government say they want. They should be very careful indeed before allowing the European Parliament to have any further powers. Indeed, in my view it would be much better if we reverted to the previous situation with a European Assembly nominated by and properly responsible to national parliaments.

Finally, the prime aim for the Government at the IGC should be to stop the rot, to prevent the seepage of further powers from the nation states, in particular from our Parliament, and to make a start on returning many powers already ceded to where they properly belong—back here in our Parliament.

6.2 p.m.

Lord Cockfield

My Lords, one of the problems in participating in the debate is that my noble friend Lady Chalker of Wallasey is much more realistic and constructive on European matters than can be said for the Government as a whole. It follows, therefore, that however much I embarrass her by saying so, I shall need to direct my remarks more to the White Paper which is nominally the subject of this debate than to anything that my noble friend said.

However, before I come to the White Paper, I wish to deal with two issues which have tended to attract a lot of attention in the debate. One is our trade deficit with the European Union. Trade is not bilateral; it is multilateral. Trade is not solely trade in goods; it is also trade in services, and in particular financial services. In the days when my noble and learned friend Lord Howe of Aberavon and I were members of the Government, we had a trade surplus. I can, therefore, talk about these matters without any tinge of guilt. I hope that the position remains today much as it was then. However, the trade deficit that this country had with Japan was enormous. But what happened to the money that Japan earned by exporting goods to the United Kingdom? It spent it in buying oil from the Middle East, because the Japanese have many things but "they ain't got no oil". What did the Middle East do with the money that was paid to it by Japan to buy the oil? It spent it in the United Kingdom; and the United Kingdom, therefore, had a large balance of payments surplus with the Middle East. That is the way trade operates.

We have a deficit overall on our trade in merchandise, but we have a large surplus on our trade in invisibles, both in dividend income and in financial services, as we have in many of the professional services too. One has to consider the picture as a whole. If one is looking at our relations with Europe, what matters is the enormous amount of trade we do with Europe. If we were not able to export about 60 per cent. of our total exports to Europe, where on earth would we export those goods and services? The truth of the matter is that if one goes back to the 1960s and 1970s our trade with the Commonwealth was fading away. Barriers were being put up in the Commonwealth countries to trade with the United Kingdom; and we were almost forced to go to the European Community to make good that enormous gap in our trade. That is one point. One has to look at it as an overall issue, not as a simple Europe versus Britain issue.

Lord Pearson of Rannoch

My Lords, will the noble Lord give way? As there seems to be considerable disagreement on the exact percentage that we export to Europe, can he inform the House where he gets his figure of over 60 per cent? It might be helpful.

Lord Cockfield

My Lords, it is a matter that the noble Lord may wish to pursue elsewhere. The figure of approximately 60 per cent. has been quoted on many an occasion. During my day the figure was 50 per cent. I could substantiate that figure. However, if the noble Lord has some alternative figure to offer, I shall be interested to hear what it is. I do not think that the noble Lord will disagree with the general proposition that the proportion is very substantial. It will be interesting to know how he would replace that if we lost our complete duty free, quota free access to the European Union.

Lord Stoddart of Swindon

My Lords, perhaps I may—

Lord Cockfield

My Lords, I now take another point. I know that I am provoking the noble Lord, Lord Stoddart of Swindon. However, I propose to provoke him further. Perhaps he will allow me another minute to put the facts straight before he wishes to intervene.

Lord Stoddart of Swindon

My Lords, perhaps I may—

Noble Lords


Lord Cockfield

My Lords, I have already indicated that I am perfectly prepared to give way to the noble Lord, but I wish to give him a second point to deal with before he tries to deal with the first.

I hope that I have down correctly the words of the noble Lord, Lord Stoddart of Swindon, and of the noble Lord, Lord Bruce of Donington. The noble Lord, Lord Bruce of Donington, criticised the power of the European Court to overrule laws passed by the Parliament here in Westminster. That is the substance of what he said. The noble Lord, Lord Stoddart of Swindon, criticised the right of the European Court to overturn an Act of Parliament. I do not think that the noble Lord will contest that summary of his views.

In fact, the overruling of Acts of Parliament rests entirely upon the European Communities Act 1972. That was a statute passed by the other place; it was passed by your Lordships' House, and it was enacted. If anybody deserves to be criticised, it is not the European Court of Justice, it is the Members of another place; it is Members of your Lordships' House. If the noble Lord, Lord Stoddart of Swindon, can find a friend of his to promote a Bill to repeal the European Communities Act 1972, I wish him good luck but I would not put very much money on it.

Lord Bruce of Donington

My Lords, perhaps I may—

Lord Stoddart of Swindon

My Lords, the noble Lord, Lord Cockfield, indicated that he was going to give way to me in order to deal with those two specific points. Perhaps I may do so. I am most obliged to him for giving way.

I wished only to help him on the question of the trade percentage figures and to tell him that, according to the CSO figures, exports of visibles and invisibles to the European Union in 1994 were £114 billion and to the rest of the world £143 billion. So the total going to the European Union is 44 per cent., not 60 per cent.

On the second point, I understand perfectly well what the noble Lord said on the European Court of Justice and parliamentary sovereignty. I accept it and have criticised Parliament for giving away those powers. It may well be that one day we shall take up the noble Lord's invitation to promote a Bill to repeal Section 2 of the European Communities Act 1972 and I hope that the noble Lord will join us in doing so.

Lord Cockfield

My Lords, I am grateful to the noble Lord for his assistance. However, if he thinks for one moment that I shall join him in an effort to repeal the European Communities Act 1972, he must suffer from eternal but unjustified optimism.

Lord Bruce of Donington

My Lords, in the course of the noble Lord's remarks which he normally gives with some authority he said that I commented on the position of the European Court. I should be only too willing to do so at a convenient time, but this afternoon I never referred to the European Court at all. In the interests of his own reputation for accuracy, I advise him to agree that that is the case.

Lord Cockfield

My Lords, I am sorry, I apparently misunderstood the noble Lord. The remarks came from the noble Viscount, Lord Tonypandy. I apologise to the noble Lord, Lord Bruce, for having attributed to him views which he no doubt holds.

Perhaps I may pass from that to the matter which I have been trying to reach: the White Paper which is the subject of the debate. It is difficult to know what to say about it. The first three pages offer an extremely useful and well balanced introduction to the subject. Page 2 is a complete blank. Whether that is a summary of the matters on which the Cabinet themselves are mutually agreed, I do not know.

If we leave page 3 and continue, the document goes steadily downhill. Its analysis of the situation is good: the trouble lies in the conclusions which it draws. I agree entirely with my noble and learned friend Lord Howe of Aberavon that we are concerned with a process of negotiation. We are not concerned with the United Kingdom or any other government laying down the law and telling other people what they must agree to. There is far too much of that tenor in the document, where we say what the position ought to be and we expect the others to fall in line.

The essence of a negotiation is that at the end you do not get everything you set out to get. You have to give away some of the points which you would like to win in return for getting other people's support on what you regard as more important points. You have to judge the results of any conference of that kind in the same way as we had to judge the results of the Single European Act. Although subsequently we criticised many individual provisions, nevertheless our agreement to the single Act was entirely correct. It gave us the enormous advantage of being able to complete the single market. We felt that that advantage outweighed the concessions that we had to make elsewhere. That must eventually be the situation here: we shall need to balance whatever concessions we make against the advantages that we secure. That is a difficult task and it is important that the Government face it with a degree of flexibility.

Finally, the Government plainly expect the Intergovernmental Conference to continue for a year or 18 months. That comes out clearly if we look at the chart on page 7 of the document. The conference may go on for 12 or 18 months and the process of ratification will possibly go on until the year 1999. On that basis it is inevitable that there will be a general election before finally the terms of the Intergovernmental Conference are not only agreed but enshrined in legislation in all member states.

I am quite confident that in the end there will be majority support in this country on behalf of the European Union and in favour of our striking an agreement with it which, while it may involve concessions on some points, will nevertheless be for the advantage of this country, looking at the matter as a whole, in the same way as membership of the European Union has been of enormous advantage to the country, despite the occasional difficulties and disadvantages to which it gives rise.

6.15 p.m.

Lord Taverne

My Lords, I find myself in such close agreement with the remarks made by the noble and learned Lord, Lord Howe, and the noble Lord, Lord Cockfield, that I almost wondered whether it was worth contributing to the debate. However, perhaps I may put some points in sympathy with what they said but in a different way.

I find it hard to be optimistic about the Intergovernmental Conference. It could be useful in paving the way for the enlargement and the more effective workings of the European institutions which most of us wish to see. But I fear that the biggest obstacle to the success of the conference is likely to be the Government's apparent refusal, unwisely made explicit in the White Paper, to countenance any extension of qualified majority voting when all or virtually all our partners regard it as an essential precondition for enlargement.

It is true that recently in a rather encouraging way there has been some modification of that rather inflexible stand; but there are still clearly strong objections in principle to qualified majority voting or any substantial concessions. There is still a spirit of what the noble and learned Lord, Lord Howe, described as "defensive absolutism".

As the basis for the Government's opposition to more qualified majority voting is the fear of the loss of sovereignty, it is the issue of the sovereignty that I wish to speak about. "Sovereignty" is an emotive term. As your Lordships' House, or a report of its Select Committee on Economic and Monetary Union and Political Union, pointed out in 1990 in an excellent analysis, there are three different meanings to the word "sovereignty" which are often confused in debate. The meaning on which I wish to concentrate is the practical and political one.

What does "sovereignty" really mean when it is stripped of its rhetorical overtones? It means control over our own affairs. Common sense tells us that in the modern world no nation has absolute sovereignty. That is widely accepted. Every time we sign a treaty, we accept limitations on our freedom to act in return for reciprocal limitations on the freedom of others to act for our mutual benefit. By joining NATO—the most outstanding example—we gave up our unilateral right to declare war in Europe or to stay out of war in Europe because that gave us the only effective security against the real threat that we faced.

Again, by signing the Single European Act we appeared to give up sovereignty. The Act greatly extended the scope of qualified majority voting. We accepted the possibility that we could be out-voted, that we should be restrained from doing what we wanted to do. We did so because it gave us a better chance to get what we wanted most of the time. In fact, we have very rarely been out-voted on issues connected to the single market. We have greatly gained from the single market programme, as most of those who have spoken in this debate recognise, despite the writings of that distinguished ex-Chancellor, Mr. Norman Lamont, whose record will speak for itself.

But if we now blindly pursue notional sovereignty, we can lose real sovereignty, because we can lose control over our own affairs; and we shall also frustrate our key strategic objectives.

First, one of the main issues of the Intergovernmental Conference is likely to be the French and German demand to which several speakers referred that a core group of countries which wish to move further towards integration should be allowed to do so within the framework of Community institutions and within the whole framework of the Community. They aim thereby to circumvent the veto of those who are not members of the core group. The result would be a split in the Union for the first time, with two groups operating under different rules.

That would be a direct consequence of the Government's inflexibility. We cannot have it both ways. Clearly we cannot insist on retaining a veto on decisions in which we are involved, and also claim a veto on decisions in which we refuse to be involved. If we are inflexible, others will find a way without us. That will mean not only a fundamental split in the Union, but that decisions will be taken by others that will still have important consequences for our fortunes but over which we have no control. It could be one of the most serious and disadvantageous outcomes of the Intergovernmental Conference.

Secondly, we frustrate our own strategic objectives. As several speakers mentioned, enlargement is unlikely to be achieved, within a reasonable time at any rate, if there is no wider scope for qualified majority voting. If 27 or more nations each pursue their national objectives, each with a veto, it is most likely that the decision-making machinery of the European Union will seize up.

Thirdly, the re-weighting of votes which we rightly seek in the Intergovernmental Conference will not be accepted by the smaller nations unless there is an extension of qualified majority voting. Many of them have made that quite clear. They feel that their minority rights are much better protected within the first pillar within the Community framework as it exists.

The argument advanced by the Government and repeated this afternoon by the noble Baroness, Lady Chalker, is that unanimity has not prevented the achievement of major changes. Certainly, on constitutional issues that may be so. At least, it may be so to date; it may be true thus far. But even that may no longer be true in a larger Community which is no longer a compact group of like-minded states. There are certainly a number of issues on which we shall not be alone in arguing for unanimity—where national parliaments, for example, have the right to ratify what has been decided and in sensitive areas of foreign policy and defence.

However, there are other fields in which unanimity has not worked at all well. We have made no progress in the third pillar, where unanimity applies and where issues are at stake that are of great concern to the ordinary citizen. I refer to the justice and home affairs pillar. A very complicated series of issues arise and some are very sensitive. But we have a very strong interest in seeing that pillar more effective; in seeing that British nationals are not held in foreign gaols for long periods without trial; in a more effective fight against terrorism and crime more generally; and in seeing more effective actions on extradition. That, too, is a field in which we should approach the negotiations flexibly and not dogmatically.

Certainly, the requirement of unanimity has in the past proved a major obstacle to effective legislation. A distinction should be drawn between legislation and constitutional issues. One has only to look at the stagnation of legislation in Europe before the Cockfield White Paper which introduced the internal market programme. That extended qualified majority voting. Countries adopt a very different approach where qualified majority voting applies.

There is still a search for consensus, which should not be confused with unanimity. Under the qualified majority voting procedure, actual voting occurs only in a minority of cases. Mostly, votes are avoided because countries in a minority look for compromise. They have to compromise if they can be out-voted. They have to build alliances.

Indeed, building alliances is the key to getting what you want in the Union, as elsewhere, as several speakers mentioned. It requires a spirit of give and take. The need for alliances could not have been better illustrated than in the present beef crisis. We have failed to build alliances and we have become isolated. If the Prime Minister boasts at party conferences about being the "no man" of Europe, it is not surprising that he does not have many friends in Europe when he needs them.

We have become isolated because the Government have failed to confront the nationalists in their own party, who suffer from a confusion about the difference between real and notional sovereignty and have no idea how the strategic interests of Britain can best be pursued.

There have been some recent signs of flexibility, and perhaps it is not too late for a return to pragmatism and common sense. Waving a banner saying, "No more majority voting", will get us nowhere. In fact, it will mean a loss of control over our own affairs and will thwart our true national interests.

6.26 p.m.

Lord Kingsland

My Lords, I begin by offering congratulations to my noble friends Lady Wilcox and Lord Bowness on their excellent maiden speeches. I wish them well in this House.

I was very struck by the opening remarks of the noble Lord, Lord Richard, on the speech of my noble friend Lady Chalker. He accused her of drift. If there was any hint of drift before the noble Baroness stood up, there was surely none left by the time she sat down.

In any case, drift has a very distinguished history in British foreign policy. I believe it was the great ancestor of my noble friend the Lord Privy Seal, the Marquess of Salisbury, who described the essence of British foreign policy as, drifting gently down stream, occasionally fending off with a boathook to avoid a collision". It was a policy that served this country well for many centuries. Even nowadays it can on occasions be of great benefit. I therefore ask the noble Lord, Lord Richard, to think again about the role that drift ought to play in the Government's policy.

I was also very struck by the noble Lord's remarks on qualified majority voting. Qualified majority voting about what? We cannot have a sensible discussion about increasing qualified majority voting in the European Community unless we are prepared to be specific. Much has been said about the subject in this House, but very little of a specific nature.

I take the remarks of my noble friend Lady Chalker about qualified majority voting to relate in particular to two areas: first, foreign policy and, secondly, taxation. I should be totally opposed to the introduction of qualified majority voting in either of those areas. I suspect that in saying so I have the support of all Members on my side of the House, and indeed many on the other side. There may be other areas in the economic field where, in the course of negotiations, some concessions may be made. But until we know what they are, we cannot be specific. This subject ought either to be talked about in terms or not at all.

In my view there are two fundamental matters which bear on the Intergovernmental Conference. The first concerns security and the second relates to the rule of law. Recently, in the course of the debate initiated by the noble Lord, Lord Wallace of Saltaire, I had the opportunity to speak in some detail on both those issues. Therefore, I shall content myself with re-emphasising their importance in this negotiation. In particular, as the noble Lord, Lord Chalfont, said, it is vital that the Atlantic Alliance is viewed by all our European partners as an essential part of the development of European security. Indeed, I believe that our future partners in the European Community—the countries of central and eastern Europe—would wish it thus.

I endorse a great deal of what the noble Lord, Lord Lester of Herne Hill, said about the crucial importance of sustaining and advancing the strength of the European Court of Justice. I should be very interested to hear my noble friend's reaction to his speech in her summing up. It seems to me that the White Paper points in both directions. On the one hand, it endorses the principle of the Court's role and power and, on the other hand, it seems in certain important points of detail to resile from that point of principle. Some clarification in that area would be enormously appreciated.

I now address myself to one or two paragraphs of the White Paper itself. I draw the House's attention first to paragraph 6, which is entitled "The British Approach". It speaks first of the Union developing as nation states co-operating together and goes on to say—which I greatly welcome—toward the end: Common European decision-making, as opposed to cooperation, can only be justified where it brings benefits for British security, prosperity and quality of life". I regard that statement as significant. In the recent debate in this country about the European Community, we have tended to talk about the Community as a community of co-operating states. The European Community is much more than that. In its judicial and legislative activities the European Community is largely a supranational community. Indeed, it is a federal community. The powers of the European Court of Justice are federal and the powers of the Council of Ministers, where there is majority voting, are federal. It is time that we owned up about that to the citizens of the United Kingdom and spoke about it in real terms: explaining that it means that we have given up a certain amount of power to exercise authority over our own territory in return for the fact that 14 other states have given up a similar amount of power to exercise similar authority over their own territory; and that we regard that as being a good bargain for Britain. It is only by giving the citizens of our country the opportunity to understand the commitments that we have already made in our membership of the European Community that we can have a sensible debate about the commitments, if any, that we are going to make in the upcoming conference.

One of the reasons why the Maastricht debate in this country went so wrong was that we were not prepared to make those admissions to our country. So I ask the noble Baroness—she may take great exception to this—to urge her colleagues on the Front Bench in another place to start off absolutely clear and accurate about where we are now. Until we do that, we shall not have any sense of direction.

My second point of detail on the White Paper refers to paragraph 8, to which our attention has already been drawn by a number of other speakers. It says: The Union needs to accept a degree of flexibility or, as it is sometimes described, 'variable geometry', without falling into the trap of a two-tier Europe with a hard core either of countries or of policies". I suggest to my noble friend that that will prove an extremely difficult tightrope to walk. We must not behave like a dog in a manger. We must not not want things for ourselves but also not want them for other members of the Community as well. In other words, our main objective in these negotiations must not be to prevent things from happening.

To take perhaps the most talked about policy, which will in fact not be dealt with at all in the conference—economic and monetary union—it seems to me that it is perfectly all right for Britain not to want economic and monetary union. It is perfectly all right for us to stand back from it; but in my submission it is not all right to do everything in our power to prevent the other states from having it themselves. I hope that that will be the spirit in which we enter into the negotiation. There may be things for which we shall seek opt-outs but we must not try to impede the progress of the whole experiment. After all, Franco-German union was the great aspiration of Sir Winston Churchill. Indeed, in his speech in 1946 he talked about a kind of United States of Europe. He was not referring to Britain as being part of that. His aspiration was for Franco-German unity. Nevertheless, we should recognise that those countries have aspirations and it would be counter-productive to try to stand in their way, even if we do not want it for ourselves.

My third point refers to a matter which is not touched on in the White Paper; namely, the responsibility of the European Commission to the European Parliament. The European Commission, as we are often reminded, is an unelected body. Under the treaties, it has no responsibilities whatsoever to national parliaments, rightly or wrongly, but it does have a responsibility to the European Parliament. That responsibility is expressed by the power of the European Parliament to censure the European Commission. But the act of censure applies only to the total European Commission. It does not apply to individual European Commissioners.

There is an initiative that the United Kingdom Government could take without in any way undermining the powers of this or any other national parliament. It would not in any way take away powers from ourselves by giving the European Parliament the right to censure individual European Commissioners. We may have largely abandoned the doctrine of individual ministerial responsibility in this country, but there is no reason to believe that it will not work extremely well in the European Community.

