HL Deb 28 July 1997 vol 582 cc11-73

3.4 p.m.

The Lord Privy Seal (Lord Richard)

My Lords, I beg to move the Motion standing in my name on the Order Paper.

The House will know that, when in Opposition, I welcomed the opportunity to hold these debates on important European events. Now that we are in government I can assure your Lordships that I have lost none of my enthusiasm. I look forward to today's timely debate confident that it will be, as always, an enjoyable and stimulating occasion, particularly as we are to hear the maiden speech of the noble Lord, Lord Howell of Guildford. He knows a great deal about this topic and I am sure he will be extremely helpful in what he has to say.

Let me first step back a little and look at the genesis of the Amsterdam Treaty. It is the third in a series of treaties in recent years which have developed the EEC, then the EC, later the EU.

First, the single European Act laid the basis for the internal market. That involved a substantial extension of competence for the European Community, and a good deal of qualified majority voting. Then came Maastricht, which further extended Community competence and majority voting, set the foundations for economic and monetary union, created the European Union itself, and included co-operation in foreign and security policy and justice and home affairs in the treaties for the first time. The Maastricht Treaty contained the provision—Article N, second paragraph—which committed the member states to a further review of the treaties in 1996.

In fact, the process of reforming the treaties began over two years ago. In 1995 the member states set up a so-called Reflection Group to prepare the way for the full intergovernmental conference. The IGC itself duly began in Turin in March last year, and the process of negotiation dragged on for two full years. The process was marked by the clearly high ambitions for radical change to the structures of the European Union which emanated from some quarters inside the Union itself. The outcome is much more modest and much more sensible.

Let me recall the Government's aims for this negotiation, as set out by my right honourable friend the Prime Minister on 18th June. They were: to protect our essential interests over immigration, foreign policy, defence and a central role for Britain in Europe; to promote changes of real interest to the British people; and to move Europe on to a new positive agenda". We also undertook to bring a fresh and constructive approach to Europe and to these negotiations. This we have done, and it is precisely because of that approach that we were able to deliver on these objectives.

In our brief exchange on these topics in the House last month, it became clear to me that there was a certain amount of confusion on the Benches opposite as to what the Amsterdam Treaty does and does not do. Let me try to help.

The treaty does, for the first time, give the United Kingdom clear and unequivocal legal security for our border controls. For us this was a considerable achievement. The treaty does introduce a new chapter on visa, asylum and immigration policy in the European Community pillar of the Union. We have succeeded in doing that in a way which preserves full autonomy for the UK over our own policies in these fields, and in a way compatible with the aspirations of our partners.

The treaty does not change the current intergovernmental nature of co-operation in areas such as the fight against crime and drugs. It does not remove the unanimity rule. And it does not give the European Court of Justice authority to decide on cases brought in UK courts in those areas. The treaty does, however, include a new employment chapter.

I recall that some concern was expressed last month that Europe was returning to what was described as an old-fashioned, corporatist approach. To make it quite clear, the treaty, at UK insistence, states that the Community's employment policy would focus in particular on, promoting a skilled, trained and adaptable workforce and labour markets responsive to economic change". The conclusions to the Amsterdam Council reaffirm the importance attached by the European Council to the promotion of, a skilled and adaptable workforce and flexible labour markets responsive to economic change". Finding a job and keeping a job is a priority for Europe's citizens. It is right that the treaty should recognise that.

The Amsterdam Treaty incorporates the social chapter, bringing to an end the UK's damaging opt-out. But the treaty does not extend qualified majority voting in the social chapter. We are confident of the Government's ability to negotiate successfully in Europe to ensure that any new legislation in the social field is compatible both with the establishment of sensitive common standards for working conditions and with economic effectiveness.

The treaty does address issues which matter to people. It introduces a new commitment to open decision-making and a public right of access to the documents of the institutions. I am sure this will be widely welcomed. It introduces new powers to combat fraud and waste by allowing the Council to take action by qualified majority to prevent and fight fraud against the Community budget and by strengthening the powers of the Court of Auditors to investigate the use of Community funds.

The principle of subsidiarity—ensuring that decisions are taken at the European level only when they provide real added value—is strengthened by the treaty. For the first time these procedures can be enforced by the European Court of Justice.

The treaty does introduce a new provision to allay any fears which the Maastricht Treaty may have raised—indeed, I heard them expressed in this House quite often when the treaty was going through—that Union citizenship might subsume national citizenship and erode national identities. The treaty makes clear that, citizenship of the Community shall complement and not replace national citizenship". Moving on, the treaty also includes a sensible extension of qualified majority voting. The extension is perhaps less significant than in the Single European Act and certainly less extensive than at Maastricht. But nonetheless the changes are valuable. They allow the Community to push through measures to combat fraud, as I have already mentioned, against what could be a recalcitrant minority; they allow majority voting to improve transparency, so that we can overcome unwelcome resistance towards making European Union business more open; and qualified majority voting in research will allow us to avoid negotiations which are in the UK's interests from being held up by one or two member states. So, overall, it is a small, useful, but limited extension.

The common foreign and security policy will remain intergovernmental, with key foreign policy decisions taken by unanimity. Qualified majority voting for implementation decisions will make that common foreign and security policy more effective. The treaty provides that any member state will be able to veto any such decision which it judges contrary to important national interests. The treaty also introduces a number of practical improvements to make common foreign and security policy more effective and credible. By way of example, these include the appointment of a High Representative to assist with the preparation and implementation of agreed policies under the direction of the Council itself.

On defence, also, we achieved an outcome which both protects our national interests and will improve European effectiveness. The UK has retained its veto over all decisions with defence implications. We also secured explicit recognition written into the treaty for the first time that NATO is the foundation of our and other allies' common defence.

Last month the noble Viscount the Leader of the Opposition asked whether the treaty spoke of "the objective" of integration of the Western European Union into the European Union. The Amsterdam Treaty does not do so. It refers to the "the possibility" of WEU integration into the Union, should the European Council so decide". The theoretical possibility of EU and WEU merger has always existed. What is now made explicit in the treaty is that any such merger proposal requires a European Council decision by unanimity, and that any such decision would be recommended to member states for adoption, in accordance with their respective constitutional requirements". Here, and in most member states, this would mean approval by national Parliaments. We wish to see closer co-operation between the EU and WEU in European crisis management, but working together efficiently as separate organisations. At Amsterdam we successfully achieved a framework which will achieve this.

The Amsterdam Treaty also introduces new flexibility provisions to allow closer co-operation between groups of member states though under tightly defined circumstances. Again we have succeeded in fully protecting UK interests: there are safeguards which protect the single market and the interests of non-participants. It is made explicit that this new provision should be open to any member state which is willing and able to participate in an example of flexible co-operation. We have retained the veto in the form of an emergency brake mechanism, if I may use that phrase, which allows us to prevent a vote from even being taken if important national policy interests are at stake. It remains to be seen how much the new provisions will be used in practice. But in the terms agreed at Amsterdam they are entirely satisfactory, and represent a sensible accommodation between member states with different circumstances and aspirations.

The Amsterdam Treaty did not, unfortunately, reach agreement on reform of the European Commission or on reform of the voting system. That was a disappointing outcome for us. The Council was close to agreement, and perhaps with a little more time the deadlock might have been broken. But it was not to be. We did, however, secure a commitment in the treaty to press ahead with these reforms before enlargement takes place. The Commission President, M. Santer, has recently called for an early resolution of these outstanding issues. The United Kingdom welcomes this and stands ready to look actively for a solution.

Some commentators have argued that the Amsterdam Treaty has failed to prepare the Union for enlargement and has even put the process in danger. Events since the Council have shown that this is just wrong. The concern now, rightly, is for the future, for the debate has already moved on since Amsterdam. The Commission's Agenda 2000 proposals, produced right on time two weeks ago, open a new chapter in the history of the European Union. We have moved on to a new agenda based on the twin aims of enlargement and policy reform—key components in the new European agenda which the United Kingdom wants to advance.

Enlargement is a central objective for the United Kingdom and the European Union. We must grasp this historic opportunity to enhance security and prosperity throughout Europe. We welcome the Commission's clear recommendations on the candidates' readiness for membership. We should start negotiations with applicants who are ready. The Government look forward to agreement at Luxembourg later this year on opening negotiations during our United Kingdom presidency in the first half of 1998.

We also welcome the Commission's proposal that the budget should remain capped at 1.27 per cent. of Community GNP. In our view this should provide adequate funds for an effective Union. CAP reform is a top priority if enlargement is to be made affordable and successful. Reform makes sound economic sense: we want a competitive and viable European agriculture, friendly to the consumer, the producer and the environment. We acknowledge that the Commission's ideas will bring real benefits to consumers. But the United Kingdom will push hard for a still more radical strategy. At the same time we must see a reform of the structural and cohesion funds. As a Commissioner who was once responsible for one of the structural funds, the next sentence of my brief, which says that they must be made simpler, more effective and better targeted as well as taking account of future enlargement, I endorse wholeheartedly.

These negotiations will of course be taking place in the context of developments on economic and monetary union. The Government's position on this is well known and EMU was not a major topic at Amsterdam. Suffice it to report that the Council approved regulations on the stability pact, on the legal framework for the euro and on voluntary arrangements for relations between EU currencies of EMU participants and non-participants. It also approved the design of euro coins. My right honourable friend the Prime Minister made it clear that if EMU is to succeed, it must be based on sustainable convergence.

At Amsterdam this Government delivered where we said we would deliver. The Amsterdam Treaty is not the radical document which some of our partners wanted. But it is a good result for the United Kingdom and a good result for Europe. The result is workmanlike rather than theoretical; pragmatic, perhaps, rather than visionary. As such, it represents a sensible and important result to a long negotiating process. It points the European Union in the direction of enlargement. We believe that it helps to make it more fitted for that enlargement and for the challenges which undoubtedly lie ahead.

Moved, That this House take note of the conclusions of the Amsterdam European Council in June.—(Lord Richard.)

3.20 p.m.

Viscount Cranborne

My Lords, may I say at the outset how much I am looking forward to the maiden speech of my noble friend Lord Howell whose expertise in these matters will add greatly to the quality and depth of our debates. May I also say how grateful I am to the Government in general and to the Lord Privy Seal in particular, for arranging this important debate. The European Union and the United Kingdom are, after all, becoming increasingly entwined. Although the Lord Privy Seal suggested in his remarks—and I believe I quote him accurately—that this treaty is sensible and modest (he may well be right in that), I cannot help feeling that any examination of the provisions of the treaty must drive one to the conclusion that the Treaty of Amsterdam represents a substantial further step towards European integration rather than the 5,000 mile service we had been promised. That not only worries those who want a Europe of nations, but sucks countries potentially into policies with which they may disagree and from which they may not be able to disentangle themselves.

Since what for me are the sad events of 1st May, I have twice drawn your Lordships' attention to my feelings about those who characterise my party as a party of Little Englanders. I have sought to show—I fear to closed ears—that the risk does not lie in that danger. but rather that it lies in the possibility, perhaps even the probability, that the path the European Union is taking will lead to all of us becoming ensnared in a union of Little Europeans, reacting defensively to an increasingly competitive outside world. For the instinctive reaction of those challenged by fast-moving forces, whether economic, cultural or, in a completely different sphere, military, is all too often self-protection. It is, if you like, a Maginot mentality. It is not a reaction that historically has been crowned with great success.

We know that in today's global economy the Maginot mentality works less well than ever. In various pronouncements since the election the Foreign Secretary has described today's global economy and its nature accurately and elegantly. As I have made clear to your Lordships before, I agree with his analysis. In the global market capital moves swiftly and is not much impeded by frontiers any more. Free traders now win in a world, much of whose growth comes from rapidly developing information-based technologies. Competitiveness has always been the secret of economic success, but today we gain it or lose it more swiftly than ever before. Flexibility is therefore as important a key as ever it was.

As I say, the Government's rhetoric has recognised this fact of life, and we learn from the President of the Board of Trade that she is doing something about that. She is setting up a task force to advise on the matter. I hope that the Government will forgive me if I am a little sceptical about her solution. It smacks of two things increasingly typical of the Government: another review and a corporatist approach redolent of the 1970s, which is something the noble Lord the Lord Privy Seal anticipated that I would say and I would not wish to disappoint him. Clearly, the Government still believe that it is governments and not business that create jobs.

It also seems to be deeply in tune with the spirit of Amsterdam, or much of it. If ever western Europe is to compete with the rest of the world, it will certainly need to continue to develop the single market, the great and lasting achievement of my noble friend Lord Cockfield. However, as important as the fact of the single market is its nature. It may establish a level playing field. but will that playing field be built so high that to conform to it we will all have to breathe air so thin that we will find it difficult to compete with other countries respiring at a lower level?

To any dispassionate observer I would contend that we in Europe are in danger of just that. Just to take one example: the increases in QMV in the Amsterdam Treaty cover, as the Lord Privy Seal pointed out, areas such as the social chapter, the employment chapter, public health and research matters. In fact, the veto has also disappeared from a number of other areas to which, with your Lordships' permission, I will return shortly.

Our views are well known on the effects of such measures. They will ensure that less competitive member states use them to hold back more competitive partners on the grounds of unfairness. After all, the battleground is well-chosen. No one is against health, safety, employment or research—even me. The European convoy will thus be restricted to the slowest ship and never mind if other non-European convoys overtake us. The message seems to be that at least we will all fall behind together. At least there will be an equality of misery in Europe: little wealth creation and virtually no job creation. It reminds me very much of previous Labour governments' solutions by the back door.

Again, I must be fair to the Government. The Prime Minister has shown in the past that the prospect of what could be added to the provisions of the social chapter could harm our competitiveness. I ventured to remind the House the last time we discussed these matters that the Prime Minister himself admitted before the election that some of these areas subject to QMV in the social chapter would not be helpful to us in terms of job creation. The Lord Privy Seal, through lack of time, was unable to answer a question I put to him about this. However, with his usual courtesy, he gave me a very full answer to a letter I subsequently wrote to him.

Your Lordships may recall that I pointed out that the Government could not pick and choose which of the provisions of the social chapter, which were subject to QMV, we implemented; and that therefore the only way we could pick and choose—which seemed to be what the Prime Minister wanted to do—was to maintain our opt-out and pass those provisions with which the Government agreed through the British Parliament in parallel.

I was therefore interested in finding out how the Government proposed to pick and choose, as the Prime Minister promised, when the Government implemented their pledge to sign the social chapter. In his letter the noble Lord replied as follows: … we have made it clear that we will retain the veto in areas such as social security and co-determination in the boardroom which are vital to competitiveness. Even where decisions are by QMV, it is our intention to ensure that issues of employability and competitiveness are taken into account by participating fully in negotiations on any future proposals for social legislation". I believe that means that the Government will rely on their diplomatic skill and the goodwill of our partners to secure the pick-and-choose policies that we want. I yield to no one in my admiration for the diplomatic skills of the Foreign and Commonwealth Office. However, in view of the aspirations of those who wish to add substantially to the existing provisions of the social chapter, reliance on these two weapons hardly seems, with the greatest respect to the Lord Privy Seal, to be an adequate response.

What has actually happened is one of two things, but I am not sure which. Either the Prime Minister has entered the bear pit of European negotiations, where quite rightly all member states negotiate to obtain maximum national advantage and, I am afraid, has been "rolled over", as the saying goes; or he has changed his mind and now wants to accept all the provisions of the social chapter, but fears to admit it.

Much the same seems to apply to the rest of the draft treaty and any peripheral discussions at the IGC. In spite of much huffing and puffing the Government brought back nothing on quota hopping, for instance. During the election the Labour Party agreed with us that we could only address quota hopping by changing the European treaties. But what have we got? Well, we have something concrete—we have a letter from the Commission confirming this country's right to issue licences requiring a proportion of fish to be landed here. I have to ask: what is new in that? That does not change the existing situation one jot or one tittle. It is a right which is, in any case, almost impossible to enforce.

Moving on rapidly to cover the Government's obvious embarrassment, perhaps even more worrying are the number of concessions that the Government have made in political areas which, at the very least, bring into question their commitment to a Europe of nations and which bring a united federated states of Europe much more clearly into view. No wonder the Liberals are so happy to take a first step towards merging with the Labour Party; the Prime Minister is beginning to realise their fondest ambitions even before that delightful arranged marriage has been consummated.

Let us consider a sample of what the treaty provides in this respect. It gives new powers of veto to the European Parliament in 23 new areas by extending co-decision-making. The European Parliament will therefore in those areas henceforward be able to veto measures agreed by the Council of Ministers, including, on employment, incentive measures; on social policy, equal opportunities; public health; transport policy; the social chapter and the environment. Despite what the Lord Privy Seal said, I wonder how much subsidiarity there is in practice here; there is certainly plenty of opportunity for European institutions to undermine the power of European nation states—and we can be sure that in future treaties there will be more to come.

And then there is the curious case of the "human rights" clause. The treaty allows the member states to rule by majority that a member state is guilty of "serious and persistent" violations of human rights. Once a member state is found guilty, the other member states may by QMV suspend its voting rights. It does not take a very great leap of the imagination to understand how easily this provision will be abused. The Minister without Portfolio must be envious and no doubt, since imitation is the sincerest form of flattery, it is only a matter of time before the Labour Party's awkward squad finds itself being disciplined under a similar set of rules.

There are other forums where nations which abuse human rights can be, and are, called to account. I contend that there can be no justification for requiring a country to be bound by decisions taken in its absence.

The treaty under justice and home affairs is hardly much more encouraging. None of the last government's proposals for reform of the ECJ, for instance curtailing the effects of retrospective decision taking, seem to have been addressed. Indeed, when I asked the Lord Privy Seal about the failure to press this important point at Amsterdam, he replied, with his usual courtesy, that the idea, met with minimal support in the Conference. We decided in this context not to pursue it". That is a somewhat less-than-robust approach to negotiation and rather flies in the face of the assurances which the Lord Privy Seal gave us a moment ago. I must ask where the UK budget rebate—or our opt-out from the single currency—would be if a previous government, faced with "minimal support" had decided not to pursue them. I fear that we can be less than satisfied with that reply, no matter how courteous.

The treaty gives a new role to the ECJ, which is: jurisdiction to give parliamentary ruling on the validity and interpretation of framework decisions". That in itself sounds like a considerable extension of the ECJ's power.

Nonetheless, we must be generous. The only success that the Labour Government can realistically claim related to immigration, asylum and visas—and, my goodness, they certainly claimed a very great deal of credit for that. I am, of course, happy to welcome that success which means that we still have an opt-out from the new title that brings these matters under the jurisdiction of the Commission and the ECJ. I hope that that opt-out proves to be permanent. If I express doubts it is because the Labour Party stated in October 1995 (in a document entitled The Future of the European Union): We reject permanent opt-out or 'variable geometry'". It would be a pity indeed if it did not prove permanent since the Government would be throwing away yet another negotiating success of the last government. Indeed, we negotiated that success in March 1997, but if the Labour Government wish to claim credit for it, I am in a generous frame of mind and I am happy to allow them to do so.

Nowhere do my doubts about the treaty and the Government's claim for their negotiating performance surface more strongly than in the sections on defence and security policy. Let me confine myself to two matters only.

In general, the treaty encourages moves towards a European foreign policy based on more majority decision-making, with QMV extended to two new decision-making procedures: "Joint Actions Common Positions" and "Common Strategy". Now a member state can reject the adoption of any decision by QMV for important and stated reasons of national policy". Also, it introduces a new term "constructive abstention" (which I believe was a French invention) meaning that a country may opt out of CFSP decisions, but allows other states to go ahead. At the very least, this means a move away from common decision-making and any action would still be made in the name of the EU.

But there is more, and I wonder if, when the Minister comes to reply, he could help me on this point. Article J.13 states: When abstaining in a vote any member … shall not be obliged to apply the decision, but shall accept that the decision commits the Union … The member state concerned shall refrain from any action likely to conflict with or impede Union action based on that decision". If the member state concerned felt strongly that such an action was against its national interests, it might not wish to comply with that last undertaking. It therefore sounds as though the EU under the treaty could prevent a member state acting in its own interests. Could the Minister tell us whether he agrees with that interpretation and, if he does, why the Government signed a treaty containing such a provision, and, if he does not, could he tell us what that provision does mean?

The second point on the CFSP is under the head of defence. The Lord Privy Seal kindly addressed himself to this and I am grateful for what he said about the veto. However, perhaps I may explore this a little further, albeit briefly. For the first time a new aspiration is included in the treaty at Article J.7, which states: The union shall accordingly foster closer institutional relations with the WEU with a view to the possibility of the integration of the WEU into the Union". The Lord Privy Seal said in this House on 18th June—he repeated it again today: We see the role of the WEU in the future as it has been in the past. We do not see a defence role for the European Union".—[Official Report, 18/6/97; col. 1253.] I am extremely grateful for that and for the fact that the Government have maintained the previous position. However, I wonder whether the Lord Privy Seal sees any inconsistency between his reply and Article J.7. If the spirit of the treaty is to be observed it is difficult to argue that a government who signed it did not envisage the possibility of such integration. How will the Government stick to the sentiments of the Lord Privy Seal's reply (and his sentiments expressed today) when confronted with such an aspiration which they have signed up to in the treaty?