I was greatly struck by the endorsement given in the White Paper to the Court of Human Rights. The Court of Human Rights refers largely to civil matters and in the context of the Intergovernmental Conference I should like the Government to take an initiative, together with our European partners, to promote the idea of an international criminal court of justice. We all know that on the territory of Europe there have been the most terrible acts of genocide; and many of the perpetrators are likely not to be apprehended. There is not a great deal that we can do about the past. But there is much that we can do for the future by establishing an international court of criminal justice which has a system of implementation that will ensure that future leaders of nations with evil intent will not get away with their crimes. We ourselves, together with the United States and the other allies at Nuremberg, instituted such a court. Alas, despite the attempts of many jurists, it did not become permanent. The events of Yugoslavia and Rwanda now make the case for establishing an international court of criminal justice clear beyond doubt. I should like our Government to put that issue on the agenda at the European Summit and seek the support of other European countries. In that way we can present in the United Nations a united position when the matter comes to be discussed, as it will later this year.

I congratulate my noble friend Lady Chalker not only on an excellent speech but also on producing for us a White Paper which has much to commend it and which will form a good basis for our negotiations in the forthcoming conference.

6.40 p.m.

Lord Elis-Thomas

My Lords, I have some difficulty in taking part in many of our European debates in this House because it occurs to me, listening to many Members of your Lordships' House, that I seem to live on a different continent and perhaps even in a different country. When I hear my noble friend Lord Tonypandy, with whom I am privileged to share this Bench, espousing what I call the case of British state nationalism with all the strength of the Welsh pulpit oratory—though listening to him is always an edification—I am not sure whether we both live in the same country.

I was a little helped this evening by various noble Lords who spoke. The noble Baroness, Lady Wilcox, in an engaging maiden speech, made reference to the importance of the fishing industry and brought back happy evocations of the Breton fishing industry. I am reminded that, although there are people in this House who try desperately to defend the existing structure of nation states, regions have always traded with each other and will continue to do so. The nearest European capital from my home in Caernarfon is Dublin, now barely two hours away. We think of ourselves along the Atlantic are of maritime Europe as an integrated region, and the major capitals of Paris and London are indeed places from which we feel quite remote. That is the reality of geography and it is also the reality of politics.

We were clearly reminded by the noble Lord, Lord Bowness, again in an important intervention as a maiden speech, of the importance of the Council of the Regions within the structure of the European Union. He used a telling phrase when he referred to the different levels of government which have nothing to fear from each other, whether at the European level, the level of this House or, indeed, the level of local and regional government in England or anywhere else.

I still detect in many contributors to the European debates in this House a sense of fear; of conjuring up yet again a form of xenophobia. I noted in a number of instances the word "foreigner" being used in this debate. There is a tendency to conjure up images of foreigners and to refer to this House in London as though it were not part of Europe; to distinguish between the mainland of Europe, as I call it, and these offshore islands in a way which implies that, despite the Eurostar and the Channel Tunnel, we can somehow dissociate ourselves from what is going on.

It is in that sense that I welcome the contributions made to the debate most recently by the noble Lord, Lord Taverne, with his discourse on sovereignty. Clearly again so much of our European debate is based upon rather simplistic bipolarity. Whenever one gets into a bipolar argument—either/or—one ends up not only misusing language, but also misconstruing reality.

Many of our debates about Europe are about that kind of artificial distinction and difference. As we were reminded, the IGC is a process of negotiation. The noble and learned Lord, Lord Howe of Aberavon, and Lord Cockfield, explained that very clearly. I follow the noble and learned Lord, Lord Howe, in his analysis of the opening statements of the White Paper. I too am surprised that the British Prime Minister should refer to the democratic nation state as the "bedrock" of the European Union.

A democratic nation state is a recent European creation invented at best in the 19th century and in terms of the 20th century in relation to most of the members of the United Nations. By any construction it belongs no earlier than the development of the French Revolution. If one were to talk about the bedrock of the European Union, one would have to go back to the Anglo-Germanic culture, the Romanic culture, the Hellenic culture or even the Celtic culture. There are many bedrocks of European civilisation and the unity of that civilisation is not guaranteed by each nation state with its own history and traditions attracting the loyalty, affection and pride of its people. Rather it is that those peoples within Europe feel a sense of identity with various levels of government to the extent that those levels of government deliver for them what they believe is important in the conduct of their regular lives.

In that sense we should be turning our European debate not into a debate as between one centre of power and another, but seeing power in terms of relationships between different centres, between the levels of states which we already have, whether that is the local state in the municipality and the region—again, as the noble Lord, Lord Bowness, reminded us, that is more developed in other parts of Europe than in the UK—or the so-called nation state. By any sensible scrutiny, it is not a nation state at all. I do not know whether there are any Members of this House who can name one nation state which is a state comprising one single nationality.

The nation states of Europe, barring perhaps Iceland—I suppose that these days Iceland, with its small multi-ethnic population may be regarded as a multi-national state—in terms of structure are all multi-national states. The UK is a multi-national state, as is the Belgian state, the French state, the German state and so forth; they are all multi-national states, multi-ethnic states, international states in terms of their construction and development. Therefore to talk of a nation state is anachronistic. I am surprised that we still hear that kind of discourse.

I understand the argument. It concerns an unwillingness to see government in terms of levels and in particular to see the relationship between different levels as a creative conflict—to coin a phrase—rather than as something which is a threat. We have heard from the nationalist tendency, as I would prefer to describe the Euro sceptic tendency in this House and another place. But it is important also that the post-nationalist tendency should he heard clearly.

The kind of developments for which we look in the IGC are developments in the process of constructing ever closer union among the peoples of Europe rather than among the states. The wording of the treaty refers to, ever closer union among the peoples". That can take various forms. It can take the form of providing ways in which the structure of the presidency of the Commission can be reformed. I am glad to see support for joint state presidency in the White Paper. It can take the form of ensuring that the European Parliament relates more closely to the work of the Commission and particularly to the work of the member state parliaments. Indeed, the activities in which we are involved in our various Select Committees in this House are a model. I can only speak for the European Communities Committee on Public Health and the Environment which, in its own way, has been pioneering close links with the European Parliament Environment Committee and trying to ensure that the work we do in this House is studied more closely in the rest of Europe. I know for a fact, from discussions that we have had with a number of members of the European Parliament and the Commission, that the work undertaken by the Select Committees of this House is admired throughout the European Union. That is a good example of the way in which the United Kingdom can innovate and we should pursue that in the context of the debate within the IGC process.

However, we need to look not only in terms of the development of structures, but at ways in which those structures can influence policy more effectively. If I have one major criticism of this White Paper it is the obsession with a particularly UK definition of subsidiarity: that the EC shall do nothing if the UK can prevent it. That is the UK Government's definition of subsidiarity. That definition has clouded any discussion about joint action. For example, the White Paper comes out firmly against any fiscal measures that would be related to the environmental proposals of the European Union because that is seen as back-door centralisation.

Similarly, the White Paper opposes the development of a common tourism policy. For the life of me I cannot imagine anything more harmless than a common tourism policy. As a tourist and a person regularly involved in studying tourism, the essence of tourism is the mobility of persons across borders. It has a substantial environmental and cultural impact. It enables people to learn in an informal atmosphere about the nature of other people's cultures. Therefore, it makes all the sense in the world for the European Union to have limited competence in the field of tourism. Yet the Government solemnly announce in the White Paper that they are opposed to any development on those lines, presumably because they believe that such development would be a threat to their view on subsidiarity.

Similarly, and more seriously, in the White Paper the Government persist in refusing to endorse a common position against racism in the European Union. This is a very strong and emotive issue for the citizens of the European Union who are from ethnic minorities. The UK Government should reassess their attitude because they are doing a great disservice to themselves. As I mentioned in an earlier debate on this issue—and I am disappointed that the Government have not yet moved on it—the United Kingdom has an admirable record in the field of race relations legislation. They should be seeking to introduce similar legislation and competences within a limited area in the rest of the European Union. It is a matter of great regret to me that the only positive sharing of legislative competence proposed in this White Paper is in the field of animal welfare. I support that, but I want to see the Government take as equally positive an attitude towards human beings in the rest of the European Union as they do towards the welfare of animals.

This is a disappointing document and one which fails to recognise the importance of appearing to have a positive attitude towards the rest of Europe. The sooner the United Kingdom realises that it is irrevocably tied up with the rest of Europe, and always has been, the sooner the debates in this House will become a positive contribution rather than negative carping.

6.53 p.m.

Lord Beloff

My Lords, the White Paper we are assembled to discuss is in many respects an admirable document. It sets out a vision of Europe with which many of us would find it easy to agree. It has only one weakness: the vision that it sets out is not likely to be attained, at any rate within the compass of the next few years and the IGC. Paragraph 12 of the White Paper says that it is important for us not to press issues of particular concern to this country because that might make other countries press issues on which they are particularly keen. But that suggests that what we are entering into is a negotiation between parties who have a common objective but who may differ on the details. One might think of the amalgamation of two commercial concerns. One side might say that it would like to see some of the branches closed or transferred and the other side might say that it would not wish to continue the present arrangements for bonuses for management, or whatever it might be. It is a bargain and they are common in international affairs and in other spheres of life.

But what we are facing here is not a bargain or a series of bargains. We are facing a profound difference of objective and sentiment which divides this country from many of its current European neighbours. I believe that that was illustrated by the noble Lord, Lord Bridges, who said that we seem to lack the European vision. We do. We do not have the feelings which the war in particular engendered in France, Germany and the Low Countries as a result of the calamities which befell them and which, particularly in the case of Germany, meant that they felt that their destiny could now only be fulfilled within some wider supranational organisation. Therefore, one comes to the point which the noble Lord, Lord Richard, made as to why this difference exists.

If I had been tempted to follow the noble Baroness, Lady Wilcox, in her marvellous speech and go into personal reminiscence, I should have remembered the winter of 1940ߝ41 when, with a Lee Enfield rifle and little ammunition, I stood between a possible invasion from the north of the country of the noble Lord, Lord Elis-Thomas—a piece of deterrence which, in that case, proved totally successful. But I believe that no one in that winter would have asked, "What differentiates Britain from the rest of Europe?". We knew what differentiated Britain. The rest of Europe was divided between two tyrants and we, fortunately, thanks to the gallantry and wisdom of our war leaders, avoided that fate.

But one might say that was a temporary phenomenon. If I had to answer the noble Lord, Lord Richard, more seriously—his position as Leader of the Opposition party in this House demands that I answer him seriously—I should use the words of a former leader of his party, Hugh Gaitskell, and say, "It is a thousand years of history". What has been that history? It has been the history of an island. I am sorry that the noble Lord, Lord Elis-Thomas, believes that nation states are so new. The literature of England in the Middle Ages is sufficient to mark that it was a nation state. There were other nation states in Europe just as there were powerful city states before they were swallowed up in greater units.

We had a different and an oceanic vision from at least the 15th century. The noble Lord, Lord Richard, seemed to think that it was somewhat disparaging of General de Gaulle to say that Britain would always choose the open sea. It only proves what a great statesman General de Gaulle was and the power of his vision, because he took into account, not only in relation to his own country but in relation to others, what had been their experience, their history, and what was likely to be their future.

During the centuries that have elapsed, on many occasions the course of British policy and the feelings, if you like, of the British people, were affected by the building up in central and western Europe of combinations of power which seemed to threaten British independence or British institutions. On the whole we resisted. There were occasions when attempts were made to buy off the putative enemy, as in the secret Treaty of Dover of 1670.

However, I shall not take your Lordships through a catalogue of European wars, alliances and oceanic events. Let us come to what is the most similar and the most parallel experience to that which we now confront. I refer to Napoleon's continental system. Through the superior military power and manpower of France—at that time the dominant country in Europe—Europe was organised to benefit the businesses, manufacturers and agriculture of its continental countries and to eliminate British trade. The continental system was a valid expression of a moment in European commercial history and in European political history. It is one on which we should occasionally reflect, if only because it gave rise, at the moment when Britain's ability to resist the Napoleonic pressure was most evident, to William Pitt's famous phrase: England has saved herself by her exertions, and will … save Europe by her example". The fact that at least one country remained outside that commercial combination ensured in the end that that combination collapsed.

We all know the course of events in Europe which made successive countries, such as Spain and eventually Germany and Italy, rise up and profess that they were not Frenchmen, did not intend to become Frenchmen and wished to have sovereignty. The noble Lord, Lord Taverne, has a curious and warped notion of sovereignty. "Sovereignty" means something much simpler in legal terms. It means the right of a country's citizens to create their own institutions and to be governed by those institutions. It is neither more nor less than that. It was that feeling in the rest of Europe that brought the Napoleonic continental system to an end.

Therefore, when I look at the current situation in Europe, it is not with the intention of being dog-in-the-mangerish, as the noble Lord, Lord Kingsland, suggested, and of trying to prevent what we might now call the "core countries" from establishing their union. I think that they will go ahead. I see no reason to believe that we could stop them even if we wished to do so. I imagine that within the next three or four years—perhaps five years at the most—there will be a continental bloc, which will consist initially, as we know, of Germany, France, the Low Countries and perhaps one or two others. They will have a single currency and virtually a single legislature, together with all the appurtenances of a state—a federal state, if you like, rather than a unitary state, but a state nevertheless.

I am not saying this in order to be a great prophet because I am simply following what has been said repeatedly and recently by Chancellor Kohl and those who speak for him and with him. It started as the Coal and Steel Community; it is now the Coal and Kohl Community. What matters is that Germany is in a position to bring about its dream.

My view is that the price of taking part in that is already worrying other European countries. I do not know what would happen if there were a referendum in France today, but it is difficult to believe that any European country which sees unemployment rising and social tensions mounting because of the imposition of the monetary demands that are necessary to make the European Union work will tolerate such sacrifices for long. However, I do not think that that is to be welcomed, because an upheaval in Europe which would bring that edifice crashing down would present many disadvantages to us, as neighbours still hoping to trade with those countries.

I am sorry that the noble Lord, Lord Cockfield, is not in his place, because I should have liked to ask him why he thinks that if we are not part of the inner core we shall suddenly cease to be able to trade with those countries that are. There is such a thing as the World Trade Organisation, the successor of GATT. It would be difficult, legally at any rate, to impose discrimination—although what we have seen in regard to beef shows that that might well be attempted.

We may be facing a very difficult period. I believe that talk about common goals, common sympathies and exchanges of ideas—all the things that inspire the noble Lord, Lord Elis-Thomas—is all on the surface. The really basic issue is what the individual peoples of Europe feel. Probably the majority of Germans want a federal Europe. The Belgians want that because their country would break up unless there was a federal Europe. The Italians would like to be part of that for the same reason, but they are unlikely to meet any of the criteria. All those factors are real. We have to follow them and consider them, but above all we have to remember that, as the noble Lord, Lord Chalfont, said, in the last resort the business of the British Government is the security of the British people. It is difficult to see how we could go along with any ideas of subordinating our foreign and defence policy to any form of voting system in Europe.

De Gaulle was right when he said that Britain would cling to the United States. So it does and so, in my view, it should. Therefore, although it is interesting to discuss the White Paper and the IGC, I regard them as of less importance than really trying to understand what is going on in Europe. There is no element of blame in this. Like this country, other countries are looking out for their own interests.

I turn briefly back to the question of a common foreign policy. One element which I should have thought might well unite Europe is a desire to put an end to the sustaining of terror across Europe and the Middle East by the Government of Iran. We and the United States have tried to do that, perhaps in our case stimulated by the fatwa against Salman Rushdie. However, the French and the Germans are quite happy to go on trading with Iran. They object strongly to any idea of isolating that regime. That is their calculation. That is their right. If we had a voting system, they would not stand to be outvoted on that.

Let us take things as they are and as history has told us they are. Let us try to do the best we can for our own country and commend Her Majesty's Government on their apparent determination to follow precisely that course.

7.9 p.m.

Lord Kennet

My Lords, it is becoming a regular pleasure for me to follow the noble Lord, Lord Beloff. We always seem to be put together in the middle of long debates on world affairs. I was planning to give myself the pleasure of praising him this time for what he said about why we are different from all the others in the European Union. In my submission, he got that absolutely right: we were not occupied or invaded during the war. However, when he claimed that there was a great parallel between the situation which faced us in the Napoleonic age and the situation which faces us now, I found myself once again in the more familiar position of not believing a word of it.

I turn from that to talk about the word "federation". There are many ideas of what it means. If we could agree on what the word meant there would still be many ideas about whether or not we ought to have a federation and, if so, what it ought to look like and what ought to be in it. Many Members of this House have great experience. However, the noble and learned Lord, Lord Howe, has the splendid gift of being able to express felicitously the essence of his experience. His words about how international arrangements grow up, as opposed to all the blueprints about them, were most striking.

"Federal" is a word which so terrifies one part of the political spectrum in this country that recently it earned, for a while, the glamorous and sordid status of an f-word. There was a lot of shallow argument about what it meant and to whom. To those not blinded by xenophobia, I believe that federalism can still mean what it always did—that is, favouring federation—and that can still mean what it always did—that is, an association of social entities bound together by a treaty (from the Latin foedus, no more than that), as in the Federation of Women's Institutes, and so on. There are 42 federations in the London telephone book, going from the Federation of Artistic and Creative Therapy to the Federation of Zoological Gardens of Great Britain and Ireland. Confederation means a weaker form of it, as in the Swiss Confederation and the Confederation of Southern States in the American Civil War, except that the underlying foedus is weaker and makes fewer claims. We in Europe can take our place on that scale but we can do so consciously only if we use words in a meaningful manner.

What matters even more than the correct use of words is the rate of progress. To elaborate, the European Union (formerly the Community) came into existence not primarily to create a common coal and steel industry, then a common market, then the harmonisation of regulation in countless fields, then monetary union, then a single currency and then a common foreign and security policy. All of those matters were conceived as the means by which a far greater and more demanding end, even a numinous one, could be achieved: the end of 2000 years of war among the peoples of Europe.

Lord Beloff

My Lords, I omitted the fact that the most notable example of federation was the United States of America. That federation did not prevent the bloodiest war of the 19th century. I ask my noble friend why a federal system in Europe should do any better.

Lord Kennet

My Lords, one may take that view that that federation was itself established by a bloody war between the smaller federation of the North and the confederation of the South. We will come to that.

Such a majestic ambition—to put an end to war in Europe, the will to wrench history aside into peace after war, into calm after hatred and into reason after black horror—will succeed only at the pace of the slowest unit. The slowest will be a nation whose experience and circumstances most differ from those of the others. Our country is the only island in the Union except Ireland, which by its position as the little island beyond the big one will normally go the opposite way from us. Subject to that, we are the only island and, except for Ireland and Sweden, the only state to have escaped armed occupation by nazism or fascism. I believe it is only natural that we should be rather behindhand in understanding the settled determination of the others to come together once and for all and put an end to a nightmare past which we islanders can only imagine. We should not be for ever trying to trip up the others and claw this or that back from the others. We should be grateful to the others for being patient with us, and we should be far more sensitive to the structures of memory and commitment which underlie their impulses. We should even dare to exercise intuition, put ourselves in their shoes, and begin to move with the geopolitical current in our part of the world, whose interests we share in every field and in every way.

I am among those who believe that in time there will be a European confederation, and perhaps later a federation. There is no reason for anyone to worry about it. It will happen only when the very last country wants it to happen, which, after all, may not be us. It cannot happen before.

Two practical matters arise in the IGC which may go wrong but are less likely to go wrong if the British Government take the long view; that is, the neighbourly and historical view. The first is the single currency and the institutional ways of looking at it. Pessimistic xenophobia looks at the strong national currencies involved, traditionally the German, and thinks what havoc their owners could wreak on our weaker currency if they wanted to. Well, for one thing it so happens that, not being xenophobic, they do not want to do that. For another, they could not if they did; that is what a single currency is about. For yet another thing, it is seldom noticed that our weaker currency will benefit from the strength of those that are stronger—Germany now and whoever it may be in the future.

We cannot expect the offer to carry us to remain open for ever. We should accept it now and look forward to the day when our national economy is strong enough to undertake part of the duty of helping the weaker economies in the Union. After all, the principle is very familiar to us and all other states in their domestic affairs: rich regions help poor regions.

The other notion in the Government's White Paper which does not seem quite right is related to the single figure who is to do something about developing and presenting the common foreign and security policy. The Government have agreed with the bold proposal that such a person should exist, but want him or her to be not in the Commission but in the secretariat of the Council of Ministers. The Labour Party has so far endorsed that location. Nevertheless, I believe that it is a mistake for two reasons. First, it would be one large step further in the tendency for the secretariat of the Council of Ministers to develop into a second European Union civil service, reduplicating and competing with the original European civil service; that is, the European Commission itself. It would also isolate the new official from Union policy-making in all other fields, which are and must remain in the Commission, so that the common foreign and security policy would be devised at an unnecessary distance from, say, trade and industry policy, environment policy, fisheries policy and all the rest. That way lie confusion and inertia.

The other reason to think it a mistake is that making that all-important new person the servant of the body which has to handle the often divergent positions of numerous sovereign states will condemn him or her to cautious reaction—indeed, he will probably be chosen for his well-proven caution in the first place. If on the other hand he were to be part of the Commission, he would be free to present original syntheses and new policy proposals. Everything would always be subject to approval by the Council, just as all initiatives from the Commission are subject to the approval of the Council.

Now, to stand back: we, Britain, can never again be independent. No country can. The world is being materially unified by technology, and we know that we can no longer fend for ourselves one by one. But we must and do make regional as well as global arrangements. Two such regional arrangements appear to be open to us: the transatlantic and the European. Up to now we have been straddling and mugwumping. But we cannot for ever have them both.

It has long been clear to most of the countries in Western Europe that their own company is the company they desire, and it is time for it to be clear to us too. We should be strengthened in this understanding by the increasingly obvious fact that to the United States we are nowadays important only as part of Europe.

Why do I make such a point of this, and assert so often that the time has come for us to choose? Consider these things: it is not through any European country that our intelligence services have lost a very large part of their entire skills and knowledge to Russia, and it is not any European country which has refused even to let us know how much we have lost. All this our new Intelligence Oversight Committee forcefully pointed out in its first report. It is not any European country which threatens to prosecute our traders next time they step on its soil if they also trade with Cuba. It is not any European country which has made Israel a nuclear super-power in the Middle East and has funded it over the decades so that it can now once more destroy the Lebanon, slaughter its civilian population and drive 400,000 people from their homes. Nor has any European participant in the UN force in Bosnia arranged Iranian and Turkish arms and military training for the Moslem government there and is now setting up a network of military bases in Central and Eastern Europe without the agreement of NATO.

No, on grounds of justice and interest alike, our future must lie in and with the Europe of which we are geographically and historically a part. Neither individuals nor nations can achieve coherent thought and action if they cannot recognise their own identity.

7.26 p.m.

Lord Skidelsky

My Lords, the Government's White Paper A Partnership of Nations rightly sets the IGC in the context of enlargement: 13 states, including nine former communist countries, have applied, or are about to apply, for membership of the EU. I take the central message of the White Paper to be very simple—that is, that specific arrangements which suited a small group of similar and contiguous countries in 1957, and which never suited us that well when we joined in 1972, cannot be applied wholesale to a continent-wide group of 27 countries. I would emphasise the sheer number of new applicants as a crucially different factor in the situation. That makes for a contradiction between widening and deepening.

Variable geometry is merely the White Paper's language for dealing with, and trying to overcome, that contradiction. The noble Lord, Lord Ezra, said that he did not understand what it meant, and that, in any case, his party was opposed to it. I believe that he is a bit behind the EU itself in this matter. At the Turin Council of 29th March the heads of government asked the IGC to examine: whether or how to introduce rules … in order to enable a certain number of Member States to develop a strengthened co-operation". That is variable geometry.

My noble and learned friend Lord Howe of Aberavon, my noble friend Lord Cockfield, and the noble Lord, Lord Taverne, reject the concept. Yet variable geometry is surely just a recognition of the fact that not all interests will be common in a Community of 27 countries, and that realistic variations are far preferable to artificial uniformity. It is also profoundly misleading to think of a single core in such a grouping of 27 nations. There will be a number of cores, as there always have been in the historic continent of Europe. Britain will certainly be at the centre of one of them.

Let me turn to another implication of variable geometry. The Verona Conference of Finance Ministers started to face up to the fact that the EMU will be confined to a minority of EU members for the foreseeable future. The question of the relationship therefore between the single currency area and the non-single currency members becomes of great significance. It is useful to have the issue out in the open, as the attempt to make a monetary union of the whole Community has been the most enormous waste of intellectual and political energy—the greatest single waste of such energy for the past 10 years.

If it is accepted, as it now is, that some members of the Community will not be in the single currency area, one can start to think sensibly about the design of a new monetary system for the whole world—for a much larger area than the EU—perhaps a new Bretton Woods which aims for general stability of exchange rates, which everyone recognises to be for the general advantage.

It is no more desirable, after all, that the USA, Japan, or China should manipulate their exchange rates to gain competitive advantages against the single currency area than that Britain and Spain should do so. Of course, the damage caused by those great trading nations doing so would be far more serious.

On enlargement, we need to distinguish between economic enlargement and security enlargement. The problems of enlarging the single market have been greatly exaggerated. Virtually all industrial imports from central and eastern European countries now enter the EU free of duty and quota restrictions. In textiles and clothing, duties will be abolished on 1st January 1997, and quotas liberalised a year later. Trade in agricultural commodities is much more difficult owing to the CAP. But preferential quotas for agricultural exports from the former communist countries (now associated members) are to be raised steadily over the next five years. I expect—noble Lords may think that I am being too optimistic—that the CAP will wither away gradually as the number of farmers in western European countries continues to decline.

That problem of enlargement is not particularly intractable. Much more intractable is the problem of security enlargement. Estonia, Latvia and Lithuania have applied for membership of the EU. Is the EU really proposing to defend those countries against Russia when they become members? I suspect that a great deal of variable geometry will be needed to deal with that particular conundrum; not only variable geometry within the EU but between the EU, the WEU and NATO, all of which have fingers in the European defence pie. I suggest that we should consider letting exposed countries into the European Community but not into the European Union, at least until a pan-European security system has been established.

One of the most valuable contributions of the White Paper is the reminder that the European Union is simply an umbrella term for the old EEC plus common foreign and security policy, plus justice and home affairs. We can regard those as three pillars of a yet unfinished building but there is no need to do so. In fact, when it comes to defence and foreign policy, it is very important to be clear about which part of the Union is being expanded at any particular time if we are not to land ourselves with dangerous and unsustainable commitments.

Thinking about Europe draws one all too readily into philosophical speculation. The noble Lord, Lord Richard, who is not in his seat, failed to see any difference between Britain's interests and those of our continental partners. I doubt whether he would be so blind if he were in government. The truth is that we in this country accept the idea of a single market but we are most unhappy about the idea of political union, which the leading continental powers are determined should underpin it. That goes against our traditions and economic interests.

However, there are two arguments on the other side which Euro-sceptics should take seriously. First, history shows that free trade plus the balance of power is not enough to secure European peace. We had a single market—Russia was part of it—before 1914 but that did not stop the First World War. Therefore, a permanent confederacy of the main European nations must be in our long-term interests, even more so as the United States disengages gradually from the affairs of our continent as it is bound to do.

Secondly, Euro-sceptics need to ask whether we would have achieved even the degree of free trade we have achieved in Europe had the European Community not existed. It is all very well for them to argue that a continental-wide free trade area in which all nations can compete according to their full comparative advantages is all that is needed, but does anyone believe that such an offer was ever realistically before us?

We have had to accept a large dose of dirigisme as the price of free trade. In the actual Europe in which we live there has been no alternative to that. However, would not my noble friend Lord Beloff agree that the European Union offers an arena in which differences of interest which are historical and will always continue can be threshed out through politics rather than through war? It seems to me that that is the main political innovation which the European Union represents.

Lord Pearson of Rannoch

My Lords, I hesitate to query such an expert historian as my noble friend Lord Skidelsky, but can he tell the House when a war was last started by a free democratic nation, such as are the nations of Europe today, and not by some rather more dictatorial regime?

Lord Skidelsky

My Lords, my noble friend will know that historians argue interminably about the causes of war and about who is responsible for starting any particular war. However, I would say that the international system before 1914, which was certainly liberal by the standards of that day, failed to stop the most destructive war in modern history. Although there may be some reason to suppose that we should do better today, the existence of the political invention, the European Union, makes that much more likely.

I wish to conclude by paying tribute to the Prime Minister, who has handled this difficult issue extremely well. The issue is difficult both politically and intellectually. He has not damaged our negotiating flexibility by threats or fulminations but has fought our corner with courtesy, moderation, reasonableness and tenacity. I believe that that spirit permeates the White Paper and it will have growing influence on the European debate. For that reason, I am happy to speak in its support.

7.36 p.m.

Lord McNally

My Lords, it is less than 12 weeks since I made my maiden speech. Therefore, your Lordships can imagine that I was green with envy when I heard the dazzling performance of the noble Baroness, Lady Wilcox. As she is not in her place, I can only put on record, and hope that she will write to me, the only matter that I did not follow completely. I understand how she knows that Harrods and Fortnum & Mason will be interested in her langoustines but how does she know that the Bunny Club will be a market for them? I hope that I do not too greatly damage the credentials of the noble Lord, Lord Bowness, by saying that his explanation of subsidiarity was most welcome on these Benches. I hope that he will spend some time trying to explain to those on his Front Bench exactly what subsidiarity means. He seems to grasp that but the Government do not.

As regards the White Paper, the noble Lord, Lord Beloff, started my thinking by reference to a speech of Hugh Gaitskell in which he referred to a thousand years of history. I suppose that that put Hugh Gaitskell among the early Euro-sceptics. Shortly afterwards, in 1966, George Brown and Harold Wilson would not take no for an answer as they went around Europe with Labour's application to join. In 1972 the Labour Party was saying no to Europe on Tory terms and in 1975 it let the people decide by a renegotiation and referendum. By 1983 it wanted withdrawal with no referendum and by 1987 there was reluctant agnosticism. Today it feels the Euro-enthusiasm exhibited by the noble Lord, Lord Richard.

I remind the noble Lord of that only because I sometimes recollect an old Polish joke. A Pole drew a squiggly line and his friend asked what it was. He said, "That is the party line". Then he drew a straight line and when asked what that was he said, "Those are the deviationists". I can well understand why the noble Lord, Lord Richard, tweaked the Government's tail as regards their present difficulties. However, having listened to some of today's contributions from his Back-Benchers, I believe that the noble Lord may need help from his friends if he is to carry the day for his own Euro-enthusiasm.

Of course, trying to hold together a split party is not an entirely dishonourable act. I suspect that the Prime Minister may well keep the memoirs of Harold Wilson as bedside reading. The truth is that the document which we are considering today, which is very skilfully written, is nevertheless addressed not to Britain's needs and priorities in relation to Europe but to the Government's needs and priorities in terms of their own unity. If fighting a battle at the bottom of the hill where two maps join is the worst form of warfare, then I suspect that having negotiations conducted in the last year of a Parliament by a lame-duck government is the worst form of diplomacy.

Today, my noble friend Lord Ezra dealt with the economy, my noble friend Lord Lester with the European Court and my noble friend Lord Taverne with sovereignty. They have tried to cover the various items which the White Paper covers. Because time is short, I wish to concentrate on the second pillar—foreign policy and security. It is interesting that the White Paper says that the CFSP is strongly in this country's national interest and has long been a government priority. It then goes on to say: Co-ordination of foreign policy is progressing well". The last point is self delusion. Any reflection on how the second pillar has worked over recent years must lead to concern, if not shame, for Europe. We are a continent whose population, wealth and trading power and, indeed, probably military capability are equal to those of the United States. And yet in truth, whenever Europe really needs its chestnuts pulled out of the fire, it is still dependent on United States involvement, as we have seen in the Middle East, in the former Yugoslavia, in Southern Africa and at other flash points.

In what I hope is a non-partisan way, I say to the Minister and the Government that I hope that they will give priority to the second pillar. A number of noble Lords, including the noble Lords, Lord Kennet, Lord Chalfont, and others referred to that. The nature of today's debate has left the second pillar somewhat neglected. And yet, as a number of speakers have said, national security and our capability to influence world events is of extreme importance.

Within the White Paper there is a great deal with which people of all parties can agree: the welcome strengthening of the secretariat; the idea of a single foreign policy spokesman, although I note the comments that the noble Lord, Lord Kennet, made on that; and the need to look at the relationship between the European Union and the WEU. A great deal of positive work can and should be done. Britain, with its role in the UN Security Council, the Commonwealth, the Union itself, NATO and the WEU is, if not uniquely qualified, extremely well qualified to take a leadership role. Even amidst some of the other matters which are taking place surrounding the IGC, there is a need and an opportunity here for Britain to take initiatives.

One well understands from the Prime Minister that there is no possibility of a "Bothamesque" innings in the run-up to the general election. He will have to play a very straight bat on many of those issues. But I believe that in relation to the second pillar, there is scope and the need for Britain to take a lead and to give it priority. Indeed, by doing that, we may help to ameliorate our image of always being on the outside, which has been referred to by the noble and learned Lord, Lord Howe of Aberavon, and others.

I do not wish to delay the House much longer but, as somebody who, as I mentioned earlier, came into the debate in student politics in the early 1960s and as somebody who has remained committed and involved with the European debate for 30 years, I find extraordinary the belief underlying some of the comments from the Europhobes or Eurosceptics that they are the only ones who are patriots and realists. I listened to the speech of the noble Viscount, Lord Tonypandy. I am very fond of him. He once reminded me that you never forget your first Speaker. For me, he was my only Speaker. But I must tell the noble Viscount that I remember much more clearly the number of times I was not called than the times I was called. That may be a burden which all Speakers must carry.

However, I cannot go along with the language and tenor of the noble Viscount's argument any more than I can go along with the contributions of the noble Lords, Lord Bruce of Donington, and Lord Stoddart of Swindon. They talked about a Europe which I do not recognise—a Europe of enemies and conspirators. I worked with Europeans during those 30 years and I do not recognise the Europe of their fantasies.

They talk about the need to consult the British people. The British people were consulted in a referendum in 1975. But of course they say that was a cheat; that it was false; that it was not the right question or the right answer. In 1983, the Labour Party fought an election on withdrawal without a referendum and was soundly beaten. It is often forgotten that one of the reasons for the Prime Minister delaying the 1992 general election was so that every candidate and every elector would know in advance the full Maastricht package. And still that did not help.

I suspect that, in some shape or form, we shall have to consult the British people again on this. We have had indications from both Front Benches on that. In many ways, I feel like one of those old gunfighters in B-movies who does not really want to do it but he gets down the guns and clamps them on again. If that is what the Europhobes and the Eurosceptics, or the realists, want, I suspect that we shall take them on again in taking this case to the British people.

But the Europe that we shall take to the British people is much closer to the Europe described by the noble Lord, Lord Elis-Thomas; mainly, a Europe of the regions. I do a lot of speaking around the regions about European issues. The debate which has been taking place today in this House would be entirely alien to those people, because their debates are much more practical and are about direct co-operation with sister regions in Europe and, as the noble Lord, Lord Bowness, reminded us, the operation of Europe at the three levels—the level of national sovereignty, the level of the European Union, but also, increasingly, the level of local government.

Those are the issues. At some time in the future I am sure that I shall do battle with noble Lords, although I doubt whether I could deal with them quite as laconically lethally as did the noble Lord, Lord Cockfield.

A great deal of history has been quoted at us today. One of the images which stays in my mind is that of the great Low cartoon of the British Tommy, sweat and grime covered, holding the laurel wreath of victory and saying, "Here, don't lose it again". In great contrast to the first World War, since 1945 we can say we did not lose that peace which was so hard and bitterly won. We set an example to the world of how former enemies could work and co-operate together. The Europe that I am quite happy to take to the British people is a Europe of peace and prosperity and a Europe willing to work for that peace and prosperity in a wider world.

7.50 p.m.

Lord Pearson of Rannoch

My Lords, since it is my privilege to follow the noble Lord, Lord McNally, perhaps it falls to me to point out to him that he has just perpetrated one of the classic Euro myths of the age which is to suggest that the British people were offered a referendum on our membership of the European Union. We were not. We were offered a referendum on our continued membership of the European Common Market and we were assured by all concerned that no loss of our sovereignty was involved.

I might also tell the noble Lord that he seems to assume that those who favour European integration are the good friends of Europe. I must tell the noble Lord that many of us on the other side of the debate regard ourselves as better friends of Europe because we wish to prevent Europe from continuing to go down the disastrous path upon which it is set.

When I saw that my noble friend, if I may refer to him as that, Lord Tonypandy, was due to speak, I had a sort of feeling that he was likely to say everything that I wanted to say, to say it much more eloquently and with very much more authority. I have to say that he did so. Therefore, perhaps I may use the opportunity of this debate to repeat some of the questions to the Government about our relationship with Europe which I have been asking for some two years now, but to which I do not seem to get answers. Indeed, I am beginning to think that this may be because the Government do not want to look for the answers, which I suppose they might find uncomfortable. Of course, I hope that I am wrong and that my noble friend the Minister can, therefore, be more forthcoming today.

My first question is about our old friend subsidiarity, as set out by Article 3b of the Maastricht Treaty, upon which the Government placed so much reliance at the time of our debates on the Maastricht Treaty in 1993. The White Paper repeats on page 11 the old self-deception that: The Community should act only where it has been given express competence [to do so] and where action at the European level will bring clear benefits which cannot be achieved by Member States acting alone". The questions here remain the same as those that I started to ask in our debate on the Maastricht Treaty in February 1993. They are: who decides the areas which fall within the exclusive competence of the Community, and who decides those which are to remain under national sovereignty? Secondly, so as to be able to judge whether the Government's answer to that question is likely to be shared by our partners in any eventual vote in the Council on the problem, can my noble friend say which countries agree with Her Majesty's Government on this issue?

Until we get clear answers to these fundamental questions, I am afraid that some of us will continue to regard subsidiarity as the sham that we always said it was. If my noble friend wishes to disagree with this, can she say where the balance of power now lies in the conflict between subsidiarity and the acquis communautaire? In other words, if my noble friend is going to repeat that subsidiarity is working in the way that we want it to work, as she has already indicated in her opening remarks, can she tell us of progress towards the repeal of 25 per cent. of all Community legislation which we were promised by my right honourable friend the Prime Minister nearly two years ago? If my noble friend claims that subsidiarity is working in our favour, can she at least say how that squares with the acquis communautaire, or the doctrine of the occupied field, which holds that, once the Community has devoured an area of national sovereignty, it can never be required to give it up? Here again, one has to ask: how many of our partners would agree with the Government's interpretation of this dilemma? I would be most interested to hear my noble friend's reply.

While on the vexed question of interpretation of the treaty, I see that my right honourable friend the Prime Minister has just signed up to the Presidency Conclusions of the Council in Turin on 29th March, which declared that the IGC has, the purpose of creating an ever closer union among the peoples of Europe". That wording of course exactly reflects the wording of Article A of the Maastricht Treaty. I would be grateful if my noble friend could correct me if I have got it wrong, but I understand that the Government's interpretation of this clear statement of intent is that it would be delightful if the peoples of Europe were to be even more friendly than they are already, but that the word "union" does not imply any further progress towards political union. If this is so, once again can I ask my noble friend to say how many of our European partners share whatever the Government's view turns out to be on this very disturbing declaration?

The second area where I have been pressing my noble friend on the Front Bench for sensible answers is the eventual enlargement of the Community, to which the White Paper pays the usual lip service. But can I ask my noble friend if the Government are any clearer in their own mind as to whether enlargement of the Community will necessarily lead to its deepening or increasing the power of the centre, particularly of the Commission and of the Court, as many of us continue to fear? Can my noble friend say how many of our partners agree with the Government on this one, too?

Whatever the answer to that question may turn out to be, the prospect of enlargement appears to be ever more of a mirage, and an unkind mirage at that to our new eastern European friends. I say this because, as the White Paper admits on page 3, reform of the common agricultural policy and of the Structural Funds is necessary before any of those friends can be admitted. However, such reform seems at best unlikely. If my noble friend thinks that I am wrong, can she say why she is confident that the necessary qualified majority vote will be achieved which could give rise to the CAP reforms that the Government deem necessary to achieve enlargement? In other words, can my noble friend say which countries the Government consider will vote with us for the necessary reforms without which enlargement will not take place?