I have attempted to pick out a number of examples from the treaty which seem to me to show that this treaty is anything but the 5,000 mile service it was advertised as. It seems to bear little relationship to the negotiating triumph the Prime Minister felt it to be on his return from Amsterdam. In his Statement to Parliament, he said—the Lord Privy Seal repeated these sentiments today: We have proved to the people of Britain that we can get a better deal by being constructive".—[Official Report, Commons, 18/7/97; col. 316.] There are some areas in this treaty with which we agree, notably the enlargement aspirations and the structural and cohesion funds, to which the Lord Privy Seal helpfully referred, but we have seen a substantial increase in the powers of European initiatives at the expense of individual nation states so that it will be increasingly difficult for a nation to opt out if it disagrees with the chances of success of a European policy. The one that I mind about most is the biggest economic problem confronting the European Union at the moment, which is unemployment.

The Government clearly intend to foist this substantial change on the British people without consulting them. I find it curious when we have a government who are wedded to the cause of referendums that they should deny us the opportunity to vote on a question which seems on closer examination. and despite their denials, to be rather more important for all of us than the election of a mayor for Greater London, whatever the aspirations of my noble friend Lord Archer might be.

If there is a referendum on the Amsterdam Treaty, the Government may even win it. The Government could then face their critics with some confidence; otherwise, when the implications of what they have signed away at Amsterdam become clearer, they will stand accused of smuggling yet further surrenders of sovereignty through the back door, and a number of us will never forgive them for it.

3.41 p.m.

Lord Thomson of Monifieth

My Lords, I join the noble Viscount the Leader of the Opposition in thanking the Lord Privy Seal for arranging this debate. A month has passed since the Amsterdam Conference and the report to the House upon it. It has been a useful month in that it has allowed the dust to settle and put the Treaty of Amsterdam in a fairer perspective. I thank the noble Lord, Lord Richard, for the very clear way in which he described the provisions of the new Treaty of Amsterdam.

Following the trauma of the Treaty of Maastricht, I believe that in this country the Intergovernmental Conference that led to Amsterdam was always in danger of being hyped up by the fears and hysteria of the Euro-sceptics in more than one quarter of the House but particularly in the governing party. Much of the debate during that period ignored the fact that the IGC dealt neither with reform of the CAP nor with the arrangements for a single currency, which are the great issues that face the European Union. The Amsterdam Conference, as against the rather feverish background that led up to it, was in one sense something of an anticlimax. As the noble Lord, Lord Richard, has said, the Amsterdam Treaty is not a radical document. Nevertheless, it has brought about some useful changes (to use the language of the noble Lord, Lord Richard). These changes have been described very helpfully by your Lordships' Select Committee on Europe in a document that it produced which analysed the treaty against the recommendations of that committee at an earlier stage. For example, among those useful changes—I believe that on this I would carry even the noble Lord, Lord Bruce of Donington—is the introduction of qualified majority voting in the special case of fraud in the Union. I believe that that is a very helpful step forward in dealing with a problem about which we are all concerned.

However, the treaty fails to deal with the urgent issues of streamlining the structures of the European Union in its approach to enlargement. I refer to the changes required inside the European Commission and the changes required to the voting procedures. None of these aspects of the treaty with its modest changes has prevented the new leader of the Conservative Party from making the absurd proposal that there should be a referendum on this non-radical and modest treaty. It was significant that the noble Viscount the Leader of the Opposition made no mention of that particular commitment of the new leader of the Conservative Party.

If Amsterdam was a bit of a damp squib it was undoubtedly a considerable success for the new British Government. We on these Benches freely concede that. Among other things, the general election was a decisive repudiation of those who want to see Britain out of the European Union. I notice that the other day the Foreign Secretary in another place remarked that during the election one of our great newspapers had published a list of 308 Conservative candidates in its role of honour in the battle of Britain against Europe. Of those, 254 were rejected next day by the British people.


Lord Richard

My Lords, I am sorry to interrupt the noble Lord, Lord Thomson. I beg to move that the House do adjourn during pleasure for a quarter of an hour.

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

[The sitting was suspended from 3.46 to 4 p.m.]

Lord Thomson of Monifieth

My Lords. as I was saying before I was interrupted, the Government had considerable success at the Amsterdam conference. The Prime Minister had a particular responsibility for that, and he is entitled to credit for it. He has in many ways transformed the tone of our relations with our partners in the EU. He is an able pupil of my former noble friend Lord Callaghan whom I recall telling me on one occasion that one of his early lessons as a trades union leader and a young Minister was, as he put it, "You catch a lot more flies with honey than with vinegar".

That new positive approach has restored Britain's influence in the Community and the Government's capacity to safeguard British interests. I followed with great interest what the noble Viscount said about the social chapter. I am glad that one of the Government's achievements at the Amsterdam conference was to end the humbug that there has been: that improving competitiveness, engaging in labour market flexibility, and training people for all the changes that are taking place in the global economy, are somehow in total contradiction and cannot be achieved alongside the social chapter.

I always thought that one of the previous government's achievements was to give a lead in promoting the notion of the importance of British competitiveness, but I always found difficult to understand why they put it alongside total opposition to the social chapter. Of course there will be difficulties in the negotiations—a point the noble Viscount laboured a little too much. The social chapter, properly dealt with within the EU, will assist in bringing about the economic changes necessary to maintain the competitiveness of the EU in the global economy. So far, so good from the point of view of these Benches, on the Government's record at the Amsterdam conference.

However, we believe that the Government could have afforded to be a good deal less timid on a number of matters. Now that it is possible to take a train from the heart of London to the heart of Paris, and then go on by overland train to Rome or Amsterdam, for example, I find it odd that the Government should still feel determined to decline to join a European passport-free zone. I am old fashioned. I still believe in Ernest Bevin's favourite version of British foreign policy, of being able to go down to Victoria station and, without a passport, buy a ticket to where the hell one likes. I am sorry that the Government's timidity has undermined what should be their vision in these matters.

Again, on NATO and the WEU, I regret that the Government's position is indistinguishable from that of the Conservatives. The noble Viscount might have been a little more generous to the Government when he dealt with that part of his speech. Fortunately, on the ground within the EU, a great deal of European defence co-operation is going on. Fortunately, Britain has been playing its part in that. I console myself that, in due course by organic growth the sensible outcome will be that the WEU and the EU will be able to come together so that Europe can play a more effective part in global peacekeeping.

We on these Benches should like to see the Government take a much more positive line than their predecessors on the civil liberties aspect of the pillar which deals with police and intelligence co-operation. I disagreed greatly with what the noble Viscount said about the Opposition's attitude on that, reflecting the policies they had when they were in government. I find it profoundly depressing that a Labour Government should say with such insular satisfaction that the ECJ should have no authority to deal with such matters across the field.

I conclude by drawing the Government's attention to the fact that there is now growing up a new and important opportunity for boldness by the British Government. There was some discussion during Question Time today about the problems for us caused by the wild fluctuations that have been taking place in sterling from Black Wednesday until today, with the pound steadily growing in strength. That brings forward powerful arguments for the creation of a single European currency, if the conditions can be made appropriate. On these Benches we agree with what Samuel Brittan was saying in the Financial Times the other day that prospects in this country would be transformed: If the British Government surprised everyone by, at the last moment, agreeing to be a founder member". Brittan argues as we have from these Benches, that it is of course important to get the conditions right. It is vital that there should be a referendum of the British people on such an important step, but if the British economy is in the right shape to be among the founder members of a single currency, we should be taking steps to ensure that that is still a possibility. The Chancellor of the Exchequer has surprised us in a number of ways since he took high office. He surprised us with the step he took on the independence of the Bank of England. From these Benches we urge him to surprise us still further over Britain becoming a founder member of the single European currency.

4.7 p.m.

Lord Bridges

My Lords, I, too, welcome the opportunity to debate the Amsterdam Summit before we rise for the Recess. The meeting of the European Council in mid-June was significant for all member states of the EU, but particularly so for this country, occurring as it did so soon after our elections. The Council approved the outlines of the new European treaty which covers many areas of central importance to us. My remarks are directed mainly towards the treaty.

We do not yet have the definitive text. I have the impression that the text which is available has not yet been fully absorbed. That is not surprising, as one finds out when attempting to grapple with its complexities. Having made some effort to do that, I offer the following observations which are by no means comprehensive, your Lordships will be glad to hear.

First, the most positive result for Britain of that meeting was our re-entry into a more active and positive role in European affairs. Here, I agree most heartily with what the noble Lord, Lord Thomson of Monifieth, said. We have resumed a negotiating role. For the previous year or more we had effectively excluded ourselves from European diplomacy, because of the imminence of an election campaign here and the division in the ranks of the then governing party and the growing influence of anti-European feeling within it.

The result of our elections was greeted with an audible sigh of relief throughout Europe. The attitude of our Prime Minister and his colleagues at Amsterdam did not disappoint our partners. We are now back in business in Europe. I heartily welcome that change.

However, when we come to look at the issues discussed at Amsterdam, although some progress was made on the most essential dossier, final agreement on many of the most important still eludes us. For example, let us take the reform of the Community institutions. Many had hoped that the Amsterdam European Council could settle some divisive matters before the enlargement negotiations begin. That hope has been disappointed. Some progress has been made; for example, the protocol on institutions gives broad agreement on the reduction of the number of Commissioners to 20 as a maximum. But many of us would say that 20 is still too many and that the changes will not take place until after enlargement and are in any case linked to another controversial subject, which is the reweighting of votes in the Council in the QMV procedure. There is much work still to be done and the fact that these issues remain open will make the enlargement negotiations more difficult. A full agreement on the key institutional matters would have made the role of the presidency and the Commission in conducting the negotiations much more straightforward.

Nevertheless, some worthwhile agreements on institutional matters have been reached; for example, that relating to the appointment of members of the Commission by a common accord with the incoming president, who must in future be approved by the European Parliament. Those agreements seem to me to be improvements and should result in a more harmonious relationship between the member states, the President of the Commission and the European Parliament.

There are also extensions to the subjects covered by QMV in the Council and by the co-decision procedure of the parliament. Those changes will not be welcome to some sections of public opinion here, but the majority in Amsterdam and other capitals evidently thought otherwise, partly on grounds of democratic legitimacy and also because the changes were judged to be necessary as part of the preparation for enlargement.

I turn to agriculture. There had been hope that major changes could be made to the CAP before the enlargement negotiations began, as existing policies in the agricultural field—expressing it as politely as I can—are not appropriate to the agricultural profiles of the applicants. It would be far too expensive to continue with the policies that we have.

As far as I can judge, the Council did not have the full range of those issues on its agenda in Amsterdam and we cannot blame the heads of government for that. Nevertheless, we should take note that the issue has not been handled in an optimal and timely manner by the Community's institutions. In the meantime, Commissioner Fischler has put forward his agricultural proposals for the medium term in his Agriculture 2000 document. I understand that those proposals are likely to be examined by a Select Committee in another place and we await its appraisal with keen interest.

The proposals appear to be welcome in one respect; that is by placing greater emphasis on market-clearing prices for farm produce. However, I am disappointed by the continuing emphasis on income support for small and relatively inefficient producers. That policy has dogged us for far too long in the Community's agricultural policy. Of course, agricultural policy must embrace social considerations, but it should not be dominated by them. We must remember the interests of the consumer, too.

Another lacuna at the meeting was that the opportunity was not taken to redress the imbalance in expenditure caused by the outflow of resources from the structural and cohesion funds. I was interested to hear what the noble Lord the Lord Privy Seal said on that subject. I recognise that existing commitments remain in place in respect of those funds, but if we are to finance the changes necessary to prepare for enlargement it seems inevitable that a contribution must be found by economies in this area.

One significant change that has taken place is the insertion of a new title on employment into the Treaty of Rome. That reflects the social and political pressures on governments throughout Europe to promote a higher level of employment, a topic of more than usual importance and sensitivity because of its relevance to the financial criteria for EMU. One article in the title, No. 5, permits the adoption of measures in relation to employment which would be determined by using the QMV procedure in the Council and co-decision with the parliament.

That could involve funding from the Community budget, so the change is of particular importance to countries which are net contributors to the Community budget. However, it appears that there will not be sufficient headroom under heading No. 3 in the budget, which is specified in the text, for any large-scale spending at present. Nevertheless, the future use made of the new title in the treaty will require our close attention in future.

There is another interesting issue in the protocol on national parliaments. That document contains some important passages on the scrutiny of European legislation, a task carried out here by your Lordships' Select Committee on the European Communities, of which I have the honour to be a member. The new protocol has its origin in an initiative taken some time ago by the Select Committee and by the Select Committee on European legislation in another place. It led to a proposal for an amendment to the treaties. It was suggested that that should be done at the time of the Dublin European summit. That amendment would have provided for a period of four weeks from the receipt of a legislative proposal before its passage to enable scrutiny to take place in national parliaments. The latest text would extend that period to six weeks. If that text can be maintained in the final document it will represent a substantial improvement to existing procedures and will greatly facilitate the task of scrutiny at Westminster.

As I read it, the language used would also cover proposals emanating from the second and third pillars. It is at least clear that the proposal relating to the protocol on national parliaments would give COSAC (the Conference of European Affairs Committees of the national parliaments) a formal status under the treaties. Furthermore, there would be a particular responsibility for the scrutiny of legislative texts bearing on freedom, security and justice affecting the rights of individuals. I believe that that is certainly a step forward.

The juncture now reached raises some interesting questions about the political timetable. In 1998 governments of member states will have to take important decisions about EMU and the single currency, matters which were not on the agenda at Amsterdam. They will have to consider the procedure to be followed for ratification of the Amsterdam Treaty, too. Some countries—and I would expect Denmark to be one—may feel obliged to submit the new treaty to a popular vote because of the subject matter it contains. If so, the Danish Government might see some advantage in having the consultation on both issues—that is, EMU and the Amsterdam Summit—at the same time. Our position is different. Although we have heard the noble Viscount express the contrary view, I see no reason why we should not proceed to scrutiny and parliamentary debate of the new treaty and its subsequent ratification in the normal way.

In Germany, decisions on this matter will be particularly important, given the extreme political sensitivity of the single currency/EMU issue there. I believe that a further vote will have to be taken in the Bundestag on that matter in any event, since the procedure was specifically required by a resolution in the Bundestag when it ratified the Maastricht Treaty.

I suggest that the sequence of decisions by parliaments and referenda on these European questions in 1998 will be of some importance. I hope that they can be arranged so as to avoid unnecessary tension and drama. In my opinion, there is nothing in the treaty that is so grave and menacing as to require submission to a popular referendum in this country. Perhaps I may hazard the thought that we in this country already have sufficient referenda on our political agenda for next year as to make a further one undesirable. Anything that the Minister can say to reassure us on that point will be most welcome.

4.18 p.m.

Lord Barnett

My Lords, first, I welcome the noble Lord, Lord Howell of Guildford. I look forward to sharing with him debates on this and other subjects, as I did in another place. I hope that in this debate I shall agree with him more than I agreed with his noble friend Lord Cranborne, who opened for the Opposition.

My noble friend the Lord Privy Seal made the Amsterdam Summit sound like a huge success. "A good result" were the words he used. It certainly was not a failure because it did so little, but to pretend that it was a huge success is overdoing it just a little. I believe that the general principle of the treaty sums up what was achieved—or not achieved. I read from the general principles underlying the Union at Item 4 that the Union shall provide itself with the means necessary to attain its objectives and carry through its policies. Amen, my Lords! We should all love to carry through policies with which we agree and which we like. However, in a moment I shall come to what precisely was achieved and what was done in Amsterdam.

On the other hand, the noble Viscount brought party politics into this issue. I was sorry to hear that. The noble Viscount referred to further steps being taken to integration in Amsterdam and he referred of course to the social chapter. The social chapter is accepted by most member states within the European Union and over the years, their economies have done much better than ours. But to condemn the social chapter in the way that he did is to bring the issue down to a level which I should have hoped he would not have done.

The plain fact is that the noble Viscount should be embarrassed by his own party's policies. I noticed that he did not refer to too many of them, which is understandable. Perhaps he is embarrassed. He is shaking his head in that direction so he does agree. He agrees that there should be a referendum. However, I am not sure on what subject a referendum would take place. He did not make it clear what question would be put to the people of this country in relation to Amsterdam. He suggests that they should be asked to agree or disagree but with what? I shall return to that in a moment.

The Treaty of Amsterdam is littered with phrases which show just how little was achieved at Amsterdam. As regards qualified majority voting, there is no decision on the reweighting of the Council's votes. It did very little else, as the noble Viscount knows. It was decided that the European Parliament should not exceed 700 members. It has now 626 members. However, no resolution was passed and no figure was agreed. Perhaps the noble Viscount has a figure in mind which he would wish to put to a referendum.

It was suggested that a year before the Community reaches more than 20 members, there should be a comprehensive review. Perhaps the noble Viscount wants a referendum on whether there should be a comprehensive review. The noble Lord, Lord Moynihan, who is to wind up the debate, will no doubt tell us whether he agrees with his noble friend.

Everything on common foreign and security policy must be more flexible. That is wonderful. Perhaps we should have a referendum on that. Perhaps it should not be more flexible. The Court of Justice is not given power to amend. Shall we have a referendum on whether it should be given that power?

As regards defence, any move would be subject to the unanimity rule. Should we have a referendum on that? The noble Viscount is not nodding now so I assume that he does not mean that there should be a referendum on that item. On human rights, action, if any, should be unanimous and we should have a veto. Perhaps the noble Viscount does not wish us to have a veto and we should have a referendum about that. He is smiling now. That is good to see. He does not agree with anything that he said. I hope that that is the case.

The two major issues which were barely discussed at Amsterdam were: first, economic and monetary union, about which I shall say a few words in a moment; and, secondly, enlargement. There was an odd little discussion about enlargement. There is to be a comprehensive review. We do not know what will be the outcome of that but this Government have already implemented enough reviews not to want many more. Certainly we do not need a referendum on whether we should have reviews.

But if Amsterdam did not discuss very much of any real value or moment for the future, I should like to take up one major issue—that is, economic and monetary union. I hope that at least some Members of your Lordships' House on all sides will agree with me about that.

Given the need to make a success of the single market, economic and monetary union at the right time would be beneficial. It would be of great benefit to this country and to the European Union if it were the right time. If it were the wrong time, it would be a disaster both for us and the European Union.

We did not have a referendum on the Maastricht criteria but the Treaty of Maastricht was rather important. There were four criteria laid down in relation to economic and monetary union. I believe that some of those criteria were foolish in the extreme. However, the first, which deals with inflation, makes sense. Clearly, it would not be sensible to have a wide divergence of inflation within a single market or a single currency. There would need to be not just convergence within the Community but a sustainable convergence. That has not been emphasised sufficiently.

The second of the Maastricht criteria is that the total debt—not a single year's debt—to GDP should be at particular levels. We all know that many countries which are likely to be allowed to join a single currency are miles outside the GDP debt ratio of 60 per cent. But that is now being largely ignored as an issue and yet it will be years before member states which are widely in excess of the 60 per cent. will meet that criteria, and yet it is being ignored.

The criterion which is being spoken of constantly is the 3 per cent. annual target for this year. But 3 per cent. of GDP is too tight for one year. Some will achieve the 3 per cent. for the wrong reasons in the wrong way. Whether they will he able to sustain it is another matter. If they achieve it this year by all kinds of strange methods, they would be trying too hard and could do great damage both to themselves and the European Union. Too much emphasis cannot be placed on that.

The fourth of the Maastricht criteria is that exchange rate stability is crucial. For example, as I accept, we should not join at our current exchange rate. I never thought that I should have to say that. But it is a fact that if we joined at this exchange rate, as the previous government joined the ERM at a slightly lower level, that would be a disaster for us and would not be sensible for the European Union.

But the real risk is of either a weak euro, which would not be worth anything at all and would create huge headaches, or a strong euro with weak member states within it. Both of those would not be sensible and would be a wrong approach.

Therefore, at the moment economic and monetary union is so risky that, in my view, it could blow Europe apart. Some noble Lords, probably on both sides of the House, would not mind that. I see one of my noble friends nodding. But I would mind very much indeed. Some argue that failure to proceed would be seen as a high risk. There is hysteria within Europe about the real high risk. The real high risk would be that some member states would have temporary success in achieving the 3 per cent. of GDP this year and then not be able to sustain that inside a single currency. To my mind, that would be a total disaster.

As a European Union and as a country, we should stop pretending that we should try to get in in current circumstances. Decisions will be taken when we have the presidency in the first half of next year. At those council meetings in the first half of next year, we should fight very hard for delay in the start of a single currency. I regret having to say that because I want to see it start and succeed. But to start and make a decision about it next year in my view is quite wrong. Given the presidency that we shall have at that time, with the increased strength that we shall have then, I hope that we shall press very hard for the deferral of the start of a single currency.

4.30 p.m.

Lord Howell of Guildford

My Lords, I am grateful for this first opportunity to address your Lordships' House and extremely grateful for the kind anticipatory remarks from the Lord Privy Seal and also from my noble friend Lord Cranborne and the noble Lord, Lord Barnett. I hope that my comments do not disappoint after those generous trailers. I must confess that I regard it as quite a challenge to follow the very proper rule that a maiden speech should be unprovocative and uncontroversial, especially when dealing with issues of this kind which generate such intensely strong feeling and leave behind, like an American whirlwind. a trail of political wreckage. So it will not be easy; hut I must stick to the rules.

I hope that it is not too provocative to say that this is a treaty I have actually read, although I must confess that I do not understand every word of the word-processor English that tends to find its way into these documents. It is even more of a challenge for me to think how, as a newcomer, I can contribute to the huge granary of accumulated wisdom in your Lordships' House on European issues. The size of that collective wisdom is amply demonstrated by the excellent reports of your Lordships' European Communities Select Committee and its sub-committees which are very widely read all over Europe. I can vouch for that fact because, over the past 10 years, I had a role in the other place which involved my visiting all the parliaments of Europe—both EU members and would-be EU members. Everywhere I went, there were very favourable and constant references to the reports of your Lordships' House. There is not much that a newcomer can add to that kind of learned wisdom; however, I shall endeavour to contribute my pennyworth.