While on the subject of the qualified majority vote, I was disappointed to see that the White Paper does not spell out perhaps the Government's main difficulty with the present system, which will require unanimity before it can be changed. There is indeed a helpful table on page 13 of the White Paper, which sets out the qualified majority votes of each member state. The paper is also right to point out that the United Kingdom, France, Germany and Italy with over two-thirds of the EU's population, will only have 10 votes each, or 40 votes out of a total of 87 votes. One might just mention that Germany and ourselves are the principal paymasters of the Communities, but perhaps this is not the moment to dwell upon such anti-social, politically incorrect and anti-communautaire points.

Be that as it may, the difficulty which does not appear to be spelt out in the White Paper is that 26 votes constitute a blocking minority; and 62 votes are required to carry a vote. Thus countries with only 26 votes between them can prohibit change to existing policies, and block new policies in areas such as the single market, agriculture, transport, external trade relations, most decisions on environmental matters and also on research and development.

I recommend the table on page 13 of the White Paper so that one can see exactly how these votes fall. These are the votes up against which the Government find themselves when they bravely say that they will press for this or that change to the common agricultural policy, or any directive or policy in any of the other areas that I have mentioned. It is against the blocking minority of only 26 votes that I put the question to my noble friend the Minister about her confidence that the CAP can indeed be amended as necessary to permit widening.

I put the same question to my noble friend who was on the Front Bench during our debate on 18th March last on the fruit and vegetable regime. This absurd Community policy, as your Lordships may recall, distributes some £112,000 million annually, principally to France, Greece, Italy and Spain so that they may grow largely unwanted fruit and vegetables. I do not know whether my noble friend on the Front Bench was joking during that debate when he estimated that if all the unwanted nectarines grown in Greece each year were to be put into articulated lorries, those lorries would stretch around the entire coastline of the British isles. This seems such an extraordinary statistic that I wonder whether my noble friend on the Front Bench today could confirm it. Could she also confirm my understanding that the nectarines are in fact buried in a valley in Thessaloniki causing a severe environmental hazard?

This is the sort of bog into which we have stepped by our participation in the Treaty of Rome, but the point is that we are unlikely to be able to change the fruit and vegetable regime because the four recipient countries have 33 votes between them—comfortably more than the 26 votes required to block any change to the policy. Some areas are worse. To change the common fisheries policy for instance would, alas, require unanimity in the Council of Ministers which makes its revision almost impossible to contemplate unless, of course, we were to leave the Treaty of Rome and extricate ourselves from the bog to which I have referred.

Baroness Elles

My Lords, I am most grateful to my noble friend for giving way. I cannot quite understand his argument. Is he arguing that we should have simple majority rather than a blocking minority which might stop some of these changes? If one has a simple majority, one gets one's change of the CAP with no problem at all. I hope that my noble friend can clarify the argument he has used.

Lord Pearson of Rannoch

No, my Lords, my noble friend, if she bears with me, will come to realise that I am advocating that we leave the treaty altogether. In the meantime I am pointing out the difficulty of getting change under the voting system as it is. I do not think that the blocking minority of 26 votes is sufficiently considered when Ministers say that they are going off to Brussels to argue for this, that and the other, which a comfortable blocking minority does not want to change.

This brings me to my remaining questions about our negotiating position at the intergovernmental conference. The fact is that we simply have not dared to take an objective look at whether we would retain access to the single market if we withdrew from the Treaty of Rome itself. Withdrawal from the Treaty of Rome does not seem to me to be such a terrifying prospect. After all, Norway is booming, and so is Switzerland which now exports three-and-a-half times per capita to the Communities than we do, even after one leaves out her banking activities. Of course I accept the point of my noble friend Lord Cockfield that the volume of our trade with Europe—whatever that turns out to be—is important to us. However, we trade in deficit with Europe. Therefore I cannot see why Germany, France and the others would want to cut off their noses to spite their faces and start any kind of trade war against us if we left the treaty. If they did, they would find the currency markets making their lives uncomfortable quickly and of course, more importantly, they would be breaking the GATT which we signed collectively with our European partners, but also individually as sovereign states.

I wonder whether my noble friend can tell the House which treaty the Government regard as being superior, the GATT or the Treaty of Rome, or, to put it more simply, would the GATT hold if we left the Treaty of Rome? When I have put these sort of questions in the past I have been told that the Government consider the advantages of our membership of the Union to be so self-evident that we should not dream of leaving the treaty, or even of carrying out a cost benefit analysis to see whether Swiss or Norwegian status might suit us much better. The Government trot out the mantra of all the inward investment which they claim we have enjoyed because of our membership of the Union. But did that investment come to us because of our access to the single market, our good labour relations, our low inflation, our low corporate taxes and because we speak English, and not because we bear the disadvantages of Union membership as well? Those are the sort of questions which an objective cost benefit analysis would start to answer.

One of the Government's favourite statistics is that this foreign investment has brought us some 650,000 jobs. I find it interesting that that is precisely the number of jobs which the Government hold to be at risk from the BSE scare, so thoughtfully stoked up by our friends in Europe. I fear that without such an analysis we enter the IGC negotiations not knowing the point at which we are prepared to get up and leave. As I mentioned in our debate on 12th December last, no sane businessman would do such a thing. In that debate I also mentioned the strength of Article N of the Treaty which allows us to prevent any treaty change with which we do not agree.

It is this power which brings me to monetary union which is clearly on the agenda at the moment, if only because—thank goodness!—it is not working at all as the Maastricht Treaty envisaged. In fact Article N, together with Articles A and B to which it refers back, make it clear that monetary union could be on the IGC agenda if we wanted it to be. Whether or not it reaches the IGC agenda, it is the wounded beast of monetary union which looks certain to give the Government a rare opportunity to extricate this country from the quaking bog of the treaty to which I have referred. I suggest this because the convergence criteria for EMU are clearly in trouble. In fact at the moment it looks as though only Luxembourg may meet them. Yet it seems certain that the French and German Governments, and maybe one or two others, will still be determined to proceed with EMU even if they cannot meet the necessary treaty criteria. They will therefore need to slip the criteria and delay the starting date or otherwise change the treaty, but this they cannot do without our consent unless they sign up to an entirely separate treaty, supported by a separate bureaucracy with all the costs and public difficulty which that would cause, and which I, for one, am convinced they would not do.

That is the trump card which is in effect already lying on the table in front of Her Majesty's Government. The Government have shown that they understand the game because they have wisely dismissed the unfortunate suggestions made in Verona that we should volunteer for some new form of suicidal exchange rate mechanism in the happy event that we and others manage to avoid EMU itself. But I am asking the Government to play the game to its now logical conclusion. The desire on the part of some of our European partners to proceed with the folly of EMU appears to be so strong that our price for allowing them to do so should be high indeed. In the view of what appears now to be a growing majority of the British people, that price should be our continued access to the single market after our calm and confident withdrawal from the Treaty of Rome, and our elevation to the relationship with Europe which is at present enjoyed by Switzerland. I can but urge the Government to examine this card carefully and then to play it with vision and with courage.

8.7 p.m.

Lord Moran

My Lords, I welcomed a good deal of what the noble Baroness said in her helpful speech introducing this debate. The White Paper is in my view a good document—clear, robust and persuasively argued. If this is to be the Government's attitude throughout the IGC negotiations we have little to worry about. But will the Government stick to their guns? All too often, whether it is Northern Ireland or Europe, the Government have started off with an admirably firm statement of their approach and then, when they came under pressure, have progressively given more and more way. To do that in this IGC would be a disaster.

Unanimity is required in the IGC for any substantial changes and it is vital that the Government should stand their ground, decline to appease the clamour of the federalists and argue for the sensible changes they have themselves proposed. In that context the noble Lord, Lord Bruce of Donington, told us about the association of the European Parliament with the IGC. What he said was disturbing. I do not think it will do simply to make the compromises advocated by the noble Lord, Lord Cockfield.

I pointed out after the repetition of the Statement of the Foreign Secretary by the noble Baroness on 12th March that the Government's proposals were very much in line with the recommendations of your Lordships' Committee on the 1996 IGC, of which I was privileged to be a Member. We, too, were against an extension of qualified majority voting, against more powers for the European Parliament and against any abandonment of the purely intergovernmental nature of co-operation on foreign and security policy, justice and home affairs. What I think was significant was that these recommendations were made by a committee on which the whole range of views on Europe were represented and on which those of us who could be described as Eurosceptics were a small minority. I hope that the Government will take careful note of that.

There is, however, a strange contradiction in the Government's approach. Given the White Paper's emphatic rejection of what it describes as, an even closer Political Union in the sense of an inexorable drift of power towards supra-national institutions, the erosion of national parliaments, and the gradual development of a United States of Europe", the Government's declared determination in the White Paper, to safeguard the powers and responsibilities of the nation states", and the passage in the Statement repeated by the noble Baroness that, the Government are totally opposed to a monolithic, centralised, federal Europe", how could they have put their signature to the Maastricht Treaty, which was a blueprint for the achievement of economic integration leading inexorably to political integration and a single European state?

The White Paper says that, there is no fixed agenda for the IGC", but that economic and monetary union, is not expected to be discussed at the IGC". Nor apparently is the common agricultural policy. It seems odd that in a conference designed as a follow-up to Maastricht there may be no discussion of EMU, the heart of the treaty or of the most important question now facing the EU, that of a single currency.

I have on a number of occasions argued in this House that a single currency must lead to a single country. Most Germans have always been clear about this. Recently Professor Otmar Issing, the chief economist of the Bundesbank, said that a single currency would not be credible without a single European superstate, and he made exactly the point that I have sought to make in this House; namely, that there is no example in history of a lasting monetary union that was not linked to a state entity. Professor Issing went further, saying that the plans for a single currency could destroy the Union because they are so misconceived.

Given the clear views expressed in the White Paper about the Government's total opposition to a centralised Europe, I find it hard to understand why they do not rule out our adopting a single currency, which would lead precisely to the centralisation to which they say they are opposed.

The Cabinet's decision to have a referendum if it and Parliament were to decide to get rid of the pound and adopt the euro is no substitute for a decision now. It is not the referendum that I have all along wanted—which is a vote on whether we should continue down the path towards a European state or should stick to co-operation between sovereign states.

One problem which is on the IGC agenda is the common fisheries policy, about which the noble Baroness, Lady Wilcox, spoke in her splendid maiden speech. On 12th March the noble Baroness commended to me paragraph 65 of the White Paper. I recognise the Government's determination to work for changes, but I do not see how they can hope for a solution in the IGC. Treaty changes require unanimity, and why should we expect Spain and the Netherlands to share our objections to quota hopping? We should, I believe, have realised immediately that the European Court's Factortame judgment knocked the bottom out of the CFP, based as it is on national quotas and what is called "relative stability", and insisted straightaway that in the light of the Court's decision the CFP should be abandoned or drastically amended.

But now suddenly the whole situation has altered. BSE has, I think, been a watershed. It has at last dawned on the British public to what extent we have already ceased to be masters of our fate. It began with fisheries, when we were not only forbidden to preserve British national quotas for British fishermen but are to be forced to compensate the foreign boats we temporarily prevented from masquerading as British boats. Then on trade we find that we are forbidden to export to any country in the world even those products which are described by the World Health Organisation as perfectly safe. The Community's ban on our exports of animals and products has been described by the Government as: not justified … not based on sound scientific analysis [and] disproportionate". The spectacle of our "partners"—and the word now is almost always put in inverted commas—maintaining this monstrous world-wide ban and demanding the wholesale slaughter of British cattle without any scientific justification, described by the British Veterinary Association as on a par with the burning of witches, has shocked people in this country who realise perfectly well that our "partners" stand to gain enormously if they can bring about the destruction of our cattle industry. I have not observed any of them declaring their national interest. And Herr Klaus Kinkel has openly linked the ultimate prospect of the lifting of the ban with a demand for concessions by the UK at the IGC—in other words, the abandonment of the stance set out in the White Paper. A more blatant attempt at blackmail it would be difficult to imagine. One might be forgiven for thinking that our "partners" really wish to do us down, or perhaps to drive us out of the EU. Certainly it is hard to discern any sign that they might be our friends.

I do not really see how we can go on like this. I cannot imagine that the British people will continue indefinitely to turn the other cheek when they are constantly abused by commissioners and leaders of European governments, and when in vote after vote we are one against 14. I fear that for too long the Government have pretended that things are otherwise than they actually are. The fact is that, as the noble Lord, Lord Beloff, reminded us, for historical and geographical reasons we have a different agenda from other European governments, different objectives and a different vision. It is not true, as the Government have often said, that the tide is flowing our way and that other governments are coming round to our view. The gulf is as wide as ever. It may well be unbridgeable.

I fear that viewed from this island the EU is becoming not merely irritating but positively unreal. Just this past week we have had the ineffable Herr Bangemann emerging from the woodwork to call for the UK to abandon the three-pin plug, at huge cost, in the interests of harmonisation. Then even so enthusiastic a Europhile as Mr. Kenneth Clarke must have wondered at Verona whether his European colleagues were serious in expecting him to go back into an ERM, while the Commission apparently suggested that it might supervise national budgets; and the vets and politicians dealing with beef have lost all contact with scientific reality. News from Brussels seems more and more like the communications many of us receive from L. Ron Hubbard or the Transcendental Meditationists at Mentmore.

Writing last month in the Sunday Telegraph Sir Charles Powell said that his years working at No. 10 had taught him: never knowingly to underestimate the remorseless resolve of Europe's institutions—the Commission, the Court and the Parliament—to extend their powers at the expense of Europe's nations". His conclusion—which is interesting in the light of what the noble Lord, Lord Cockfield, said earlier—was that after we have seen how the IGC works out and whether, effective barriers against future unwarranted intrusion by Europe can even at this late stage be constructed in co-operation with other member states", we may need to amend the European Communities Act 1972 to make it clear that Parliament, can by express provision override Community law", just as the German constitutional court has held that in certain circumstances its judgments take precedence over those of the European Court. I think that if the European institutions, along with Chancellor Kohl and his associates, continue to press for ever further and more rapid progress towards economic and political integration, we may well need to act as Sir Charles has proposed, though now perhaps sooner rather than later, or in the last resort to consider leaving the Union in favour of a primarily economic association like that of Norway, to whose current happy state the noble Lord, Lord Stoddart of Swindon, drew our attention.

I was in Norway twice last year. It was a strange feeling being in a free country which was able to decide for itself how to deal with its problems and what policies to pursue. That was once the position in this country. But now we are forbidden by others even to export fruit pastilles to the rest of the world. We are shackled. I think the time has come when we should set about regaining our freedom.

8.19 p.m.

Baroness Elles

My Lords, each member state has its own political objectives and approach to this current IGC. Many of us are grateful to the Government, and in particular to my noble friend Lady Chalker, for introducing the report today and for the general debate on the issue. We in this House have the benefit of considerably more time to debate this important issue than the rather short time that was given to it in another place. The Minister will have an opportunity to pick up the wide range of views from speakers such as the noble Viscount, Lord Tonypandy, and my noble friend Lord Kingsland, who assumes—wrongly, I believe—that we are already within reach of being a federal state. We are not, nor shall we ever reach that goal, which is one that we ought not to consider. A wide range of views on broad issues have been expressed.

There are two improvements which all member states of the Community would wish to see come out of the IGC. The first is an increase in the efficiency of the Community's institutions. The second is the taking into account of the prospect of the future enlargement of the EU. Enlargement is an objective of the United Kingdom in particular.

I wish to make a few general points. We should remember that each time there has been an IGC there has been a step forward in an important direction. The single European market was the last such step and it has almost been completed, largely due to the magnificent work of my noble friend Lord Cockfield. He set out in his own hand the programme which is clearly written in English by him and from which we were all able to benefit.

However, that has its downside. The 300 directives which were introduced in order to form the Common Market have sprouted many regulations to bring about the implementation of some of the directives in detail. When people talk of Europe being close to the citizen, or becoming closer, what has come closer is the number of regulations emerging mainly from the Commission. These were never properly explained to the people of Britain, who were concerned about them. One cannot abolish several hundred national non-tariff barriers in each of the member states and expect them not to be replaced by a European legal norm. Several hundred national regulations have been replaced by single European regulations. That is where so much has been misunderstood about the functioning of the European single market. In order to obtain the benefit of the single market, that legislative process had to be gone through.

Secondly, we forget that the original six states were not only motivated by the fact that each had been occupied by others of the six. They were also motivated towards closer co-operation following the second world war by the threat of the Soviet Union superpower on their eastern border. That somewhat changed the look of Europe in the past few years, wrongly in my view. Since the fall of the Berlin Wall, people's attitudes to the state of Europe have relaxed. As I am sure my noble friend Lady Park will remind us, the state of Russia, with the coming presidential elections, does not allow us to sit back and consider that we are living in a period of safety in Europe. It emphasises all the more strongly the necessity for closer co-operation in Western Europe. It is still a vital consideration in the overall perspective of developing and protecting our mutual interest. Therefore, we must still rely on the commitment to NATO for our defence and security. For that reason, I do not believe that there should be any change to the second pillar of the CFSP in the Maastricht treaty, nor the retention of anything but a unanimous vote.

My third point concerns Britain's idea of the enlargement of the EU to include central and eastern European states. That should be tempered by recognition that, when the peoples of Greece, Spain and Portugal sought to enter the European Community, it was to strengthen their return to parliamentary democracy. We must accept that some eastern European states have not reached a stage of pluralist parliamentary democracy such as we know in western Europe. Many of the economies concerned are in no state to withstand the economic development of western Europe. Therefore, I believe that they should be given assistance and help, with continuing European agreement to help them develop their economies and establish democratic parliamentary systems. But the issue cannot be examined in the near future with a view to offering some of those states early enlargement.

In his interesting speech, my noble friend Lord Beloff recalled the history of our great nation. He did well to remind us that we have a centuries-long historical tradition of nationhood which is not shared by many of the member states of the European Community. We cannot ignore that. But, so far as I understood him, my noble friend stopped at the year 1940–41. I too am old enough to remember that year when we were the only state in Europe that was free. For a certain time we had no allies except, eventually, Greece, but we were able to establish and assist in establishing a free western Europe. It is worth recalling a point which has not yet been mentioned: since 1945 our contemporary European history has been a tribute to Britain and other member states in Europe. We decided that, for our own interests—those of people in Britain—as well as of other member states, we must try to co-operate and confirm both the political and the economic stability that we have been able to enjoy since 1945. That is a period of just over 50 years. For all the glib talk about nectarines, oranges and the vegetable and fruit regimes generally, let us remember that there are far more important issues and that they relate to the protection of the people of western Europe.

I wish to deal with a few details, of which one is democratic legitimacy. This is dealt with in paragraph 18 of the White Paper, A Partnership of Nations. There is a list of main issues which will be debated or considered by the IGC and I shall pick out two or three. An important one was touched on by my noble friend Lord Pearson of Rannoch. The point which cannot be ignored is the relationship between the weighting of votes by member states and size of population. My noble friend might have been leading up to that but did not quite reach it. The point relates to the prospect of enlargement of the Union to include a number of comparatively small states. As the number of member states increases, an inevitable imbalance between smaller and larger states is created. Whereas for the purposes of QMV by the original six member states in 1957, following the signing of the Treaty of Rome, the population size of the majority reached a minimum threshold of 68 per cent., with 15 member states the threshold is now below 60 per cent. That means that, when there is a qualified majority vote, it can represent less than 60 per cent. of the population voting in favour of the issue in question. That cannot be right if we claim that ours is a democratic system. Unless a change is made to the weight attached to member states' votes, there could, with the future entry of smaller states, be a majority vote representing only about 47 per cent. of the European Union population. That cannot be right, and the issue will be looked at closely during discussions on the procedures of the IGC.

I also wish to comment on comitology, which was established by a decision of the Council in 1987. It is worked by the Commission and national representatives from civil servants of member states. Something which the European Parliament would have liked to deal with but did not have the power concerns the bucketfuls of draft legislation which come through from over 300 management committees. This has no democratic or parliamentary scrutiny. I hope that the Minister will take that problem on board and ensure that a proper process of democratic scrutiny is carried out on the more relevant draft regulations. Some deal with agricultural matters.