It has been said on all sides of the House, so it is not controversial to say, that the Amsterdam draft treaty to be agreed in October is a fairly modest affair. It is not the great leap forward that some hoped for; nor is it the great leap backwards or sideways for which other people hoped. It will not create the entirely new directions for Europe that some were hoping for, but it does not unravel Europe which was the hope of others.

One mild test that can be applied to the draft treaty and to the presidency conclusions—this was mentioned by the noble Lord, Lord Barnett—is to ask what it does for what Foreign Office officials are fond of referring to as the "three Es"—enlargement, employment and EMU—or balanced and sustainable growth, whatever the jargon is in the treaty and in the presidency conclusions. In the few moments that I shall have your Lordships' attention, I propose to try out that test. I turn first to enlargement. Again, I believe it has been agreed on all sides of the House that the draft Treaty of Amsterdam really does not register much progress on the matter. The presidency conclusions claim that it paves the way for enlargement and it is true that, since then, we have had the Agenda 2000 document from the Commission setting out its priorities.

However, priorities are one thing. Creating the practical steps to get enlargement going is something quite different. It is a matter of regret that the draft treaty does not contain any proposals on how on earth the Commission is to be reorganised to cope with 20 or 24 members. Similarly, as my noble friends have observed, it does not address the question of the weighting of votes. Nor does it really come to grips with the huge issue which dominates the whole enlargement question and stands in its way; namely, the need for fundamental and radical reform of the common agricultural policy without which the enlargement process will not be able to proceed when it comes to grapple with the vast capacities, low cost but also very impoverished capacities, of Polish or Hungarian agriculture.

Moreover, Agenda 2000, which perhaps your Lordships will be debating in due course, does not really come to grips with the enormous sensitivities of choosing one Baltic state—Estonia, which I am very glad is in the preference list—and leaving out the other two. It fills me with alarm that we may be recreating historic problems which in the past led to great tragedies. Similarly, none of us has the remotest idea of how we are to tackle the problem of Cyprus and bring a divided island into the European Union without sparking off huge new antagonisms of the kind featured in today's press reports. The Turkish Government are already cutting up extremely rough. Therefore, on enlargement, let us pray, hope and work for what we have always wanted to see; namely, an enlarged, free single market running from the River Bug in eastern Poland to Lisbon in the west. Let us hope that that is achieved, but there is not much here so far to encourage us.

As to the questions of employment and monetary union, which are both wrapped up together, the treaty and the conclusions call for a high degree of sustainable convergence. Those are rather inelegant words, but it is the language used. There is a problem here; namely, that the European economies are not converging. If anything, they are at present in a divergent mode. The contrast is obviously particularly strong between the major continental economies of Germany and France and our own country. All the major trends are moving in opposite directions, notably on the employment side but also in other fields. There are people who will say that we should not worry about it because it is really just a question of the business cycle, the phases of which will bring France and Germany along and the differences will diminish. I do not believe that, so perhaps I may put the alternative view to your Lordships.

People like Dr. Walter Eltis, the former distinguished adviser to the President of the Board of Trade, are much nearer the truth when they point out that there are fundamental structural reasons why convergence is not taking place between the UK and the continental economies. Until those fundamental reforms of structure are addressed in Paris and in Bonn—and, indeed, throughout the whole of those two great countries—with much more vigour, the divergence will remain with all the dangers inherent in trying to impose a system requiring convergence on a pattern of countries and economies which are not moving in the same direction at the same pace.

I have to agree with noble Lords who have spoken that it is doubtful that the soft euro, which the markets and the experts expect—indeed, they assume that there will be a soft euro—will be very good for us, for Europe or for the entire global monetary system; indeed, it could be very damaging. As for 1999, the treaty and the presidency conclusions express the hope that the relevant conditions will be achieved by that time so that we can have the irrevocable locking of currencies. I do not want to comment in my first speech to your Lordships' House on whether or not the single currency is a good idea. I shall just concentrate on the technical problems of the years after 1999 when it can be observed that there will be three years during which these currencies will be locked. However, that will, of course, be a golden opportunity for everyone in the currency markets to go long on the deutschmark and the guilder and short on the lira, the peseta and the French franc. I say that because it is a costless exercise. Astonishingly, they are being offered a three-year, costless one-way currency option. They cannot lose. If the currency link is broken, the hedging funds will make billions.

Therefore, it is rather an unnerving prospect which lies ahead. I, for one, agree with Alan Greenspan who is quoted as saying that the, euro will come, but will not be sustainable". If we even pause to think about that, we must accept that, after 1999, we will be heading into a period—indeed, it may already have started—of immensely dangerous currency volatility for which, frankly, the conclusions of Amsterdam and the revised treaties which govern the EU do not really prepare us. It is no surprise to me that people are already beginning to talk about yet another treaty, possibly in the year 2000, in order to cope with the entirely new conditions coming into play, especially on the currency side, which may indeed be very disturbing.

I share those thoughts with your Lordships. I am grateful to noble Lords for listening. I believe that the European Union is not the most important issue today in either this country's foreign policy or global foreign policy. We should give more attention to the emerging markets and to the Commonwealth with its fast growing economies. Perhaps more than is recognised, a great deal of our future interests, assets, prosperity and jobs will be determined by what goes on there rather than in the European Union. But the fact remains that it is our region, our neighbourhood, and we have to get our relations with the European Union right.

Even after Amsterdam, the opportunity is still open for the noble Lord the Lord Privy Seal, his ministerial colleagues and the Government today to pursue a highly positive European line. That opportunity is open less through developments in this country than because of developments in Bonn and Paris where entirely new perceptions are developing on how Europe should be shaped.

I hope that what I say is non-controversial. I believe that the Government have the capacity and the opportunity for various reasons—some of their own skill and making—to pursue a more positive policy, in the interests of this country narrowly but of Europe more broadly, to create a Europe which is more robust and more competitive, and a Europe able to deal with the oncoming currency storms, which will be severe and difficult, and to produce the kind of Europe for which many of us over many years have been hoping but now have an uneasy fear may he threatened.

4.41 p.m.

Lord Tordoff

My Lords, it takes a skilled parliamentarian to make a maiden speech which in part softens up the person who will respond to the speech immediately afterwards. The flattering remarks made by the noble Lord about the European Communities Select Committee in your Lordships' House did not go unnoticed.

We have listened to a remarkable maiden speech from a man of great ability and experience. The noble Lord has been in public life for a long time. He has held portfolios in relation to Northern Ireland, employment, energy and transport. However, for 10 years he chaired most admirably the Foreign Affairs Select Committee in another place. That is why those of us not only in this House but on your Lordships' Select Committees and sub-committees will welcome his presence and the contribution he will make to the debates in future to which we look forward with enormous relish.

The noble Lord follows in distinguished footsteps, as he did in another place, as Member of Parliament for Guildford, and now as the noble Lord, Lord Howell of Guildford. He follows in the steps of Lord Nugent of Guildford, who was widely respected in this House, whose shoes he will find it difficult to fill. But he did so admirably in another place and I am sure that he will do so again in this House.

I intervene merely to draw attention to the Third Report of the Select Committee on the European Communities, Session 1997–98, published last week. I draw your Lordships' attention to one or two parts of the report. I hope that it has been of some use, as it obviously already has been to some of the speakers today.

Noble Lords will remember that in a Select Committee report on the IGC in 1995 we referred to enlargement as perhaps being the most important part, the driving force, of the IGC. We were directed in that by Professor Helen Wallace, now Lady Wallace of Saltaire. I believe that at that time the Select Committee felt strongly that enlargement should be the motor which drove the IGC.

I turn to the new report. It sets out extracts from our earlier report on the left-hand page; and extracts from the draft treaty on the right-hand page. The report quotes from the Select Committee's report that: 'The Committee's enquiry has concentrated on two main issues. The first, and the largest, is the question of the Institutions and the decision-making process in an expanding European Union. The subjects considered under this broad heading included qualified majority voting in the Council, the co-decision procedure between the Council and the European Parliament, the size and composition of the Commission and the role of the Court of Justice. As well as examining the roles of the institution, we have also considered the related questions of the role of national parliaments, the simplification of legislative acts and delegated legislation'". At the time we stated that it was an IGC too soon. That was largely dictated by the fact that the ratification of Maastricht came much later than anyone expected. However, there was provision in the Maastricht Treaty that the Amsterdam conference should take place when it did.

A number of people have referred to the fact that not much has come out in the wash. The documents to which I refer indicate that. In passing, I pay tribute to the staff of the committee office who worked hard to produce this document in a very short time in order that your Lordships could have it before today's debate.

On pages 8 and 9 of the report we stated in 1995 that, Any system of presidencies must combine elements of continuity in essential tasks and elements of change, to ensure that all Member States participate as fully as possible in the management of the Union … We acknowledge that something must be done, but we do not contemplate the prospect of team presidencies with great enthusiasm". With 25 members, the presidency will come around only once every 12½ years. One wonders whether small states such as Cyprus and Estonia are capable of handling a presidency, with all the workload that goes with a modern presidency. As noble Lords will note on page 9 of the report, the outcome of the treaty is, No change proposed in the Treaty". That is disappointing.

We were worried about the size of the Commission. If one is to have only one commissioner from the major countries, one will still have a large number of commissioners. One wonders where the workload capable of their ability will be found. I think that the commissioners are already scratching a little as regards the portfolios. In the report we stated: We consider that reducing the number of Commissioners to one per Member State would be a useful first step towards achieving a more efficient Commission. As the Union expands, however, the question of whether there is enough work to provide 20, or 25, or more Commissioners with worthwhile portfolios will again arise to an even greater extent". That issue has been tackled. The outcome of the treaty is that, the Conference … agreed a 'Protocol on the institutions with the prospect of enlargement of the European Union', which effectively postpones the much more difficult and important question of the size of the Commission until enlargement begins to take place". There are two protocols. The first states: At the date of entry into force of the first enlargement of the Union … the Commission shall comprise one national of each of the Member States, provided that"— it is an important proviso, as the noble Lord, Lord Barnett, suggested— by that date, the weighting of the votes in the Council has been modified, whether by reweighting of the votes or by dual majority, in a manner acceptable to all Member States, taking into account all relevant elements, notably compensating those Member States which give up the possibility of nominating a second member". It seems to me that that could be a block on the way to progress. If I were seeking to join the Commission from eastern Europe, I should be worried about that provision of unanimity. I do not say that unanimity is wrong. But from the outside it will look a difficult hurdle for the Community to overcome.

Article 2 of the protocol states: At least one year before the membership of the European Union exceeds twenty, a Conference of representatives of the governments of Member States shall be convened in order to carry out a comprehensive review of the provisions of the Treaties on the composition and functioning of the institutions". In accordance with that article, another IGC will therefore be needed before the current round of enlargement can proceed. There are already six applicant countries, and another IGC will have to take place before they are allowed in. Again, that is a mind-boggling thought—more for those who are attempting entry than for ourselves.

There is no doubt that the net result, as suggested already, is that many people will be disappointed with the outcome of Amsterdam in relation to enlargement. I had the pleasure of attending a meeting in Luxembourg the week before last. Present were the chairmen of similar select committees from the chambers of almost all the countries of the European Union. Overwhelmingly the feeling was one of complete disappointment that an opportunity had been missed and that, in particular, institutional reform was a prerequisite to enlargement and had not been tackled, and in consequence, enlargement would be more difficult. The Dutch parliamentary member said that he thought this meant an end to enlargement. He put it as strongly as that. I am sure that that cannot be true; enlargement is a decision that people have already made in their hearts. Because of that, peculiarly, the pressure that ought to be there to unravel these problems has not been applied.

In addition to matters directly relating to enlargement, there is the question of co-decision. I emphasise that the document that we produced does not deal with every aspect of the Amsterdam Treaty; it deals with those aspects of the treaty on which we commented two years ago. We stated then that we believed that the conference should seek to simplify the procedures before steps are taken to extend co-decision. This report states: In particular, if the Community is serious about improving its efficiency, an increase in the use of co-decision is a step in the wrong direction". However, as the noble Viscount said, there have been rather a lot of increases in co-decision. There are 10 in the new treaty provisions; on my count, there are 21 in existing treaty provisions.

The important point is that any extension of co-decision must involve, as we stated, some diminution in the role and influence of national parliaments. That is quite clear. It places more power in the hands of the European Parliament. That may be what we want; it may be the logical thing to do—I do not know. But let us face the fact that it diminishes the role of national parliaments. However, some progress has been made towards speeding up the system of co-decision, and it has been simplified.

There is also some good news to gladden the hearts of the noble and learned Lord, Lord Simon of Glaisdale, and the noble Lord, Lord Renton. Under the heading, The Hierarchy of Norms and Cornitology"— which always sounds like something out of Tolkien—on page 40 of the report we state that, we have in particular repeatedly called for more resources to be devoted to the politically unglamorous task of consolidation". I know that this point is of particular interest to the noble Lord, Lord Renton, and the noble and learned Lord, Lord Simon of Glaisdale. The treaty states: A Declaration annexed to the final Act affirms the importance of the quality of drafting of Community legislation and considers that the three institutions involved in adopting Community legislation should lay down guidelines on the quality of drafting. The Declaration also welcomes the inter-institutional agreement on an accelerated working method for official codification of legislative texts and encourages all the institutions involved to make their best efforts to accelerate the codification of legislative texts". I wish them luck! I am sure I am joined in that sentiment by both noble Lords.

Finally, the best news so far as we are concerned relates to the role of national parliaments. It was mentioned by the noble Lord, Lord Bridges. The treaty now has written into it the provision that documents, in their fully translated form, should be in the hands of governments six weeks before any decisions are taken in councils, except for emergencies. One wonders how many emergency situations will crop up. Nevertheless, it is good to have that provision in the treaty. If we are to do our job properly as national parliaments in scrutinising legislation that comes out of Brussels, it is essential. Both the committee in another place and the Select Committee of this House are to be congratulated on trying to have that included in the treaty. This Government and the previous government are also to be thanked and congratulated on pushing that point.

The report is very much a curate's egg—there are good bits and bad bits. We are saddened that the bad bits relate to almost the heart of our IGC report of two years ago. However, some progress has been made.

In a sense, this document is almost passé already. Agenda 2000 is in some ways far more important than the Amsterdam Treaty. The treaty will have to be ratified. But Amsterdam 2000 begins to look forward and set down some markers in relation to the subjects spoken of by the noble Lord, Lord Barnett, and many others: financing, the future, changes to the CAP—and, it is to be hoped, the institutional change that is essential if enlargement is to take place, as we all hope it will, on time.

4.56 p.m.

Lord Howe of Aberavon

My Lords, the noble Lord, Lord Tordoff, knows well how much the House is in his debt for the work that he and his committee do. We are grateful to him for the compact report that he has now produced.

I hope he will forgive me if I follow him no further down that road, but join him in extending a warm welcome to my noble friend Lord Howell of Guildford and congratulate my noble friend on the quality of his speech in every respect. Noble Lords have commented already on his 10 years' experience as chairman of the Foreign Affairs Committee in another place. They did not draw attention to the fact that my noble friend took over from me many decades earlier the portfolio of editing the Bow Group journal Crossbow. One of the editorial objectives of that journal—which, I am happy to say, still survives—was a realistic appreciation of Britain's role in the world. We both find common ground in our approach to this subject today. I do not quite follow my noble friend in the complete re-ordering of priorities as between Europe and the Far East upon which he half embarked. I do follow him when he says that there is a substantial granary of wisdom in this House. I know that he will make a huge contribution to this House's very own grain mountain of wisdom.

There have been many different verdicts offered on the Treaty of Amsterdam. There were some very improbable acclamations. The noble Lord, Lord Barnett, drew attention to the characteristically enthusiastic applause given to the treaty by the Lord Privy Seal. On the other hand, there were some denunciations of it of a dismissive or reckless kind. The noble Lord, Lord Barnett, stopped just short of being dismissive.

I prefer a more modest judgment on the whole of this operation. I cite as a particularly interesting comment the third report of the International Advisory Council of the Centre for European Policy Studies (CEPS), normally an enthusiastic organisation. Its indefatigable director, Peter Ludlow, pays tribute in this report to: the seeming modesty of both its agenda and its outcome". He describes that as, a positive rather than a negative feature". I agree with that.

Rather surprisingly, Ian Davidson, the redoubtable correspondent on this subject at the Financial Times, puts the same point, though perhaps predictably with less enthusiasm, when he states: the integrationist model of the European Union is approaching the limits of what is politically acceptable to the nation states". That is a fair judgment and one that I welcome. If it was true as we moved from 12 to 15 member states, it will be truer still as we move from 15 to 20.

In other words, we are approaching this topic now with objectives that are a lot less grand than we had at one time, and with language a lot less high-flown. But the alarms and hazards are rather less menacing as well. That is not to underrate the process. The opportunities, the challenges and the potential still remain of urgent practical importance to this country. I will return to that in a moment.

If the treaty is no cause for acclamation, it is no place, either, for apprehensive panic or denunciation. I have in mind, with the greatest respect to my noble friend Lord Cranborne, the suggestion that the treaty contains positively dangerous provisions in respect of human rights which could be used to damage the United Kingdom.

I do not think that is a reality at all. If one looks at the text more closely, the likelihood of that clause being used against any existing member state is remote. It was specifically tailored to ensure that the newly acceding eastern and central European states fully understand in advance that democratic, law-abiding culture is an absolute and continuing requirement of European Union membership. It is exactly the kind of safeguard which I would have thought that Conservatives have long sought, and rightly sought, in those circumstances.

But the clause is closely circumscribed. I differ on one point from my noble friend. For a breach of those conditions to be determined it needs, first of all, a decision by the Council acting by unanimity and endorsed by a two-thirds majority of the European Parliament. The risk of those provisions being used to force a member state such as ourselves to adopt economic or social policies which we oppose is, frankly, fanciful. The appearance of that fear suggests that there is still too much going on even in some parts of my own party to build up this picture of the Amsterdam Treaty as a threat to the survival of Britain as an independent nation state. The truth is that Amsterdam, as several speakers have already pointed out, is more modest institutionally than either the Single European Act or Maastricht.

The suggestion that we should have a referendum on the Amsterdam Treaty is not well judged. I was struck by the fact that the commendation of it by my noble friend Lord Cranborne was so tentative that it appeared to have escaped the notice of the noble Lord, Lord Thomson, altogether. I welcome that tentative quality. I regard the suggestion of a referendum in that context as less than courteous to the last Prime Minister, who correctly resisted a referendum on Maastricht. Moreover—and I detected this note in my noble friend's speech—for us to call now for a referendum on this modest treaty might, as my noble friend said, result in a win for the other side. That would not be very good for those in my own party who are apprehensive about further progress in a "European" direction. Nor would it be entirely good for my party itself. Hesitantly, I say that the sooner this particular idea moves off stage, the better for all of us, not least the Conservative Party. If the election result proves anything, it is that the electorate is much more likely to respect parties which display a realistic grasp of how Britain can make a continuing success of our membership of the European Union. That is what requires a rational appraisal of the Amsterdam Treaty.

I agree with those who suggest that, from our point of view, the most substantial fault is probably the endorsement of the social chapter. That is a proposition to which we have adhered for so long that it would be impossible for us to resile from it. I suggest that even that can be mitigated substantially. I think that the case for more flexible labour markets of the kind we want can and should be put forward, as my party has always done. It is probably more attractive if put forward not so much as an Anglo-Saxon/transatlantic prescription but as a European one. Our Dutch friends, for example, are already blazing the trail down that road. If we present the case in that way, it is more likely to be effective. It is important to recognise that the cure for Europe's worst present disease, unemployment, is more likely to be found through market-driven national labour market policies and we are entirely right to argue the case for those.

There are some pluses in Amsterdam, and they have been recognised. Frontier controls, immigration and asylum arrangements have been safeguarded on a continuing basis. There have been some useful simplifications in the European Parliament's decision-making procedures. The common foreign and security policy arrangements have been consolidated in a sensible fashion. There is no significant shift away from unanimity on objectives. Once again, Peter Ludlow's sensible conclusion is that to achieve an effective CFSP we do not need another IGC to do the trick". The truth is that there, as in so many other directions, what we really need is the mobilisation of collective European will. We need that above all when we address the agenda to which many noble Lords have drawn attention: the reform of the common agricultural policy and the changes in the EU's operating procedures and institutions. Both of those are necessary if enlargement is to come about.

My experience of the curious process of negotiating within the European Union is that important questions of that kind are only resolved when there is a combination of inescapable deadlines and of a resurgence of political will to tackle the problems. That happened at the time of Fontainebleau and the Single European Act. The budget was running out, the British problem had been impossibly long-lasting and we wanted a single market. All those things came together. I believe that we are now approaching a time when they must come together again in a future set of negotiations.

That leaves the last, unlisted item on the Amsterdam agenda: economic and monetary union. The noble Lord, Lord Barnett, regaled us once again with what I might call his usual speech on that topic. I do not mean that in any demeaning fashion because he offers us much wisdom on that topic and I share much of his analysis. My anxiety as far as economic and monetary union is concerned is not because I am apprehensive of the objective—if we can achieve it, it is enormously important—but because it is unwise to believe that we can achieve it on the kind of auto-pilot constructed in treaty form five, six or seven years ago. It requires great sensitivity.