Sir Leon Brittan, when he gave evidence to the sub-committee on the IGC, mentioned the different values of the types of regulation and management decisions that go through those committees. Some are extremely important; they affect the rights of individuals. They need scrutiny, just as we have scrutiny in both Houses in this Parliament through either negative or affirmative resolution or certain statutory instruments. It may well be considered that some form of delegated legislation scrutiny committee should be established, possibly consisting of certain Members of the European Parliament together with chosen representatives from each of the national parliaments. These regulations are very important, and the fewer the directives now being adopted the more regulations we are confronted with. This is an important aspect of the legislative process.

My noble friend the Minister quite rightly mentioned the question of European Community legislation and some of the problems that attach to the European Court of Justice, partly as a result of the bad drafting of EC legislation. Very often, at the end of the day it comes in the form of diplomatic or political compromise. That is not the same as having to interpret in law certain texts written and drafted in legal form and which convey definite meanings. That has been one of the problems of the European Court of Justice: it has had to interpret very widely differentiated legal texts which do not have the same detail and authenticity as legislation coming from our own national Parliament.

The same applies to the implementation in member states of EC legislation. It is not always compatible. I have several times drawn attention to what is now technically termed "gold plating". The Civil Service chooses to add certain original ideas to the texts of directives or regulations coming from the EC that were never intended for inclusion in the legislation in its original form. Again, this matter should be examined very much more closely to see that the texts of EC laws are identical throughout the member states; they are certainly not so at the moment.

The European Court of Justice has been the subject of some comment. I thank the noble Lord, Lord Lester of Herne Hill, for his comments on the work of the Court. Nobody likes to be condemned by a court, particularly one at a supranational level. However, apart from Denmark, the United Kingdom has far fewer indictments by the European Court than any other member state, including Germany, Italy—which has several—France and Belgium. Those four countries, well known for talking of European integration, have a very bad record with the European Court of Justice. The United Kingdom comes out extremely well. Therefore, from the point of view of the UK position, we have no reason to disapprove of the judgments that have come from the European Court.

Let us be reminded that, even in this country, we have seen Ministers who have come under a form of judicial review and who have perhaps not been too keen on the findings of the English judiciary as regards certain matters for which they have been criticised in our own courts. This is a perfectly acceptable approach. If we believe in the rule of law, we must accept the findings of the judiciary and seek to amend our own laws in order to conform to the texts of the treaties and the laws agreed unanimously by member states.

Much has been said about Factortame and the question of Spanish fishermen. The Merchant Shipping Act 1988 was the one Act that had to be suspended on the finding of the European Court of Justice. When it was drafted, many lawyers already recognised that it was totally contrary to the provisions of the treaty. I accept that the Government introduced that Act in good faith, but it was not in accordance with the treaty. The Court had no alternative but to decide that it was discriminatory on national grounds under the then Article 7 of the EEC treaty. It is easy to condemn the judgment, but there are perfectly good legal reasons why it was fair.

Perhaps I may mention one or two matters concerning the ECJ which need examining. Certainly, there will not be enough judges to deal in the court of first instance with the number of cases coming up, which will delay findings handed down by the court, particularly if there is to be enlargement.

Secondly, there are those who condemn the supremacy of the European Court. It is surely unthinkable that decisions can be passed down by a court that are acceptable in only one country and are totally irrelevant in another. If we are to have European Community law, it must be the same and it must be respected throughout all member states. That is a perfectly acceptable policy.

The problem of the temporal effect of judgments quite rightly concerns the Government. It is untenable to have a piece of legislation which has been in force, let us say, since 1973, in relation to which a judgment gives a different interpretation to the one that has been current throughout the member state. It would be reasonable, therefore, to consider whether judgments handed down could take effect as from the date of the judgment. There may be an alternative way of dealing with the problem, but it certainly needs examining. It was already accepted in principle in the provision in the Maastricht Treaty in regard to the Barber case. This is not creating a new precedent; it is perfectly justifiable for the Government to see whether they can get some agreement on the issue.

There are many other issues. The rule of law is the most stable element of our European Community system. I believe that the maintenance of peace and political stability within our western European region, the continuing of a pluralist parliamentary democratic system in each member state, and respect for the rule of law, are basic to our European way of life. I hope that we shall continue to share that way of life with our European partners. I wish my noble friend the Minister and the Government the best of luck in proceeding with the IGC to a satisfactory outcome in the interests of the British people.

Lord Pearson of Rannoch

My Lords, before my noble friend sits down, can she clarify something I may have misunderstood?—namely, that she found my comments on the fruit and vegetable regime "glib". If I did not misunderstand her, does she have any disagreement with the report of your Lordships' Select Committee on the fruit and vegetable regime; and does she not agree with me that the difficulty of changing it is raised, at least in large part, by the fact that the four recipient countries of the largess of that regime have a blocking minority between them?

Baroness Elles

My Lords, I hope my noble friend was not offended by my remark on the fruit and vegetable regime. When we discuss the future of Europe, very important issues arise. I sometimes feel that just discussing nectarines and other fruit and vegetables is not the level at which one hopes the discussion will be carried on. I quite accept that there are problems with the fruit and vegetable regime. I accept that the report of the Select Committee was excellent, and it is quite clear that measures have to be taken. The fact that it was recognised by the Select Committee of this House as a matter needing to be dealt with led to a recommendation by that parliamentary committee. I very much hope that it will succeed in having its recommendations carried out.

8.37 p.m.

Baroness Park of Monmouth

My Lords, noble Lords may be relieved to hear that I shall say much less than usual about Russia. My concern is with the proposals for an external identity for the European Union. That promises an uneasy combination of general naivety, especially on the subject of Russia, and not so latent ambition by the Germans, and to a lesser degree the French, to be the masters in the European Union. The Turin presidency conclusions, to which Her Majesty's Government have subscribed, call for "a strengthened capacity for external action of the Union … the need to strengthen its identity on the international scene … the Union's political weight must be commensurate with its economic strength … the consistency and the unity of all dimensions in the Union's external action needs to be reinforced." There follows the familiar objective of implementing a common foreign and security policy. Why? Is that aim either sensible or desirable?

Let us consider Iran. The Germans and the French believe that they can tame the tiger by feeding it sweets. They do, of course, have excellent trade reasons for that. By a happy coincidence, Mr. Primakov feels that he can do business (both politically and in terms of selling nuclear know-how) with Iran. Consider Serbia. The Germans and the French—and once again the Russians—all wish to develop a loving and, no doubt, lucrative relationship with Milosevic. Take Russia itself. The Germans have invested heavily in Russia (in itself a good thing) and the very large population of former east Germans will no doubt retain close relations with the Communist nomenklatura which is gradually emerging in its true Soviet colours. Germany is trying to repudiate the Potsdam agreements in the context of the Sudeten reparations and will no doubt try again to repudiate the Oder-Neisse agreements.

I agree with my noble friend the Minister that Poland, the Czechs, the Slovaks and the Hungarians are unlikely to be reassured at the idea of entering a European Union dominated by Germany, especially a Germany which is forging special links with Russia that cannot seem but be at their expense. Yet, if we accept and even encourage the concept of an EU identity, with its own foreign policy, which it can impose through common actions that have the force of law, we are sending a message to eastern Europe that cannot reassure it. The people are already discouraged both by the demands of harmonisation and the protected tariff barriers which they are encountering.

Let the European Union stick to what it does well: the TACIS programme and Phare, its economic operation. The CFSP should remain intergovernmental and the EU should not be encouraged to seek to develop an external identity. It is not informed or cohesive enough to make sensible foreign policy. It can only confuse the issue and diminish NATO's role. If proof were needed, I quote from the draft Common Position which the EU put out on the basis of Article J.2 in July last year for consideration by the Council on the European Union and Russia, where it advocated: involving Russia more closely in discussions of the European security architecture through enhanced dialogue with NATO; a strengthened role for the OSCE; and the development of relations between Russia and the Western European Union". It went on: It will seek to intensify the dialogue between Russia and NATO … promote OSCE strengthening … and the development of relations between the Russian Federation and WEU, and contribute to the further examination of a specific arrangement between the Russian Federation and the Atlantic Alliance, which would set up regular ad hoc procedures of consultation and dialogue". It is indeed vital that Europe and the United States should find the means to live peacefully with the Russians, provided that we do not do so at the expense of the eastern European countries which suffered for so long at the hands of the Soviet Union. But nothing will play into the hands of the Russians and their embryonic new Soviet Union, the CIS, so much as leaving the relationship to be defined by an inexperienced and incoherent European Union identity. The Commission—the bureaucracy—wishes to usurp the functions of NATO and the WEU and to promote Russia's favourite (because it is wholly toothless and ineffective) international body, the OSCE, as the chief negotiator. For what and on whose behalf? Do we want a repetition of Jacques Santer saying as he did in Moscow last year, "We have always thought that NATO should not play a military role"? We are already worried about nuclear proliferation. Let us not dissipate effort and complicate policy by bureaucratic proliferation, too, just to keep the European Union happy and busy.

We risk creating, even if we do not create, a German giver of diktats—a second UN, politically correct, ineffective and powerless and extremely expensive. It will be both confusing and dangerous to have: a single figure to represent the foreign policy of the Union to the outside world for the CFSP". That does not square with our statement that questions of defence go to the heart of national sovereignty and are not matters for decision in the EU.

Let us remember that the European Union and especially the Germans supported the Russian drive to end COCOM, which was finally abolished in 1994, and that Mr. Delors and others argued that a successor to COCOM to include Russia would be infinitely better. Russia would be on the side of the angels. Noble Lords will have seen that the first meeting of the successor to COCOM—known as the Wassenaar Arrangement—set up to regulate the international arms trade and especially to prevent the sale of Stealth technology, ballistic missile defence systems etc., collapsed earlier this month when Russia, a signatory, refused to co-operate. It was never likely to be otherwise. Now it is in the Council of Europe but is rejecting the humanitarian regime which is a condition of membership. Not least, it has been allowed quietly to fail to implement the CFE Treaty.

As to the OSCE, consider Chechnya where the OMON and Speznaz troops can perpetrate what horrors they please, and where the so-called elections which brought the Russian sponsored government to nominal power was a typical Soviet election with a 98 per cent. vote. The OSCE was not there for the election because it considered the conditions too dangerous. The same OSCE has still done nothing to settle the Nagorno-Karabakh conflict after three years of negotiation. That is why it is the Russian's and the European Union's favoured choice for negotiation.

There will be many temptations for the Government in order to secure some important concession or other (as happened when we recognised Croatia when it did not meet our criteria) to give way on issues that they regard as relatively unimportant, or to let through some weasel wording. I welcome the stress laid in the White Paper on the overriding importance of NATO. We must not, therefore, allow it to be whittled away nor the powers of the European Union strengthened, as they were in Article 228a at Maastricht and by such provisions as Article J3.7, which allows a member to opt out of a joint action only: provided it does not act contrary to the objectives or undermine the effectiveness of the joint action". That last phrase in effect nullifies the freedom of the opt-out; and is presumably one of the bases for the threats that are now being made to us about EMU.

Thus, I feel some concern about the statement in the White Paper which speaks of: Common European decision-making as opposed to cooperation", which might be so beneficial to us that they: justify some loss of unfettered national control over decision-making in the area concerned". Of course, we have to allow our Ministers freedom to negotiate. But I hope that they know from the start what is non-negotiable. We can lose nothing by taking a firm position when our interest requires it and we shall earn the future support of those central European states waiting to join who do not want to exchange one version of supranational control—by the Soviets—for a new German hegemony. Precisely because I believe in a free Europe and care about its people, I want to be sure that the European Union cannot be taken over. Freedom still needs to be defended.

8.48 p.m.

Lord Beaumont of Whitley

My Lords, I enter this debate at an angle. The speakers from these Benches are eminent and know more than I do on the subject. I do not rise just to add to what previous speakers had to say, nor, as a member of a team, to open up one more facet of a very complicated subject. I simply want to draw attention to the place from where I come, which has not been mentioned today although I suspect that a number of noble Lords throughout the House come from exactly the same place.

Your Lordships recently had a debate on the enlargement of the Community, a debate which was initiated by my old friend and noble friend Lord Wallace of Saltaire. I had an unbreakable engagement that day and was not able to speak in the debate. But I consoled myself with the thought that when I read Hansard I should be able to explore the depth of wisdom deployed by my colleagues in defence or otherwise of the proposition in favour of expansion, about which I had my doubts despite my party's commitment to it. It was a good debate. But I found my doubts in no way assuaged. In fact, I found them reinforced by the, as always, cogently expressed speech of the noble Lord, Lord Desai, who I am sorry to see is not speaking today.

Like a large number of my political colleagues, I became a convert to the European idea through the concept of a Europe which would never again have an internecine war. I believe my noble friend Lord McNally speaks from the same point of view judging from his contribution and I suspect that my noble friend Lord Wallace does too. I understand that to have been the great motivation of M. Paul Monnet and other founding fathers.

In pursuit of that great ideal I allowed myself, as did many other people, to be persuaded that the only way to achieve our aim of getting Britain into Europe was by selling to a nation of shopkeepers the idea of economic union. We really had to sell it as something which would attract the City and suggest that we would all be better off as a result. That may have been the only way to gain entry into the European Union, but it was tainted at the time. It proved to be disastrous and I do not believe that the economic European Union that we have joined is doing us any good. Those who, like me, allowed themselves to be persuaded—I am not blaming other people; I blame myself—have been hoist with our own petard. We should have been more honest at the time.

The inexorable logic of economic union, it seems to me, leads to the expansion about which we are all thinking, whereas I am clear that expansion would be a disaster. I am far from seeing it as the moral imperative that the noble Baroness, Lady Chalker, spoke of. First, a larger Union will become more and more unmanageable. Already the logistics are being tied in greater knots as we try to work out how many commissioners there should be, how we will run a union of such a size, who will have the right to dissent and how they will do so.

Secondly, for a union, even a Europe des patries, to be effective it must be able to muster a degree of loyalty right across its citizenship. Such a loyalty is spread very thin at the moment between, for instance, Cornish and Spanish fishermen. It would be almost non-existent between a powerful metropolis like London and an outlying poor region such as Romania. The necessary loyalty can be found in the Europe of which we are members at the moment. It can be found in a Europe which is united in its deep awareness of its roots in the Roman Empire, particularly in the form of its later flourishing which came to be called Christendom.

I am not so naïve as to think that we can or should cultivate an artificial revival of medievalism or theocracy. But we are rash to step far outside the boundaries of the national sympathies of the people who form the Union. It is probably largely agreed that any body which shares a currency must have an efficient means of sharing its wealth. A unit such as the UK must have means, if it is to stay healthy, to subsidise its outlying regions. In the UK we do that fairly efficiently and willingly. South-east England subsidises Ulster, the Highlands and Cornwall—not adequately, but it does. If there is to be a single currency to replace national currencies, I do not see the Scots, generous though they are, happily subsidising Croatia for long. A united Europe will be like the Hapsburg Empire, which it will resemble in more ways than one, and it will be fissiparous.

It is not too late to stop us being driven by Mammon over the precipice of enlargement like the Gadarene swine. We can say "no". What most of us wanted in our hearts was a Europe of peace, bound together by our cultural history. Let us have a political union—as close as you like—rather than an economic one founded on not very noble ideals and extremely inefficient in practice.

8.55 pm
Baroness Rawlings

My Lords, I support the White Paper and congratulate the person who thought up the very apt title, A Partnership of Nations. Perhaps the IGC would have more appeal if it was known universally by that phrase.

Much has changed since the first Messina meeting. The real reason for having this Intergovernmental Conference is surely because we find ourselves in a totally different environment from those post-war days, for four main reasons. First, the Iron Curtain has collapsed and now we, in the west, have a duty to embrace the new eastern and central European democracies and to protect everyone's peace and security.

Secondly, the technological revolution has made it possible to move trillions of dollars or pounds freely around the world. It is therefore very difficult for any single European government to control its economic destiny completely alone. Thirdly, there are also new pressures on governments; not just traditional sovereignty and the dangers of nationalism, but also the ability to cope with the enormous expanding populations of the world in the future. Fourthly, the attitude of our Atlantic allies towards Europe has also changed. The new generations in America have grown up with fewer links through family ties and shared war experiences. More importantly, the end of the Cold War induced a more inward-looking attitude on both sides of the Atlantic.

Set in that context, the White Paper spells out very clearly the Government's approach. I applaud its clear, positive, strategy for Britain to play a leading role and the determination to make the IGC a success. To quote one of the grand old men of Europe, Jean Monnet, Nothing happens without men, but nothing lasts without institutions". I had the privilege to serve on our IGC European subcommittee, so ably chaired by the noble Lord, Lord Tordoff. One of our conclusions was the important task of improving Europe's global competitiveness while at the same time consolidating freedom and democracy by promoting enlargement of the European Union. That will be possible only by seriously studying and reforming the European Community's budget, which has had little mention today.

At this late hour I should like to touch on just a few points in the White Paper. I refer, first, to the roles of the national parliaments and the European Parliament. If we are to serve the best interests of our country, it is vital that we have closer co-operation and respect within the workings of the European Union. I observed from my time in the European Parliament how the members from the other 11 countries, as it was then, worked closely together with their respective national party members. That frequently gave them an advantage over us.

The role of the European Parliament should not be seen as a challenge to national parliaments. It has its own distinctive role. I support the proposal of my noble friend Lord Kingsland to further the possibility of censoring of the Commission by the European Parliament. The European Parliament has a role similar, in a strange way, to your Lordships' House on the legislative side. Perhaps I can quote from an article in the Spectator a few years ago which is an apt description. It stated, Up until the Single European Act, the European Parliament's position in the political process was rather like that of Queen Victoria in the latter part of her reign: scribbling in the margin of bills and arguing with politicians; but in practice neither initiating legislation nor blocking it once Westminster had made up its mind. Now the European Parliament is more like the post-1911 House of Lords, with a combination of blocking and amending powers which make it a real though subsidiary component of the law-making process". On this subject I would like to touch on a point in paragraph 34 of the White Paper. It is true that the European elections have a very low turnout in Britain, usually around 35 per cent. to 40 per cent.—as do many council ones—as compared to 75 per cent. to 80 per cent. for a General Election. The reason, therefore, cannot be, as some say, that Europe is far away and does not affect us". or, as in the White Paper, that the reason for a low turnout is that the European Parliament lacks popular respect and affection. It may well be unpopular at times and not rate very highly in people's affections, but I believe that the real reason for the turnout being so miserably low is that the electorate know that they are not voting for the next Prime Minister and their government. Sadly, both European and council elections are invariably used for protest votes.

In many ways we have failed to get across the message why it is in our best interests to be part of the European Union. Many people feel let down by the failure to produce more jobs and the promised prosperity, as we have heard from several noble Lords in this debate and the previous speaker, the noble Lord, Lord Beaumont of Whitley. We need greater economies of scale not, I believe, by harmonisation, but by mutual recognition. Our future prosperity lies in the competitiveness of the global market. An eminent businessman said recently, Competition is about staying ahead of your colleagues in the business, in an extremely robust and open market place". My honourable friend Ian Taylor, wrote recently, but beware of business super-stars bearing political gifts". I thank my noble friend for the opportunity to discuss this White Paper today. I wish her the best of luck in the future negotiations. I fully support the British approach spelt out so clearly in the following paragraph of the White Paper: We are committed to the success of the European Union, and to playing a positive role in achieving that success. We are confident that it can be achieved if the EU develops as a Union of nations cooperating together under Treaties freely entered into and approved by the national Parliaments of every Member State; a Union that respects cultural and political diversity; which concentrates … only on what needs to be done at a European level;…and which is outward-looking, free trading, democratic and flexible". I hope that the emphasis of the IGC will be on greater simplicity and greater access for everyone to the decision-making process. The final outcome of the IGC will no doubt take many months and is in itself only part of a process. As Disraeli said, Finality is not the language of politics".

9.4 p.m.

Lord Willoughby de Broke

My Lords, when I read the White Paper I was encouraged by the general thrust of the Government's aims, which I believe are well expressed in paragraph 6, "The British Approach". Like my noble friend Lady Rawlings, I would like to quote slightly more fully from that paragraph: The Government is clear about the sort of Europe it believes in … a Union which respects cultural and political diversity; which concentrates single-mindedly only on what needs to be done at a European level and doing it well; which does not interfere where it is not needed; and which is outward-looking, free trading, democratic and flexible". That is indeed the Europe to which we ought to be committed, but it is most certainly not the description of today's Europe—not, at least, one that I recognise.