It is very important, as we handle that topic, for Britain to retain its ability to join the economic and monetary union when and if we wish, at a time of our own choosing. That was the position of the last government, it is the position of the present Government, and it is the right position. The manifesto on which our party fought the election committed us to that position and I believe it is the position to which we ought to adhere. EMU is too important a prospect, with implications so far-reaching for British business and British jobs, for us to rule in or out, for five years or 10 years or for ever, the right decisions on that, as a matter of principle.

That is the recognition offered by the CBI in its survey last week. An astonishing 92 per cent. of those canvassed were prepared to accept the legitimacy of joining the single currency when and if the conditions were right; only 6 per cent. were opposed to it in principle. That is why I was delighted to see an interesting article in that remarkable journal The House Magazine of 23rd June, written by the director of the Centre for Policy Studies, Tessa Keswick, in which from that organisation the view was clearly expressed that the new Tory leader must … leave the door open to joining at some future time" It is further stated in the article that this is no time for the Conservative Party to be alienating (our natural) supporters … Under new leadership Conservatives must set out a more positive agenda for Conservative Europeans, and develop a new language with which to express it". "Never say never" was the title of the article. My delight in being able to quote that passage from the director of the Centre for Policy Studies springs not only from the fact that the patron and founder of the centre is my noble friend Lady Thatcher but also that the chairman of the centre—who, unhappily, is not in the country today—is my noble friend Lord Griffiths of Fforestfach. If its director is prepared to commend wisdom of that kind, then I hope it will commend itself to others within the Conservative Party as being the right approach to this problem.

5.9 p.m.

Lord Stoddart of Swindon

My Lords, I should like to join the noble and learned Lord, Lord Howe of Aberavon, and the noble Lord, Lord Tordoff, in congratulating the noble Lord, Lord Howell of Guildford, on a superb maiden speech. I particularly welcome his view that we need to reorder our priorities towards emerging markets and the Commonwealth. I also welcome, as I am sure the House does, his strictures on EMU. I look forward to his intervention in future debates, particularly on matters concerning Europe.

On 4th June during the debate on the IGC, before the negotiations began, I made four major recommendations to Her Majesty's Government as to what they should do at Amsterdam. First, I believed that they should negotiate a major reform of the CAP. I believed that they should try to obtain the abandonment of the common fisheries policy and return fishing waters to our old jurisdiction. I also advised that they should cut the European Commission down to size and should not extend further powers to the European Parliament. I am sad that they adopted none of those particular policies and, indeed, even more sad that they did exactly the reverse.

My noble friend Lord Barnett, who is not in the Chamber at the moment, referred to my nodding in support of the notion of blowing Europe out of the water. I can assure him that I was not doing anything of the kind. It is not my policy, nor anybody else's policy, to blow Europe out of the water. I was welcoming his support for the position on economic and monetary union that I and others, especially my noble friend Lord Bruce of Donington, have taken since the Maastricht Treaty. Indeed, we tried to amend the Maastricht Treaty to take into account the points of view that he supported.

But I must criticise the manner in which vital questions are decided at intergovernmental conferences. Great matters which affect our way of life, our laws, our institutions and our Parliament are decided—final decisions—apparently in a couple of days, at breakneck speed, with heads of government having to run from one meeting to another to keep up with events. I do not believe that that is a sensible way to conduct our affairs. Often, decisions are made in the early hours of the morning, when many, if not all, of the participants, have had a good dinner and perhaps imbibed a skinful of alcohol. The whole business is thoroughly undemocratic. There is no involvement by the people whose lives are affected by those decisions. The phrase "a people's Europe" is, in fact, a hollow mockery. A top European people's Europe is the reality.

I should like to ask my noble friend who will wind up the debate whether the treaty will be ready for signing in October. There seems to be some doubt as to whether all the problems of that hurried treaty will be ironed out by October. I hope that my noble friend will be able to give me a reply to that important question. I also ask him to tell us when the treaty is likely to come before Parliament for ratification. Will all the treaty revisions be subject to agreement or amendment by Parliament? Those questions are important. I hope that my noble friend will be able to answer them.

Turning to border controls, the Government claimed a great victory over that negotiation. Can my noble friend say exactly what is the position? Are we to keep control of our borders indefinitely—I repeat, indefinitely? The noble Baroness, Lady Thatcher, when she was Prime Minister in 1985, thought that she had settled that matter for all time. Clearly, in the light of experience, she had not settled it for all time. I should like my noble friend to tell me the difference between what Lady Thatcher, when she was Prime Minister, thought she had obtained and what the Government have now obtained or think they have obtained.

The new protocol entrenches subsidiarity in the new treaty. That might sound all right, except that some of us do not accept the principle of subsidiarity because it means that one is subsidiary. But does not it also entrench the acquis communautaire? And does not that mean that powers once ceded to the European Union cannot be regained by the individual member nations? Again, I hope that my noble friend will reassure me that that is not the case.

I turn to foreign and security policy. There has clearly been some movement toward the European Union having a greater role in foreign policy and indeed in defence. In my view, that is a further turn of the ratchet of further integration. The Commission is determined to play a greater role in foreign relations. There is a new emphasis on—to use the European terminology—"consistence of external relations as a whole". That, in plain English, means a common foreign policy. The Secretary General of the Council of Ministers apparently becomes the "High Representative of the Common Foreign and Security Policy". My God! Gilbert would have had great fun with that particular title. In other words, he will become a foreign secretary general.

How can all that be reconciled with the principle that British foreign policy exists only to further the British interest? The British interest under this system will become subsidiary to the whole interest of the European Union. Again, I should like my noble friend—if he can and if he has time—to comment on that.

On defence, reference is made to the progressive framing of a common defence policy and to closer relations with the Western European Union, with possible integration of the WEU into the European Union. Those moves will delight the federalists, who seem to prosper whatever the political colour of the British Government.

Can my noble friend also tell me what happened over the common fisheries policy, which has not been mentioned so far this afternoon—or perhaps I missed any reference to it. That issue is important. Perhaps I may quote from the Fishermen's Association Limited, which is an important body. With regard to the treaty, it headlines its comments: Blair returns home with an empty net". It goes on to say: British quotas might have to land 50 per cent. of their catches in British ports, or spend so many days a year in British ports. This would not remove a single 'quota hopper' from the British register, but at least it could be presented as ensuring 'greater economic benefits' for Britain and as a disincentive to any new quota hoppers. Astonishingly, however, it then turned out that these conditions have been written into British fishing licences since 1989 … In short, there was nothing new about Mr. Blair's great 'concession'. It has been in place for eight years, and furthermore has proved in practice wholly unworkable, because it is impossible to monitor precisely what every fishing boat is up to". That is a serious matter for the fishing industry. Again, I should like my noble friend to tell me exactly what was achieved and what will be different after the IGC from what obtained before the IGC. This House is entitled to have an answer to that.

We have already heard that qualified majority voting has been extended to 16 new areas. Although those areas are said at present to be only minor extensions, past experience tells us that, in fact, it means further incursions into what Douglas Hurd described as the "nooks and crannies of national life". Perhaps we could have some further clarification as to exactly what that extension of QMV will mean.

Finally, there is the European Parliament. As the noble Lord, Lord Tordoff, pointed out, the powers of the European Parliament have been considerably strengthened. Co-decision has now been extended to all measures other than those articles relating to European Monetary Union. That extends co-decision to another 23 areas. There is also the power, which neither this Parliament nor any other national parliament has, to veto the appointment of future presidents of the Commission. That is a considerable power, let us make no mistake about it. So, we shall find that the European Parliament will be able to over-rule a nominee of the British Government and the British Parliament will have no say over that matter at all.

Again, as the noble Lord, Lord Tordoff, pointed out, as the powers of the European Parliament grow, so the powers of Westminster will be diminished. That process will be exacerbated by devolution. Of course, we all now know—because the Prime Minister told us—that the European Parliament is to be elected by PR in 1999, with no consultation with either House of Parliament as far as I am aware, although there has been consultation with his new-found coalition partners, Mr. Ashdown and the Liberal Democrats. Presumably PR for the European Parliament will have to be agreed by both Houses of Parliament. Since that, as far as I can find out, was not a specific manifesto commitment, presumably the House of Lords will not be threatened with imminent destruction or emasculation if it wants to do something about it.

I fear I cannot welcome the new treaty. It may be a small ratchet; it may be a bigger ratchet than we think. Nevertheless, it is a further ratchet towards further integration within Europe and a further step to what the Germans so often like to describe as a country called Europe.

5.23 p.m.

Baroness Elles

My Lords, I join in congratulating most warmly my noble friend Lord Howell of Guildford on his excellent maiden speech. Many Members who come to this House will be extremely jealous when they realise the kind of maiden speech that can be made, as exemplified by my noble friend today. We look forward to hearing many more speeches from him on many of the issues facing this House today.

The draft Amsterdam Treaty, the text of which has been considered for nearly two years, turns out to be a very disappointing document. It is disappointing for those who expected more and disappointing for those who wanted a reaffirmation of the status quo rather than an advance towards closer integration of the European Union. In fact, one might say that nobody is totally satisfied by the document.

While the text of the treaty is apparently brief, it is followed by 10 protocols, all of which are legally binding, and by 46 declarations which are not legally binding but which nevertheless have an important effect on decisions of member states. It seems that the general feeling of some member states concerning the treaty is that it has not led to closer integration and that is to be regretted. But for other member states—indeed, for all member states—it has failed to lay down institutional provisions needed to facilitate enlargement of the Community and, consequently, a further IGC will be needed before any enlargement can take place. That is regretted on all sides. It seems to be some form of—dare I say it?—incompetence that the heads of state at a meeting in Amsterdam failed to reach any sort of agreement. Whether or not that was on purpose, I do not know.

If applications for membership from only five countries are submitted—making an eventual total of 20 member states—it is understood that comparatively minor constitutional changes would be required, such as the retention of 20 commissioners, with one commissioner per member state. That is one issue that for some time the former Prime Minister—I do not know about the present Government—agreed would be acceptable to the United Kingdom; that is, that we should have only one rather than two commissioners. It has also been said that six countries may apply, in which case a further IGC will be necessary in the not-too-distant future.

Noble Lords on both sides of the House touched on many issues with regard to the content of the treaty and I should like to refer to just three. The first and most important is that the institution most affected by the treaty is the European Parliament. Its main procedures have been cut down to three. There were previously around 20 different procedures concerning the adoption of decisions. To the 15 matters already in place which require co-decision, eight new areas have been added, making 23 in all.

The co-decision process has been modified and simplified so that the process should take less time passing through parliament. But it will require considerably better attendance and concentration on the matters in hand if the European Parliament, with its 626 members—there has never been a case when all members have attended the parliament—is to justify its new role in taking an equal part with the Council in adopting legislative measures. Those measures, voted by the maximum 626 members of the European Parliament, are to apply to something like 400 million citizens of the European Union. The legislative powers are important and it will be essential for the European Parliament to recognise its considerable responsibilities by having a high proportion of members in the plenary to take part in the voting process.