Europe is at the moment the very opposite of these ideas: it is inward-looking, protectionist, autocratic and inflexible. It is inward-looking because, although it pays lip service to enlargement, in practice it is putting up barriers against helping the new democracies of eastern Europe to come in and join the European Union. There is also a distasteful anti-American flavour to many of the European Union policies. The noble Lord, Lord Kennet, was here a minute ago and he gave voice to those particular feelings. What he neglected to say was that the Americans have, over the past 50 years, pulled Europe's chestnuts out of the fire, and we should not forget that.

Europe is also protectionist in its trade policies. Tariff barriers around fortress Europe mean that these same eastern European countries are unable to export to Europe the products of their competitive industries, while lame duck industries in Europe continue to be subsidised with billions of pounds of taxpayers' money.

It is autocratic and unaccountable because we have given far too much power to unelected bureaucrats of Brussels through the doctrine of the "acquired field". They of course see themselves as the motor of European integration and, like all bureaucrats, they want to enlarge their empires. The motor is not yet quite big enough.

Europe is inflexible because it expects all Europe to proceed at the same pace, with the same currency; the same economic polices and the same social policies. That is wholly unrealistic—

Lord Wallace of Saltaire

My Lords, I am puzzled by what the noble Lord has just said. He made a statement that the European Union is so protectionist against these open and free-trading east Asian countries. Can the noble Lord assure us that the European Union is definitely more protectionist than, for example, Korea or China? That puzzles me.

Lord Willoughby de Broke

My Lords, my diction was unclear. I referred to east European countries and not east Asian countries. As I said, the social and the economic policies are unrealistic in a Europe of 15 member states, let alone in a Europe of 20 or 30 member states. But Europe can be more flexible. I believe that the Schengen Agreement is an example of how Europe can be flexible in arrangements between consenting states, without expecting everybody else to fall into line with it.

Nothing could more clearly illustrate Europe's inflexibility and obsessive dirigisme than the threats made over the weekend to force Britain to join a new and improved version of our old friend the ERM. I though that the ERM was dead and buried, but it turns out that it is only having a rest. There is no mechanism to force us to rejoin the ERM, but the Finance Ministers of Europe and the Commission are busy making our flesh creep with plans for non-EMU states to submit their budgets to Brussels for approval and other various schemes, to reinforce surveillance for those who do not play the game". As far as I can remember, the last time we played that game it cost us about £15 billion. I very much hope that we shall not be joining the party this time.

However, the good news is that under Article 109j of the treaty, which was quoted also by Dr. Tietmeyer of the Deutschesbank this weekend, we have to be a steady member of the ERM for two years to qualify for EMU, and, as my right honourable friend the Chancellor has stated that he has no plans to join the ERM mark 2, if it ever happens, and as we have not been in the ERM mark 1 for three and a half years, it seems to me that we are clearly off the hook of the single currency. I wonder whether my noble friend the Minister will confirm that in her answer.

It is clear that the Government have a struggle on their hands to build the sort of Europe that they wish—and I share their wish for that Europe. Therefore, I strongly support their determination to oppose any extension to qualified majority voting and to retain the national veto. As the single market moves to completion, the number of areas where majority voting will be required should diminish. Unanimity should always be required for any measure which will restrict economic freedom. Europe should be a union of freely co-operating states. No nation should have policies which are unpalatable to it stuffed down its throat.

The Government are absolutely right also to continue with deregulation and to pledge to amend or repeal burdensome and unnecessary directives. It was most encouraging to hear the Statement by my right honourable friend the Foreign Secretary on 12th March in another place that EU directives are not irreversible. Small and medium companies are Britain's biggest job creators. They need a deregulated, competitive single market in which to flourish and to create employment. I am sure that the Government's commitment to those aims will be welcomed by all British businessmen.

The Government are again absolutely right to underline the fact that national parliaments are—not just "should be"—the primary focus of democratic legitimacy in the European Union. I strongly support their proposal to entrench that primary role of national parliaments in the treaty itself. I welcome the proposal to include in the treaty a legally binding minimum period for parliaments to scrutinise Community documents and draft legislation. As my noble friend Lady Elles said, that matter has caused great dissatisfaction in your Lordships' House and in another place and the Government are to be congratulated on this initiative.

Where I find A Partnership of Nations a little disappointing is in other areas such as the paragraph on subsidiarity. Subsidiarity is a slippery concept and, although Ministers have attempted to define it on several occasions, I think it is fair to say that it has not yet been pinned down in a particularly convincing way. Subsidiarity is in itself a federal concept which assumes that power resides at the centre and that the centre will graciously allow its satellites the freedom to act only when and where that centre sees fit. Subsidiarity, as defined in the treaty, has expressly no power over the pernicious doctrine of the acquired field, the Acquis Communautaire, and is therefore effectively an irrelevance. Where are the successors of subsidiarity? I see no successors. If national parliaments are to have the role envisaged for them by the Government in the White Paper, the whole concept of subsidiarity will be superfluous.

It is also disappointing to see that reform of the common fisheries policy is tucked away in paragraph 65. I realise that something has to get into paragraph 65, but smaller items such as citizenship could perhaps be put there. Surely the common fisheries policy, which has been and remains such a disaster for Britain's fishing industry, should have a slightly higher priority in the Government's book. Given the Government's wish to see changes to the CFP, could my noble friend comment on the statements made recently by the EU Fisheries Commissioner on her recent visit to this country? She appeared to indicate that changes to the CFP could be made by national parliaments. If that is the case, treaty changes at the IGC would be unnecessary. That is surely our only hope of changing the common fisheries policy in the way we would wish, because there is no prospect of our partners in the fisheries policy agreeing to changes to something which suits them so well, at least not without unacceptable concessions on our part.

The noble Lord, Lord Taverne, mentioned the beef crisis. The noble Lord is not in his place at the moment, but I have to say that he must be living on a different planet. The beef crisis has not been helped by our partners in Europe; it has been exacerbated by their actions, as was said by the noble Lord, Lord Stoddart of Swindon, and by the noble Lord, Lord Moran, in his excellent speech. Probably illegally, our partners banned our beef worldwide. They banned it in Europe. They banned our exports. They banned anything to do with our beef—all in the name of consumer safety. It now turns out that it was nothing to do with consumer safety at all; it was to protect the European beef market. I hope that he will be brought to book for his lies—and that is what they are, cynical lies—because he has caused untold damage not only to the beef industry in this country, but also to the dairy industry and other contiguous industries. I look forward to participating in our debate on that on Wednesday.

The Government should go to the IGC with the recognition that they have a strong hand to play. We are, after all, the second biggest contributor to the European budget—although not the second richest nation, however that is measured. As the noble Viscount, Lord Tonypandy, clearly pointed out, our trade balance with Europe is in very large structural deficit, amounting to well over £100 billion over 20 years, and £16.5 billion in the last year alone.

Our consumers also heavily subsidise the iniquities of the common agricultural policy. Our fish stocks form a disproportionate amount of common fisheries policy resources. Almost invariably, we are the most significant contributor to any European peace-keeping force. I thought that all of this would entitle us to be called very good Europeans. Therefore, I hope that the Government will not allow themselves to be typecast as the awkward member or the odd man out, as the noble Lord, Lord Richard, would have it. Like the noble Lords, Lord Chalfont and Lord Bruce of Donington, I believe that to be a good European does not mean agreeing to every proposal that comes out of Brussels or Bonn, or that the United Kingdom should be stopped from putting forward its own constructive proposals. Being alone does not mean being wrong.

Euro-enthusiasts habitually threaten Britain with the tired images of missed buses, trains, ships, planes—even M. Delors' bicycle. Buses, planes, trains and ships have a habit of either not starting or arriving at the wrong place. If the Euro-bicycle goes wobbling off in the wrong direction, I sincerely hope that we will not be on it.

9.15 p.m.

Lord Monson

My Lords, I happened to spot a report in today's Independent to the effect that in about half an hour from now the former president of the Bundesbank, Herr Karl-Otto Pöhl, would tell the "Panorama" audience on BBC1 that the European Union was a post-war concept, now out of date. In the light of that bombshell from a highly respected German financier, anything that I say tonight is bound to seem more unimportant than usual.

The noble Baroness, Lady Chalker, in her opening speech reminded us that the Intergovernmental Conference was always meant to be a tidying-up exercise, not an occasion for major treaty revisions, however much some governments might yearn for the latter. The United Kingdom, therefore, has every legal and moral right to say quietly but firmly, "No, no, no", to other more interventionist-minded governments. Of course, for reasons of realpolitik the United Kingdom Government may, now and again, decide to succumb to blandishments from other governments, but they should never forget their moral and legal right to stand firm if they believe it right and proper to do so—as I am sure they will.

Paragraph 12 of the White Paper worries about other countries seeking to impose an unacceptable (from our point of view) integrationist agenda. The answer to this concern is surely that they may be able to impose such an agenda, but what they cannot impose is an integrationist outcome as long as we have the veto and are prepared to use it. It is most reassuring that in paragraph 27 Her Majesty's Government declare that they will oppose further extension of qualified majority voting. The noble Lord, Lord Taverne, among others, mentioned qualified majority voting, which he favoured in many circumstances. His noble colleague, the noble Lord, Lord Jenkins of Hillhead (who I am sorry is not here today), often points out that an extension of QMV is a prerequisite for any significant reform of the common agricultural policy. That is perfectly true, but such extension of QMV would not be enough to ensure that any such reform actually took place.

It is often forgotten that the CAP is quite popular on the continent of Europe, not least because there the idea that food must at all costs be cheap is not one that is widely subscribed to. Significant reform would hurt most producers and almost certainly lead to rioting and possibly even civil strife in Mediterranean and Latin countries. (Of course, the two are not quite synonymous.) For that reason, the so-called Nordic countries and the Commission are always reluctant in practice to put too much pressure on Latin and Mediterranean countries, even though under the treaties technically and theoretically they have the power to do so. Realistically, significant CAP reform is likely to be an extremely long, drawn-out business. This will cause considerable problems for eastern European countries which aspire to membership. The more one considers their position, the more one tends to agree with the Adam Smith Institute that they would be far better off in a customs union with the EU, ideally coupled with some kind of defence pact, at any rate for a few more years. The removal or drastic scaling down of tariff barriers which keep out their coal, iron and steel, textiles and other manufactured products, as well as their agricultural produce, would enormously help the position of those countries.

It is not a question of keeping eastern European countries at arm's length from us—far from it. I cannot agree with the noble Lord, Lord Beaumont of Whitley, that Poland and the Czech Republic are culturally more distant from us than, for example, Spain and modern Greece—Mozart, after all, spent a good deal of his life in Prague and composed some of his best works there. It is just that if those countries join the EU in its present form they may end up as sour and disillusioned as most of the people in Austria, Denmark, and Sweden.

I shall digress briefly from the issue of QMV for a moment to reply to a point made by my noble friend Lord Bridges, who I am sorry to see is not in his place. He urged us to be more positive about the EU and, like the psalmist, invited us to lift up our eyes unto the hills, from whence cometh our help. As far as concerns our BSE difficulties, we have lifted our eyes up unto the Vosges, the Harz mountains, the Apennines, the Sierra Nevada and the Austrian Alps, totally in vain.

To return to QMV, there is one set of circumstances in which a modest extension of QMV might, with advantage, be contemplated: as a trade-off for the rolling back of the powers of the incipient superstate—the partial dismantling of the acquis communautaire so that the EU would no longer have any competence in purely domestic matters with no cross-border implications.

The admirable paragraphs 5, 6, 20 and 54 of the White Paper show that Her Majesty's Government well understand that the ordinary people of Europe (as opposed to some of their rulers) do not want further integration, interference or harmonisation. If it seems that we feel that more strongly than the continentals, it is because we, in general, feel obliged to obey regulations and directives, whereas many other nationalities just ignore them. If time permitted, I could give many concrete examples of that.

Only by giving everyone more breathing space; only by preventing governments in one country from interfering (albeit by proxy) in the domestic affairs of people in other countries (poking noses into the "nooks and crannies of their everyday lives", to quote Mr. Douglas Hurd) will we have any chance of achieving that, ever closer union among the peoples of Europe", to which the Treaty of Rome rightly aspires.

9.22 p.m.

Lord Elibank

My Lords, I have, as have many Members of the House and people outside, three main preoccupations with our relations with Europe. As time gets on, and we are coming towards the end of the debate, I shall try to be as brief as possible. My main preoccupation is the gap between the leaders and the led. That has always been so up to a point—men of vision founded initially the Iron and Steel Federation, and then moved on towards their concept of Europe. The man in the street, I think—I cast back to my youth to try to remember what I thought at the time—went along with that as a noble ideal but one having perhaps little practical impact on his way of life.

As we have gone on through the decades, the spotlight of the media has been turned forcefully on Europe, and in most cases, I think, rather unfavourably. The second thing that has happened is that the man in the street is coming to realise that he will personally be affected by decisions taken in Europe. That means that he is hesitating; that means that while the leaders wish to press on, and do press on, the man in the street, not just in the UK but throughout most of Europe, is drawing back from a concept which has not been sufficiently explained to him.

The danger here is that the leaders will push that advance of Europe faster than the electorate can tolerate it. That could easily lead to the break-up of the Union. I do not disagree with the objectives of many of the leaders on the Continent for some sort of a federal union. However, I believe that by hastening the pace of change, as we are attempting to do, the whole future of the Union is placed in jeopardy. It is a grand concept and will not suffer by a delay of a decade or two in bringing it to fruition.

My second preoccupation relates to the lack of competitiveness of Europe. We appear to spend a great deal of time looking at each other; for instance, we may be 2 per cent. better than the French, 3 per cent. worse than the Germans and 5 per cent. better than the Italians, whether we are looking at the gross national product, rates of exchange, the bank rate or whatever. We do not look sufficiently outside Europe. The threat to Europe's prosperity will come not from competition within but from competition without.

We are rightly told that the next century will see the rise of India and China as economic superstates. I am often surprised to learn how many British firms employ Indian programers, systems analysts and so forth to write their programs. Obviously the cost of transmission is slight and the cost of labour is much lower than in this country. However, it is significant that in India and in Bangladesh there are citizens who are of sufficiently high calibre of education to be able to handle the work at least equally as well as anyone in this country. That is a foretaste of what the future may hold when the full weight of economic competition from those Far Eastern countries hits Europe some time in the next century.

My third preoccupation, which is most widely shared, relates to unemployment within Europe. Today hardly a politician speaks without mentioning unemployment, as though some magic measure could be introduced within Europe to lower it. I am no economist but it seems to me that the only cure for unemployment—and it is a temporary cure—is a boom within the country in question or perhaps within the continent. But booms come to an end and any extra employment which results is also likely to come to an end.

People talk about vast infrastructure projects; indeed, the Commission has an ambitious series of projects for trans-European roads and railways. That too would provide some employment, but, unfortunately, most engineering projects rely heavily on machines rather than on men. When the projects finish the employment finishes too.

Stress is often put on improving the standard of education of the workforce. That is a noble ideal as regards the individual, but if there are no jobs to be done, having a highly educated workforce will not solve any of one's problems. One could argue, at least in theory, that the more highly educated the workforce the fewer people are needed to conduct any particular piece of business.

Therefore, in Europe, as in this country, we turn to the conventional answer—the possibility of improving employment rests with the small and medium-sized enterprises. There is well-proven evidence that that is a successful route. At a time when the major companies are cutting labour, the SMEs can provide an opportunity for further and better employment. It is extremely important that they should not be overburdened by unnecessary taxation and bureaucracy. They must be given reasonable facilities for taking on and discharging labour.

I should like to mention one or two what I would call constitutional points. One of those is the presidency of the European Union. That rotates every six months. When there were five or six countries in the Union, that was a reasonably manageable arrangement. Now that there are 15, it is a very poor arrangement. When the numbers in the Union climb to more than 20, it will become farcical.

Some fairly bizarre solutions have been put forward, but I believe that the only solution is the appointment of a permanent president for a fixed term of years. We all know that any permanent appointee as the head of an international organisation arouses a good deal of excitement and much negotiation. But in the end a man is appointed, whether as head of the United Nations, of NATO or of the European Commission. That seems to me a step which we should take as soon as possible.

There has been a certain amount of discussion in the House about qualified majority voting. If one looks at it the other way round, that is the right of veto. I cannot see how we can proceed much longer in the Union with a minority of one—which often is this country, but it does not have to be—obstructing the clear policies of the other 14. To the extent that the Government seek to resist qualified majority voting, I believe that they will be dragged kicking and struggling along as the right of veto is slowly eroded. It is much better to go along with whatever the majority feels at a particular time is the increasing limitation of veto rights.

The last point that I mention is the European Parliament. I suppose that that is the centre of democracy within the European Union—the one really democratic institution for which one should feel total support. I can say only from the limited dealings that I have had with its output that it seems to be more concerned with preserving and extending its own rights than with arguing the merits of any particular proposition. That is no argument for restricting its powers, but it is an argument for giving it no greater powers than it has already in the next few years. It needs time to get its own organisation right and in order. Until that is done, the powers that it has at present are more than adequate.

In general, I support the posture of the Government that, apart from making arrangements for the new entrants, the conference is an opportunity for consolidation and certainly not for dramatic change.

9.34 p.m.

Lord Belhaven and Stenton

My Lords, as I am at the bottom of the list of speakers, I do not intend to delay your Lordships for very long. Since the Maastricht Treaty, we have had the European Union. First, we became used to the EEC. We then became used to the EC. Now, it is the EU. For all the reassurances of my noble friend Lady Chalker, if words mean anything, we are already in a federal union. It has its own flag, its own parliament and its own law-making body.

Sitting in your Lordships' House, of late it has struck me, particularly at Question Time, that time and again the Minister agrees with the questioner but is powerless to do more than to promise to argue the matter with the Commission or the Council of Ministers. Therefore, having divested ourselves of our empire, we are now surrendering our power to manage our own affairs, which is our sovereignty.

In the little that I intend to say, I do not wish it thought that I am anti-French, anti-German or anti any nation in Europe. Indeed, I have many friends there and I enjoy visiting France, Italy and so on. But I just do not want to be a member of a European super state and go along with them and their body politic.

I should like to draw your Lordships' attention for the moment to our principal partners in the European Union. First, France has had nine constitutions since 1789 and is now in deep crisis—postponed but not solved—because the government cannot enforce the necessary measures to reduce expenditure on the public sector and restore the economy. Indeed, France may be on the edge of another revolution, another constitution, and her rulers are desperately looking around for a solution which they imagine lies in closer ties with the European Union.

To digress a little, I think that something might be done with respect to the specific French menace to our wine merchants and tobacconists. In my opinion, it ought not to be possible to take a day trip to Calais and return laden with wine and tobacco. I know that we all enjoy that sort of thing; but, unfortunately, our wine merchants and tobacconists do not. Indeed, I am very sorry for them because they are losing a fortune in trade. I would just like to know: is this the single European market?

I turn now to Germany. From reports that I have read, I gather that Germany is on the edge of a serious recession as a backlash for the cost of reunification. Italy has had three constitutions since the Risorgimento and has just had to cobble together another to try to bring a halt to the corruption which is deep seated and endemic in her body politic. Well, I wish them luck.

Spain, which is the other leading partner, has been sliding into corruption during the long Gonzalez premiership. The new government, which lacks a parliamentary majority, will probably be unable to halt the process. I shall not mention Austria, the low countries or the other members of the EC, including the unhappy new boy, Sweden, which are mostly relatively stable; and the less said about Greece, the better!

As has already been mentioned, since 1066, and until the Maastricht Treaty, England has had a continuous monarchical regime broken only by the 11 years of the Commonwealth in the 17th century. Scotland has had a continuous regime for even longer. Until Maastricht we had stability. We had a constitution and a rule of law—our own law—which was the wonder of the world. We had, and still have to some extent, close relations with the United States and with our former empire.

When we went to war in 1939, the whole Commonwealth, including the independent dominions, declared war on the same day. When we had the Falklands crisis, who came to our assistance? It was not Europe; it was the United States which supported us. In the present crisis in our beef industry all of our European partners immediately, and without heeding any of our arguments, imposed an embargo upon us. They were able to impose a world-wide embargo which shows the astonishing degree to which we have given up our independence. These are our so called partners and that is their solidarity! I believe that they are doing this deliberately as it is in their interest to destroy our agricultural industry so that we may buy more of their exports. I believe that many of them fancy that Mr. Blair will be more compliant than Mr. Major—though I personally have my doubts—and that they plan to bring him down as M. Delors said that he had brought down Mrs. Thatcher.

I was going to conclude that it is time for the British lion to roar, but we have heard it quoted already by the noble Viscount, Lord Tonypandy. I agreed with every word he said in what was by any standards a great speech.

We have been talking about enlargement. I have contacts in Poland and in my opinion the wish of Poland and other countries to join the European Community is not based on economics at all. They want to join the Community to secure their frontiers against Russia. If they join NATO, the drive inside those countries to join the European Community will slow down considerably because they have already had experience of Comecon and they do not want to experience something similar from the west.

9.40 p.m.

Lord Wallace of Saltaire

My Lords, this has been a long debate and many points have been made. No doubt this will not be the last debate on this subject. I have been in this House for a short time. I listened, in the week before I was introduced, to the debate on the IGC report, and I have made a number of contributions over the past few months. I welcomed the Minister's comments at Question Time this afternoon that the Government will keep us well informed as we go forward. This is, after all, a matter of Britain's long-term fundamental national interest and therefore we need to continue to debate it actively.

I congratulate the Minister on the quality of the White Paper and on its production. I found it extraordinary that the Government were so reluctant to produce one. The civil servants who have done much of the work on this document have performed an extremely useful task in spelling out the Government's position and have also supplied some beautiful maps. The recognition of the importance of public education and of carrying the public with one as one negotiates is something which failed to be recognised during the previous intergovernmental conference. Whichever party may be in power, it is important that the Government carry the public with them. I welcome in particular the firm statements in the first few paragraphs of the document. The noble Baroness repeated those statements when she opened the debate this afternoon. Paragraph 1 states: The United Kingdom's role as a leading member of the European Union is vital to our national interest". Paragraph 3 states: the European Union is the basis upon which we must consolidate democracy and prosperity across the whole of Europe … Enlargement is at once an historic responsibility for Europe and a long-term British interest". I must also congratulate the noble Baroness on the rather more weasel phrases tucked in towards the end of the document where the Government state that they may have further proposals to put forward, and that they will have positive proposals to make on a whole range of issues on which it is not yet politic—or indeed not always yet decided—to state what they may wish to do.

That reminded me of an occasion last summer when I happened to hear Peter Mandelson addressing a group of rather bemused French businessmen in Oxford. He assured them that by the time of the next election the Labour Party would have a European policy. I was rather puzzled to note that there were so few speeches from those on the Labour Benches today. This is, after all, an extremely important matter. We heard a worthwhile contribution from the noble Lord, Lord Richard, and no doubt we shall have another one shortly from the noble Baroness, Lady Blackstone. However, I was surprised that, apart from the noble Lord, Lord Kennet, only the noble Lords, Lord Bruce of Donington and Lord Stoddart of Swindon, felt this subject to be of sufficient importance for them to speak on it.

What we have heard this afternoon yet again is—as the noble and learned Lord, Lord Howe of Aberavon, said—that there is a cross-party consensus on a reasoned approach to European integration based on an intelligent assessment of Britain's long-term interests. He did not need to add that against this there is a cross-party coalition of opponents—of defenders of the British Union against the European Union; proponents of English nationalism against European co-operation. That is a divide which cuts across both major parties and cuts deep into the Government, and even deep into the Cabinet. It remains the case that a clear majority in Parliament in both Houses, and within the British public, when informed, favours closer co-operation with Europe. The 1975 referendum demonstrated that, as I am confident would any other referendum. The only part of the politics of this country in which there is a clear majority against closer integration in Europe is in the newspaper industry, which is largely under foreign ownership. The impossibility of the Government either providing a clear lead to a confused public or of intelligently pursuing British interests in negotiations with other European states comes from being stuck in the middle of this divide and from the sad failure of the Government from the top to clarify where Britain's long-term interests lie.

The denial of symbolic commitment to Europe, the insistence that Europe is only about practical things—cool commitments—whereas emotion is for the transatlantic relationship, with bargaining only for Europe, is part of what is wrong. I have always been struck by the difference between British Prime Ministers going to Germany to visit our troops there. We recall the noble Baroness, Lady Thatcher, riding in a tank with our boys, happy to demonstrate that there were British troops in Germany; and the frequent occasions on which President Mitterrand would go to Germany, always standing alongside Chancellor Kohl to review troops together, symbolising that this was part of a common European commitment.

One of the many oddities of British foreign policy, and indeed of British defence policy, is that a third of the British Army and a third of the British Air Force have been in Germany for the past 50 years. Nevertheless, we have remained apart from the rhetoric of a European commitment. The zero sum style of presentation with which the British Government have so often fallen down, in which we win and others lose and in which it is game, set and match to us, is part of what has been wrong. I remember Carlos Westendorp, the Spanish European Minister, saying, with clear reference to the British after a European meeting in Madrid, that the Spanish interpretation of national interests was one in which the interests of others had also to be taken into account.

The British, therefore, should be aware that our commitments in Europe need to be negotiated with others. The illusion that somehow we in Britain can dictate to everyone else in Europe what has to be done because we are right and the others are wrong is part of the post-imperial mythology which we have to overcome.

The political argument has moved sadly little since 1956, except that the ambitions of the opponents have become steadily smaller. We have just heard the constitutional arguments re-presented by the noble Lord, Lord Belhaven: that it is the sovereignty of Westminster which has to be defended; and the superiority of English liberties and English common law; or the impossibility of distributing power within the British constitution. As the noble Lord, Lord Bowness, made clear, there is a direct link between the debate about the British constitution and the debate about our future arrangements within Europe. Those of us who divide on this issue form a cross-party coalition against another cross-party coalition. Some of us thought that we lived in a multinational state which is itself a partnership of nations—I say this to the noble Viscount, Lord Tonypandy, as the son of a Scot—not in a single unitary state threatened by some alternative state in Europe. If we are willing to think about changes in constitutional arrangements within Britain, we can also think rather more openly about changes in constitutional arrangements with our continental partners.

However, the biggest single issue that has come out in the debate is clearly as regards Germany and France. We have to face that openly. Last year I re-read the Eyre Crowe Memorandum of 1907 about the underlying interests of British foreign policy. They were Germany and France. Eyre Crowe states clearly that once Germany was united, it became the overwhelming preoccupation of British foreign policy; and the balance between Britain, France and Germany had to be the main preoccupation of British foreign policy. It is odd to me that that is so easily denied by many people in the current foreign policy debate. John Maynard Keynes, in his first book in 1919, said much the same thing: that if we were to re-establish a stable and prosperous Europe after the First World War, it had to be built around a stable and prosperous Germany. Unfortunately, he failed to persuade the Prime Minister, Lloyd George, of the case.

Last year I was involved in a Dutch Government inquiry into the future of Dutch foreign policy. Unlike the British, the Dutch have the odd habit of inviting foreigners to take part in government inquiries: one German, two French, two British. The starting point for some of the Dutch was: "You don't have to ask whether or not you like the Germans; you do have to live with them. So there is no point in discussing what you think of the Germans; let's now talk about European co-operation on a reasonable basis". The saddest part of that Dutch report for me was the conclusion that there was nothing constructive to be done with Britain and, frankly, the only thing for the Netherlands to do was to go ahead in partnership with France and Germany, hoping that the British would eventually bump along behind.

I have to say to the noble Lord, Lord Beloff, that the picture of him the year before I was born in the Home Guard, guarding Britain, was inspiring. However, two-thirds of the population of Germany were born after 1945; two-thirds of the population of Britain were born after 1945. Unless we take clearly a position of racial guilt that the sons and grandsons to the second and third generation must bear the guilt of their parents, we must recognise that we are dealing with a different Germany in a different Europe.

Then there is the "anywhere but Europe" party, represented on this occasion by the noble Viscount, Lord Tonypandy, but by others on other occasions. They seem to prefer China to France as a partner or Japan to Germany or Singapore to Denmark. I recall the noble Lord, Lord Tebbit, some years ago suggesting that the proper relationship between Britain and the continent of Europe was comparable with that between Hong Kong and the mainland of China. I am not sure that he would still wish to draw that comparison, but I sometimes believe that what people are asking for is a relationship comparable with that between the Channel Islands and Britain or the Isle of Man and Britain: a nice, comfortable, off-shore base without any influence or ambitions.

Then there is the myth that we were never told—and the noble Lord, Lord Pearson of Rannoch, mentioned it—that somehow we were taken into a free trade area or that the 1975 referendum did not present the issues. As it happened, I was actively engaged in the 1975 referendum and wrote a paper for the Royal Institute of International Affairs. It sold about 25,000 copies and, as I recall, it set out many of the issues relatively clearly. I was pleased to take part in debates later in which opponents attempted to quote paragraphs from it against me and I was happy to be able to quote the rest of the paragraphs to them. I have also been reading the debates in the Labour and the Conservative Parties in 1960–61. The issues were set out quite clearly. Everyone recognised that there were political choices to be made and it was precisely why we found it so difficult. We understood what we were doing.

Lord Stoddart of Swindon

My Lords, will the noble Lord allow me to intervene? I too was engaged in the 1975 referendum and read what was put out by the then government. They supported our continued membership. One of the specific paragraphs stated that there was a danger that economic and monetary union would be imposed on this country which would cause a great deal of unemployment. The then government said that they had negotiated that out. Would the noble Lord like to comment?

Lord Wallace of Saltaire

My Lords, the noble Lord himself was a member of the Labour Party at the time and will be more familiar with the interstices of the Labour Party's different positions taken during the referendum debate. Economic and monetary union was already on the agenda in 1975. The question of how we built closer European union was clearly there. The British Government supported the establishment of the McDougall committee that year to discuss the idea of fiscal federalism within the European Community. Those issues were very clearly and publicly on the agenda.

The economic context has changed amazingly. Perhaps I may quote the noble Lord, Lord Stoddart. He talked about our great British industries now threatened by the Continent—by which I assume he means the Great Western rail works in Swindon. The world has changed rather a lot since the early 1960s. I drive a British-made car. It was made by Peugeot in the old Rootes works in Coventry. Alternatively, I could drive a Land Rover, now owned by Bayerische MotorWerk, of what the noble Lord, Lord Bruce of Donington, might care to call the heartland of Hitler and his henchmen. We accept that. Incidentally, the British defence industry now largely relies upon co-operative projects with foreign vehicle manufacturers for the procurement on which it now wishes to go to war. The idea that we are not already caught up in a process of economic and defence integration is clearly absurd.

In terms of integration I was even happier to read in the newspapers last week that my rail journey to the House of Lords in future will be organised by a French company that is about to buy Network South-Central. Those who are concerned about sovereignty might perhaps like to pay some attention to how much sovereignty Britain has effectively been giving away through the process of economic integration in which British companies have been taking over companies in other countries but in turn they have been expanding into Britain. That includes, I have to say to the noble Viscount, Lord Tonypandy, the City of London. Over the past few years I have worked as an academic with Morgan Grenfell. That means Deutschebank and it has involved my going to Frankfurt. We know that the future of the City of London relies very heavily on being a major European banking centre in which a larger and larger number of banks in the City of London will themselves be European or global operators.

Many points have been mentioned during the course of the debate. Let me briefly summarise two or three more, and then pass on to the noble Baroness, Lady Blackstone. We are engaged, as the Minister said in opening, in a series of negotiations that will take place over the next 10 to 15 years. Enlargement will not happen tomorrow. The earliest we may begin to welcome the first new members will be 2001 to 2002. Time will already begin to shift the way the European Union operates. The common agricultural policy is already changing shape in the process of reform which follows the Uruguay round. The budgetary negotiations in 1999 will, as the Minister said, change the balance of the Community budget. It will take a further 10 years in transition periods for new members to come into the European Union. We are not therefore dealing with a static process. We are, however, dealing with a fundamental process in which we are attempting to build a new European order. That requires some very, very substantial shifts in British assumptions, as well as in the assumptions of our partners.

If the Government intend to push the idea of subsidiarity, they must at least recognise that subsidiarity is in itself a federal term. If we are to look for a Community that is doing less, but doing it better, we shall have to define rather more consistently what we want the Community to do. We shall perhaps even have to say to some of our largest private lobbies that the idea that the British should tell everyone else what to do about their zoos, their animal welfare and how they treat their animals in transit elsewhere in the Community is something for which one cannot consistently argue if at the same time we wish them not to tell us what to do in different ways.

In relation to the third pillar, there are a large number of issues on which the current Home Secretary and the Home Office are blocking useful and constructive approaches to further European co-operation in important areas which matter a great deal to Britain. I refer in particular to the European Convention, but there are others as well.

The question of a flexible Europe, a multi-tiered Europe, is, however, the most important. It would clearly be a disaster for Britain's long-term interests comparable to that which took place between 1956 and 1958 to allow Britain to be shut out of a core Europe. The issue is Britain's relations with Germany.

I regret very much that we did not make the same attempt at reconciliation with Germany in the 1950s as the French successfully made. I hope that the future British Government will begin again to make that reconciliation within a larger Europe in which Poland, the Czech Republic, Hungary and elsewhere will also become full partners. I look forward to discussing that with the Minister and others throughout the next 18 months and perhaps beyond.

10 p.m.

Baroness Blackstone

My Lords, I begin by congratulating the two maiden speakers on their excellent speeches. Let me say how much we on these Benches look forward to hearing from them again.

This has been an interesting debate, though one, I am afraid, in which some of the speeches have had little to do with the IGC. They have been more of an ideological diatribe against our membership of the European Union. The noble Lord, Lord Elis-Thomas, wondered whether he was living in the same country as his neighbour the noble Viscount, Lord Tonypandy. In listening to some of the speeches, I wondered whether I live in the same century as some of those who made them.

The debate has also been revealing yet again, as the noble Lord, Lord Wallace of Saltaire, said, in exposing the divisions in the party opposite, divisions that we see daily manifested in the media. When the Tories lose a by-election with a swing of 22 per cent. against them, we hear on the radio Eurosceptic Members of Parliament from the Conservative side telling us that a tougher line on Europe would win them more votes, only to be contradicted by other Tory MPs claiming the reverse. The problem is that this Government have now lost the support of the British people. Their deep divisions on Europe serve only to reinforce the strong sense of a government in terminal decline now helped by the electorate.

The noble Lord, Lord Cockfield, wanted to address many of his remarks to the White Paper rather than to what the Minister had said. For exactly the same reasons, I shall do the same. The White Paper's approach to the IGC lacked not just any vision but any sense of direction. That was a view conveyed by the noble Lord, Lord Bridges, and others earlier in the debate. In fact, there is only one clearly positive proposal in the White Paper; namely, a proposal to incorporate the principle of animal welfare in the treaty. The Labour Party has no problems with that, though I suspect that it may be a cause of concern to Mr. Portillo—or perhaps I am being a little unfair. Has the Secretary of State for Defence decided to demonstrate his love for animals and make a concession on the extension of European powers on this matter?

But what about people? What about the 18 million unemployed in Europe? What about the many people in Britain who are in jobs but who live in fear of losing them? The Minister made it clear that the Government oppose any extension of Community competence over employment and, as we know, they will not give up their opt-out on the Social Chapter. Perhaps the Minister would like to comment on the fact that all our partners want an end to that opt-out and there are now growing signs that the major players in the European Union—the French and the Germans—will demand that the opt-out is terminated as a condition of remaining in the single market.

Perhaps I should make it clear that, if the Labour Party is elected, it will ratify the Social Chapter and in so doing bring the social protocol into the main text of the treaty. As the Minister indicated earlier, we favour the Swedish Government's approach of a new Title on employment. Unlike the Government, we believe in close collaboration with our European partners to try to achieve high employment rather than believing that we should merely compete with them. The fate of millions of jobless people in this country hangs on improved collaboration in both macro-economic policies and in such matters as infrastructure projects, which I can assure the noble Lord, Lord Elibank, do create jobs. Yet the Government believe that it is a matter on which they are not competent to act within a European framework. I can only say that what the Minister said earlier represents what seems to me to be a lack of understanding of the nature of the problem and even some indifference to the damage that it inflicts on the economy, on society and on individual members of society.

Not only does the Government's approach to the IGC lack vision, it also betrays a pathetic attempt to try to please both their Europhile and Europhobe wings at the same time. It ends up, as usually happens in those situations, by doing neither. The White Paper begins by declaring forthrightly that, The European Union … is more than a free trade area. [It is] the basis upon which we must consolidate democracy and prosperity across the whole of Europe". Even general platitudes of that sort, with which any rational person ought to be able to agree, get the Government into trouble with sections of their Back Benches, evoking from the Member of Parliament for Southend the comment that it is "Foreign Office Euro-nonsense". The Government therefore try to get out of the mess they are in by sticking as close as they can to the status quo, hoping that by doing so they will offend the least possible number of people on their side.

But of course there would be no point in holding an IGC if all they are going to do is stick to the status quo. Moreover, all our partners in the European Union are clear that the IGC must agree a substantial number of changes, if only to allow for enlargement, which the Minister told us earlier the Government support. Indeed, as she clearly admitted, the European Union must adapt its structures to allow for enlargement, yet both the White Paper and some of what she said seem to evade the central issues.

Many speakers in the debate referred to QMV. Apparently the Government oppose any further extension of QMV and want to maintain unanimity in all those areas to which it currently applies. I say "apparently" because of the Prime Minister's equivocation—to which my noble friend Lord Richard referred—during the discussion on the Statement on the Turin Summit. Perhaps the Minister can clarify exactly what the Prime Minister meant.

As other speakers have said, no other European Union government support the UK Government's formal position. In response to the noble Lord, Lord Chalfont, most other governments recognise that without a substantial extension of QMV the decision-making of the European Union will seize up. Perhaps that is what some noble Lords on the Eurosceptic side of the debate want.

Unlike the Government, which will be isolated on the matter and therefore in danger of losing the argument where it counts, the Labour Party supports the extension of QMV to most areas of social, regional, industrial and environmental policy to which it does not already apply. There are also areas of the single market and various administrative and appointment procedures to which it can be extended. On the other hand, we oppose wide-scale extension to CFSP and JHA areas.

Again in response to the noble Lord, Lord Chalfont, is it not more likely that other members of the EU would make concessions to a British Government which are willing to see some extension of QMV rather than one which dig in their heels and refuse to embrace any change whatever? That was a point to which the noble and learned Lord, Lord Howe, referred in his speech.

The Minister referred to the re-weighting of votes. We support the Government in wishing to see their weighting in favour of large states. However, I am a little confused as to what the Government have in mind here. Although the issue was extensively discussed in the Reflection Group, I have not seen or heard any indication of exactly how votes would be re-weighted or what the threshold would be for the qualified majority. Again, perhaps the Minister can throw some light on that.

A number of speakers referred to the European Parliament. Some, including my noble friend Lord Stoddart, have demonstrated their dislike of it by totally opposing any extension of its powers. But, in emphasising the importance of national parliaments—I would certainly want to emphasise their importance—it is not necessary to reject any extension of European powers in certain areas. I agree with what my noble friend Lord Bruce of Donington said earlier. There should be a strengthening of the scrutiny role on which the Government are also insisting, though we are a little puzzled on this side of the House as to why the Government so far have done so little to respond to proposals from the Delegated Powers Scrutiny Committee for improvement.

There are some inaccurate and very unfair criticisms of the European Parliament made in the White Paper, and in particular the negative comments made about co-decision are inaccurate. Most objective commentators and most governments believe that they are working rather well. Perhaps I may make it clear that the Labour Party supports co-decision in all areas which are subject to QMV in the Council. We also believe it right that the European Parliament's power to require the Commission to initiate legislation should be extended. Surely, Members of your Lordships' House who want to see openness and democracy in the European Community, will regret the isolation of the UK Government on these questions.

Some speakers have made reference to foreign policy and European security. One of the silliest comments in the White Paper is that the co-ordination of foreign policy has progressed well. I believe that only someone on another planet without a view of earth, could make a remark like that after the débâcle over the former Yugoslavia. I believe that the noble Lord, Lord Chalfont, rightly condemned decision-making failures in this regard.

I cannot believe that the Minister, who has a lot of experience in these matters, would want to endorse the White Paper's claim that, decision-making has not been a major problem". Perhaps she will tell us later. It is not consistent with the Government's support for various changes to strengthen the CFSP and how it operates. While the Labour Party support the Government on the need for unanimity for major decisions in this area, surely there ought to be some flexibility on consequential decisions and greater use of the existing possibility of moving to QMV on joint actions.

As the Minister stated, NATO must remain the central force in European defence and on this we can agree with the Government. There should be no duplication and at present an EU competence on defence would only lead to duplication and consequential confusion. However, if, as the Government claim, European defence co-operation is desirable, closer working with the WEU is essential. Given that the Minister accepted that, as indeed we do, I wonder whether the Government's proposals for the development of the WEU are on the cautious side.

I turn now to the European Court of Justice on which the noble Lord, Lord Lester, focused, but which has featured in this debate rather less than I had anticipated. Once again, we see the Government trying to do the proverbial tightrope act. The Minister wants a strong, independent Court, yet the Government keep looking for ways for limiting its jurisdiction. For example, it wants member states to be liable only if there is a serious and manifest breach of their obligations.

I ask the Minister why any breach which is found to be unlawful should not lead to liability on the part of the member state? If governments fail to implement treaty obligations or directives which they have adopted, surely action should be taken. Since we are always complaining that we are so much more rigorous in the UK in implementing treaty obligations and directives than some of our partners, is it not in our interests to ensure that the Court of Justice has appropriate powers to deal with breaches, even minor breaches?

I cannot end without saying something about the legislative process. Let me start by saying that we support what the Minister and others have said about extending subsidiarity into the treaty although, like the noble Lords, Lord Bowness and Lord McNally, we would prefer to see reference to regional and local government as well as to national government.

However, we cannot agree that the European Court should be asked to give its views on the legal basis of legislation prior to its approval. That could seriously compromise its position later and misunderstands the need for separation of powers; nor do we think much of our sunset Government's odd proposals for sunset clauses. Except for those with an agreed time limit, such as emergency powers, no national legislature operates in the way proposed, so why should the European Union? It would seriously undermine the legitimacy of the law if everyone thought that it might expire in a few years' time.

In conclusion, as many others have said during the course of the debate, the Government's whole approach to the IGC is flawed. It is flawed because it reflects the problems of the Conservative Party rather than Britain's future in Europe. The Government's means of escape from the rift within the Tory Party is "variable geometry"; but as the noble Lord, Lord Ezra, mentioned, they want variable geometry without a two-tier Europe. Unfortunately, that aspiration seems unlikely to be attained, as the noble Lord, Lord Ezra, suggested in his reference to different drawers, allowing a permanently differentiated Europe in which Britain and perhaps some other states opt out of certain policy areas. That will inevitably lead to two tiers. It will undermine the Union in creating incoherence, serious economic imbalance and, I suspect, unfortunate political tension on a long-term basis. Is that what we really want?

As my noble friend Lord Richard said at the outset of the debate, can it come as a surprise to anyone that the other member states of Europe find it increasingly difficult to work with the British Government and that they look forward to the general election? The sooner the better, so that we are there in time to make a more positive contribution to the IGC than we have seen so far.

Lord Graham of Edmonton

Now, answer that!

10.18 p.m.

Baroness Chalker of Wallasey

My Lords, it gives me great pleasure to seek to answer the noble Lord who is normally so silent on the Opposition Benches.

I begin by welcoming back to our European debates my noble friend Lord Cockfield. We certainly missed him in previous debates. He showed that having had a little time out, he was just as punchy as ever. It is good to see him back.

I welcome particularly the two maiden speeches of my two new noble friends. My noble friend Lady Wilcox was humorous yet factual, refreshing yet serious, clear yet concise. I shall never again eat a langoustine without thinking of my noble friend.

My noble friend Lord Bowness has special experience of the Committee of the Regions. I look forward to hearing more from him and I shall answer his points a little later. My noble friend's long and distinguished service in local government will be very valuable to your Lordships' House. We are delighted that he has joined us.

It is great to have such welcome contributions from my two new noble friends. But it was also good to listen to all the other contributions—even if, to be honest, some were a little lengthy. I shall answer as many questions in the debate as I reasonably can. As usual, I shall write to those of your Lordships whom I cannot answer tonight.

I was delighted to hear the speech of the noble Baroness, Lady Blackstone. After her noble friend the Leader of the Opposition had spoken tonight I was no clearer about Labour policy. Then I listened to all of the Labour Back Benchers who spoke—all three of them—and realised that they had a problem. Not a single Labour Back Bencher spoke up in support of his Front Bench. But at least tonight we have ended on a positive note. The noble Baroness did her best to present once again a united, user-friendly Labour policy and put something behind the spin, which we have received in recent weeks, as part of what the Labour Party would sell to unsuspecting British voters. I will deal with some of the individual points in a moment. I am glad that it is a lady who has beaten the spin doctor, because it is not summer yet and already there seems to be a bit of European policy about.

My noble and learned friend Lord Howe of Aberavon spoke of the need for a reasoned consensus for developing Europe. We have to take a practical, positive view which is so often masked by negative comments from a few that could almost be dangerous in achieving a positive approach for the future. A few moments ago when listening to the noble Lord, Lord Wallace of Saltaire, I thought that there must be a lot that we could do together to advance the kind of Europe that we all want. We all have to work a lot harder to sort out what is wrong in many of the comments that have been made. I say this in a spirit of sadness rather than anything else. I admit to your Lordships that I was shocked and dismayed tonight by the vehemence of some of the anti-European and anti-German speeches in this Chamber. In life, we do not always like our relatives let alone our neighbours, but those who care about reasonable relations find it sensible to make an effort to overcome the difficulties, differences and even the prejudices. This month I have achieved 35 years' experience of dealing with Germans, from my time as a student, as a businesswoman and now in politics. I do not like every German whom I meet. I certainly do not agree with every German I meet. Nor do I agree with every Brit, Frenchman, Italian, Russian or American. Therefore, I hope that we can put anti-nationality behind us and argue about the issues. We live in an interdependent world and a geographically close Europe. We are bound to have differences about issues. Let them remain differences about issues.

Lord Stoddart of Swindon

My Lords—

Baroness Chalker of Wallasey

My Lords, at this hour of the night I hope the noble Lord will forgive me if I say that he has intervened on a number of occasions throughout the day. In a final wind-up, it is extremely difficult, after 27 Back Bench speeches, to make a concise speech so that your Lordships may go home. If we start to have interventions we will continue to have interventions. I gave a personal opinion which I know from corridor discussions during the debate is shared by many Members of your Lordships' House.

The noble Lord, Lord Richard, in his opening, made much comment on Britain's alleged isolation and loss of negotiating influence as a result. I hope that we can put the loose rhetoric to one side and look at the facts. As the noble Lord, Lord Ezra, has said, the most important single achievement of the European Union in recent years is the single market. I do not see that as evidence of the loss of British negotiating influence or British isolation. Nor is the embedding of subsidiarity; nor is enlargement. This is not an agenda which the UK is being forced reluctantly to accept; it is an agenda that we are setting.

The noble Lord, Lord Richard, mentioned three specific areas where we are, as he thought, isolated: first, the ECJ. I take it that he has not read the French Prime Minister's recent remarks. Perhaps I may quote: As for the ECJ, it has to be admitted that it is becoming little by little a sort of European Supreme Court". He then went on: To avoid such an outcome, the IGC should examine the issue". It is clear from other speeches from Alain Juppé that the French, just as much as we do, intend not merely to examine but to resolve that issue.

Secondly, the noble Lord, Lord Richard, talked about an extension of QMV. We need to look at it issue by issue. If one does, one sees that there are few, if any, individual areas where Britain would be isolated in imposing QMV. Thirdly, on EMU, if the noble Lord is criticising our policy on the EMU, he will need to tell us how he would change it. I do not know whether he or his party would renounce or opt-out, but that is one question to which we have not had an answer. Of course it is true that the UK has had to stand for its national interests, sometimes alone. I make no apology for that. Other member states do just the same, but that has not reduced our influence; rather the opposite has occurred. It has encouraged others to think about and come forward either in support or with their own views.

The noble Lord, Lord Bridges, is not here. I wish to refer back to the excellent debate we had on 12th December as a result of the Select Committee's report on the IGC. It is said that I should have spoken about it earlier, but the fact that it is covered in my wind-up speech shows no disrespect to the noble Lords who did such a fine job with that report.

In that debate I said that the IGC would not be about major treaty reform, but should be seen in the context of real change, prosperity, security, enlargement and popular support. I argued that the IGC should confine itself to what it could do to meet those challenges. That is the view which has come forward in the White Paper which was praised by my noble friends Lord Skidelsky, Lady Rawlings, Lady Elles and many others.

It is easy, during a period when we are examining the detail of treaties, to become over introspective. The detail is essential information. No one would deny that. It is right that governments, and parliamentarians if they wish, should go through them with a fine toothed comb. We shall continue to do that relentlessly throughout the IGC. However it is also important to put the detail in context; always to bear in mind the wider issues that are at stake, and what it means to us to belong to the EU.

The White Paper seeks to do that. It pulls together the ideas by asserting that the European Community, subsequently the European Union, has been a means of safeguarding stability in Europe and generating economic prosperity in which the UK has shared. My noble friend Lord Elibank was right when he said that the threat to Europe's prosperity was not from within Europe, but was coming from many miles away through the link with modern telecommunications.

I know from all the OECD and other statistics that I have read that the total overall economic advantage is significant. British trade with Europe has risen almost twice as fast as our trade with the rest of the world. We have been a major target of investment—a total stock of £120 billion. Only the United States has attracted more. I give as an example a £260 million investment in Lanarkshire by Chunghwa, a Taiwanese electronic giant, which will create 3,300 new jobs. The European Union has been crucial in helping to liberalise the trade.

Yes, the 1993 GATT world trade deal is most important, but it could not have succeeded if the countries of Europe had not worked and spoken together for that. The White Paper sets out that the European Union is not just about free trade and economic advantages; it is about combining forces to strengthen the European global voice in many areas. It is about working together to fight international crime and about fighting together to raise environmental standards. Vitally, it is about consolidating democracy and prosperity and maintaining long lasting peace.

Enlargement is an historic responsibility in this respect and healing the divisions which scarred our continent through the cold war. Drawing on the combined political weight of the European Union's members to help some political crises elsewhere is also a key responsibility and a key interest. I noted what was said by the noble Baroness, Lady Blackstone, about the co-ordination of foreign policy.

Perhaps I may take an issue which is rather more distant than the current difficulty. At the time of the explosion at Chernobyl 10 years ago I was asked by our then Foreign Secretary, my noble and learned friend Lord Howe of Aberavon, to take the meetings. The difficulty in coming to a decision was not because of an unwillingness to reach a conclusion together but because of the varied information—the sheer difficulty of knitting together the information in a meaningful way so that a mutually agreed purpose could be achieved. Over the years we have become better at that and because of my longevity I can stand here and say that. However, we still need to have a better system of working together and I believe that that has to happen through the co-ordination of foreign policy. It certainly would not happen if there were to be any imposition of an action. The action must be agreed by all the member states before it can succeed.

Our aim is that the principles of working together in the Union should apply not just in the present Union but in time across the wider Europe. Clearly, it is in the long-term interests of the United Kingdom to have a strong democratic and confident Europe of nation states which co-operate to achieve common prosperity and to resolve the problems which occur in life.

The noble Baroness, Lady Blackstone, also spoke about tackling unemployment. I agree that it is the greatest challenge facing Europe, but if she believes that adopting the Social Chapter will be the answer, I have news for her. In the UK we have combined two objectives—of creating sustainable economic growth and achieving high levels of job creation. We are now entering the fourth year of economic recovery. Underlying inflation is down to 2.5 per cent. Unemployment is still too large at 2.2 million, but it is down by more than 0.75 million since December 1992. It is now at its lowest level in five years. The proportion of the working age population in employment in the UK at 68 per cent. is higher than for other major European Union countries. We have increased our output faster than our European neighbours and our real average income in the UK increased by more than one-third between 1979 and 1992–93. The UK's flexible labour markets have helped those vulnerable to unemployment. Youth unemployment in the UK is almost half that of France and well below the EU average. Our social security expenditure has grown about 4 per cent. a year in real terms since 1979. Therefore it is not a case of not trying to help in training and other ways those who have not yet been fortunate enough to find jobs.

However, the point I make to the noble Baroness about the Social Chapter is that we drew the line at that at Maastricht because we believed it was wrong for Britain and very unhelpful for Europe as a whole. We know that there are others within the European family who agree with us, but so far they have not come along with a solution better than the existing Social Chapter. I believe that they may, because it is of grave concern in every European country.

I turn now to enlargement, about which my noble friend Lady Wilcox and many other noble Lords spoke. Of course we want to continue the push to have the security and prosperity that we enjoy enjoyed by other countries eastwards and southwards around Europe. Enlarging the European Union will bring major benefits. But we must ensure that that enlargement is successful and sustainable. That is why we shall work to create the right conditions for that by calling for policy reform, particularly of the CAP and the structural funds.

The Commission's opinions on the central European applicants will be issued as soon as possible after the IGC, and those will form the basis for the European Union to decide which applicants should begin negotiations first and when that should be. But, for the moment, we encourage all applicants to continue the preparatory work in advance of membership, raising their economic and administrative standards in the process. I suspect that the negotiations with some of the central European applicants will coincide with the start of negotiations with Cyprus and Malta, as was expressed at Madrid in December 1995. That will be some six months after the IGC.

Many other questions have been asked, in particular about qualified majority voting. The noble Lords, Lord Richard and Lord Ezra, claimed that the Government's line has been inconsistent in relation to QMV. I assure them that that is not so. We do not regard QMV, specifically and properly applied, as bad. It operates already in the treaty where it is needed; for example, for the CAP and the single market. But there is no convincing case for extending it further. My right honourable friend the Prime Minister said: I do not anticipate significant extension of qualified majority voting, and it is possible that there will be no single extension at all. We are not seeking to accept any. What may turn up in negotiations lies ahead; at present, we do not intend to accept any extension of QMV whatever". One cannot foresee all that will happen in the negotiations but we believe firmly that there is unlikely to be any reason for feeling it necessary to have an extension of QMV.

The noble Lords, Lord Ezra and Lord Bridges, my noble and learned friend Lord Howe and my noble friend Lord Kingsland all talked about flexibility in Europe. We back a flexible Europe but, as noble Lords have said, it must be the right kind of flexibility. We do not want an à la carte Europe and it is quite clear that there are many areas such as the single market and external trade policy where conformity is right. Nor do we or our partners want a hard core. But in our view it is perfectly healthy to have different institutional arrangements for different policy areas and for groups of member states to advance more quickly in some areas than others, provided that, once such arrangements are agreed, they are agreed by all and open to all. Trying to force 15 member states, let alone 20 or 25, into the same mould will, without doubt, crack the mould. That is why we must have that flexibility.

This evening we heard a number of comments about variable geometry—that flexibility. Diversity is not a weakness to be suppressed; it is a strength to be harnessed. I have just spent four days on a management course learning about how to harness diversity in the interests of a common aim. I believe that it is a real mistake to seek conformity for conformity's sake. There may be areas in which it is possible to integrate more closely than in others. The Government certainly believe that the creation of flexible structures within the European Union must be subject to two basic criteria. First, such policies should become Union policies and draw on the Community's institutions, including the budget, only where that is agreed by all member states. In addition, no member state should be excluded from an area of policy in which it wishes to participate and is qualified to do so. That is a reiteration that policies must be open to all member states. In that way we avoid falling into the trap of creating that hard core. We spent some 40 years working to reduce divisions in Europe. It would be an extremely bad idea to reintroduce them.

My noble friend Lord Pearson of Rannoch asked me more than 10 questions. I shall write to him where they have factual answers and I shall try to explain all the many things that he has been told over many months. However, I should like to reply to one of his questions here and now; namely, that on subsidiarity. The number of proposals for primary legislation are continuing to fall. There were 61 in 1990, 52 in 1991, 51 in 1992, 48 in 1993, 38 in 1994 and 25 in 1995. The Commission proposes only 19 new legislative proposals for the whole of 1996, so we are now at a third of the figure that we were at in 1990. My noble friend has at least received one answer this evening to one of his many questions.

The noble Lords, Lord Richard and Lord Stoddart, talked about the Turin conclusions. Indeed, both noble Lords said that they were a federalist agenda, but I believe that they need to read them very much more closely. The Turin conclusions do no more than list the issues for consideration at the IGC. In no instance do they prejudge the decisions that the IGC will take by unanimity among heads of government.

I believe that I should say a few words about the communiqué which emerged from Turin because there is a degree of confusion among noble Lords on the point. As I said, the conclusions represent an agenda. They do not prescribe a determined outcome in any specific area. It is a totally non-prejudicial menu of issues. Our priorities, which I mentioned when opening the debate—examining the functioning of the ECJ, the role of national parliaments, subsidiarity and improving competitiveness—are some of the examples reflected in the document, as indeed are those of other member states. We will not be signing up to all of them; nor will all member states do so. But it is important that we get a good agenda from which to work and gradually discard those which are obviously not going to work.

A number of speakers were concerned about the issue of information, with which we dealt at Question Time earlier today. Perhaps I may simply say that the European Parliament's role in the IGC is nothing like as threatening as was suggested in an earlier speech made, I believe, by the noble Lord, Lord Bruce of Donington. At Turin, in common with France, we successfully resisted pressure for the European Parliament to participate in the Intergovernmental Conference. The IGC is intergovernmental and it will remain so. But if you do not at least communicate with and listen to what is being said, you get into the sort of difficulty that many countries had after the Maastricht IGC. I believe that to communicate with national parliaments and with the European Parliament will actually allow us to avoid some of the awful problems that we had after 1992. We certainly do not believe that the European Parliament needs new powers, just as my noble friend Lord Elibank said; nor, indeed, do the French and several other nations.

I should like to say a few words on the Committee of the Regions to my noble friend Lord Bowness. The committee plays a valuable role in European legislation, but it is a new body and it needs time to bed down before we can consider some of the suggestions that the COR has made. This IGC is really too soon for it. I believe that it will have to wait for a later stage in the development of Europe.

Several comments have been made about BSE. Perhaps I may simply say that the remarks we heard this weekend from Commissioner Fischler underline the fact that the ban is disproportionate and should be lifted as soon as possible. We shall continue to discuss with the Commission and other member states the lifting of the ban on British beef. However, your Lordships will be debating that issue later this week.

We have had a long debate and it is late. Indeed, I am informed that it is late enough for me to finish. However, I should just like to make a final point about the ECJ and about defence. A number of noble Lords raised the subject of the European Court of Justice. I would say to the noble Lord, Lord Stoddart, and to the noble Viscount, Lord Tonypandy, that it is not possible to have a single market without the ECJ. It is not possible to have its economic benefits without a common body of law evenly enforced in all member states. Those who argue for the emasculation of the Court would throw out the baby with the bath water. I shall write in detail to the noble Lord, Lord Lester of Herne Hill, about his points because I know he knows they concern not just my department but also a number of others.

I would say to the noble Lord, Lord Chalfont, that we fully agree with him that there must be European/Atlantic co-operation in defence matters. We also believe—as the noble Baroness, Lady Blackstone, emphasised that she believed—that NATO has to be at the centre of European defence. I believe that European countries can do more to support NATO as the bedrock of security on our continent. We should build up the Western European Union for this purpose, but we shall oppose proposals designed to give the European Union a defence dimension for which it is not qualified, and for which it will not be qualified.

I thank all those who have participated in this debate. I have tried to be constructive and realistic. We are making positive proposals. We are listening to our partners, listening to Parliament at Westminster, and listening to business and all the other aspects of British life; but this IGC is an important part of our agenda both at home and in Europe. I hope that in our future debates noble Lords will understand why we must grasp this IGC chance to introduce practical reforms as well as ensure that the European Union remains the servant of its members and not a threat to their independence.

On Question, Motion agreed to.

House adjourned at thirteen minutes before eleven o'clock.