One further task has been allotted to the European Parliament; that is, the agreement by the parliament to the nomination of the president of the Commission. That point was made by the noble Lord, Lord Stoddart. It may appear to be of relative unimportance but we have only to recall the nomination of President Santer following the withdrawal of the name of M. Dehaene to recognise that the issue is not always straightforward and can be of importance both to this country and other member states should the name of a first chosen or selected candidate not be acceptable to the majority. It is important that that specific prize should be allotted to the European Parliament and we in our turn must be sure that our members know how we wish the vote to be taken.

The second issue is the agreement by the present Government to accept the provisions of the social chapter which will now become part of the treaty. That is to be much regretted. It may well be that the Government will also regret that step when Commissioner Flynn, responsible for social policy, produces new proposals for draft directives which can be adopted by qualified majority voting. He has in fact already declared one or two changes to existing statutes which would have a detrimental effect on the workforce of this country. Following the Government's acceptance of the social policy, we shall see the Commissioner proposing more changes in relation to these statutes. The Government will regret the decision and the British people will suffer as a consequence of it. The freedom which has been available to British companies resulting in a marked decline in unemployment and a flourishing economy could he lost and we could see a rise once again in unemployment and a decline in the country's economy.

A further change to be regretted is the switch of articles on asylum and immigration to the part of the treaty which now comes under the European Community and will no longer be subject to decisions on an intergovernmental basis in the third pillar. It is at least to be welcomed that the United Kingdom as well as Ireland will not be obliged to adopt any of the measures falling under the new title in relation to asylum and immigration. However, it is possible for the United Kingdom to opt in to all or any of these measures individually. The position is not quite so clear as it might first appear, since some action has already been decided under Title 3 and those would presumably be binding on the United Kingdom because they would have been taken by unanimous vote. It could be possible that with the recent increase in asylum applications to the United Kingdom and a correspondingly comparative decline in the number of applicants to enter and remain in other member states—this issue was raised when we were debating the question of asylum a few months ago—the United Kingdom should take further measures to ensure that only genuine asylum seekers are admitted and not those who turn out to be in search only of higher financial reward rather than protection against some form of state persecution.

Other changes in the draft treaty all point to the undeniable pressure from some member states towards an eventual federal system of some kind. There is no specific mention of that in the text but there is an indication that every added part appearing in the draft treaty is a step towards a European federal system. If that is what we want, that is what will be found in the treaty; if you do not want it, this is a treaty which we must oppose. We must ensure that amendments of some kind are made. That is possible because the treaty will not be adopted until October. There are measures which can be adopted to prevent certain steps being taken.

It is perfectly possible to be in favour of close co-operation with other European Union member states and acting together in selected areas. But pressure and coercion and the withdrawal of powers from national parliaments may well not lead to the continuation of parliamentary government which we have enjoyed in this country for so many decades. The drift of European legislation is towards the removal of powers from national parliaments and a concentration on European Union institutions. We have heard examples of that in today's debate. The effect of that movement, together with the proposed removal of legislative power from Parliament to a Scottish parliament and some power to a Welsh assembly, is some explanation of the already evident decline in the importance being attached to our own Parliament by the present Government.

5.34 p.m.

The Earl of Carlisle

My Lords, I welcome the debate and I thank the Lord Privy Seal, who is not in his place, for introducing it. It would have been disgraceful if he had not. I joined your Lordships' House in September of last year. Between September and May there were far too few debates in the House on the subject of European union and security. I welcome the Lord Privy Seal's assurance that there will be regular debates on this subject.

Today's debate follows an intergovernmental conference. Perhaps before the next intergovernmental conference we may have another debate. All who read their history know that this House was a great counsel. Noble Lords on all sides of the House have something to offer in guiding Her Majesty's Government on how far they can go and how much further they might go when they take part in intergovernmental conferences. I thank the Lord Privy Seal for his courtesy and lack of pomposity and for the way he conducts his office. This is the first time I have taken part in a debate which he has initiated. I know that your Lordships wish him well as Leader of the House.

It is a privilege and pleasure to congratulate the noble Lord, Lord Howell of Guildford, on his maiden speech. I first met him in Fermanagh in 1972. I was then a very junior member of Her Majesty's Army and he was Minister of State in the Northern Ireland Office. In the preceding few weeks there had been a number of vile and brutal murders of gallant and distinguished members of the Ulster Defence Regiment. The then Minister of State, the Member for Guildford, came down to meet the families, friends and colleagues of those who had been murdered. The families, friends and colleagues were deeply unhappy and disturbed and were considerably upset with Her Majesty's Government. I watched with interest how the then Minister of State dealt with those bereaved people. He did so with courtesy and reassurance. It was an interesting operation. I salute him for the way in which he handled that difficult portfolio. We were all disappointed when he left the government—exit stage left—in 1983. It is my opinion, which I expect some of your Lordships will share, that the government were less effective after he had gone.

In February this year I had the honour to be host at a reception given in honour of the Estonian Minister of Foreign Affairs, Mr. Ilves. I presented to the Estonian Ambassador a list of the personnel invited to the reception. He looked at the list. I said, "Is there anyone else you might like me to invite?" He said, "One person, the chairman of your Foreign Affairs Committee in the House of Commons, the MP for Guildford, whom we all greatly respect". I know of the noble Lord's interest in bringing the eastern and central Europeans into the Union and I know that what he says in the House will not only be listened to here but certainly throughout eastern Europe. We look forward to hearing from him in the future.

Is the Amsterdam Treaty a watershed; is it an advance; or is it, as it is claimed, a new and positive agenda, a fresh and constructive approach to Europe? I do not believe it is a watershed but I believe it is an advance. The word "borders" has been bandied across the House a great deal. The right honourable Member for Sedgefield thinks it is a great advance that he has somehow established our borders. Perhaps I may suggest—and I do so with reluctance—that the great Russian people, whom the eastern Europeans, in particular the Baltic states, refer to as "our eastern neighbours" when they are being polite, is at the moment an international mafia.

There is traffic in all sorts of illegal substances. I mention the traffic in human beings, alcohol and drugs which is pouring across the borders, and black marketeering. Perhaps those statesmen at Amsterdam were only looking at the borders of western Europe. I suggest that, like ostriches, their heads were in the sand. They should have lifted up their eyes and looked at far broader horizons, because until we sort out the borders of eastern Europe and help those who at the moment cannot help themselves to police their borders, whatever we do about the borders within western Europe, that illegal traffic is going to cross the borders.

I shall confine myself to the enlargement issue because, as I have indicated before, and I shall do so again, I have an interest to declare. When this House is not sitting I live and work in the Baltic states.

The Prime Minister has said that not as much progress was made on enlargement as should have taken place. I agree and ask why? The Prime Minister's statement was repeated by the Lord Privy Seal. The Prime Minister said that we shall play "a leading role" in those negotiations in December, particularly during our presidency. A leading role? Surely, the president must play the leading role. Surely, this Government, with an enormous majority in another place, will wish to have the leading role.

The noble Lord, Lord Tordoff, said that he worries that a country the size of Estonia would possibly not be able to carry out the duties of the presidency for six months. Perhaps the noble Lord—my noble friend from this side of the House originally and now, of course, a neutral figure in the House—is not aware of the gifts of some of the leaders in eastern Europe and in particular my noble friend—and I use that term deliberately—President Lennart Meri. I understand that great gentleman statesman. He is a writer and an orator in five different languages who can put some of us to shame in the way that he handles our mother tongue. I am sure that a gentleman who was considered for the post of Secretary General of the United Nations could indeed wipe the board when it comes to holding the presidency of the European Union, if he does so.

Let me conclude by suggesting what Her Majesty's Government must do before they assume the presidency. Again, I shall confine myself to enlargement. First, I wish to see the right honourable gentleman the Member for Livingston in another place and also the Minister for Europe, the honourable gentleman for Newcastle North, touring the six capitals or inviting the Ministers here so that they can exchange views on how the enlargement process is to be carried out.

I hope that Her Majesty's Government will not expect too much from those six European states because they have just come through a terrible 50 years of oppression and of course they cannot put everything right in one day, six years or a decade. I was too young, but let us remember that two years before I was born General Marshall introduced the Marshall Plan. Regardless of where we sit in this House I believe that we are all enormously in the debt of General Marshall and Ernest Bevin, the Foreign Secretary, who took up that ball and ran with it.

There is no Marshall Plan, so what can we do? We must explore ways of assisting those six nations which aspire to join the European Union. As the noble Lord, Lord Howell of Guildford, wisely reminded us, we must not neglect the others because that would be a recipe for sliding back into the anarchy and totalitarianism that we saw in the 1930s when some of those nations went the wrong way and forgot their democratic paths.

I wish the Government well and I thank them for what they have achieved so far at Amsterdam. I look forward—and we shall press them from this side of the House—to their keeping us informed of the way ahead.

5.46 p.m.

Lord Ponsonby of Shulbrede

My Lords, I join other noble Lords in congratulating the noble Lord, Lord Howell of Guildford, on his maiden speech. He should be aware that there are younger Members in this House as well as in another place. As one of the younger Members of this House, I shall certainly go out of my way to listen to his future contributions.

I intend to speak briefly on how local government has gained from the Amsterdam Treaty. Local government looked to the IGC to recognise local and regional authorities as genuine partners in the European decision-making process. I believe that this treaty has recognised that by extending a range of areas where the Committee of the Regions will be consulted. Those areas include new EU competence in promoting employment, social matters, public health, environment, vocational training and transport. These are at the very heart of local government.

The relationship with the European Parliament should also improve now that it has been given the right to consult the Committee of the Regions, where previously only the Commission or the Council of Ministers had that right. A number of other small measures have been taken which will enhance the status of the Committee of the Regions which will in turn enhance the voice of local government.

Local government's aim of extending protection against discrimination—particularly racial discrimination—has been achieved in this new treaty. Equality between men and women has been reinforced under Article 119 of the treaty and the needs of disabled people are recognised in a declaration which accompanies the treaty. All those developments are wholly in tune with the aims and aspirations of local government today.

A further development from the perspective of local government is that the treaty recognises that subsidiarity is not just a matter between the Union and national governments; it includes an opaque reference to sub-national government. The protocol reads: For community action to be justified both aspects of the subsidiarity principle shall be met: the objectives of the proposed action cannot be sufficiently achieved by Member States' action in the framework of their national constitutional system and can therefore be better achieved by action on the part of the Community". Although the language is obscure, it is a recognition that a "Member State" is not just central government, but all levels of authority according to the constitutional law and traditions of that state. In addition, the Commission will produce an annual report on subsidiarity and submit it to the Committee of the Regions as well as to the Council and the Parliament.

The new treaty makes promoting a high level of employment an objective of the EU. I believe that that is a most significant development within the treaty. From a local government perspective the Committee of the Regions will be consulted on national employment policies, thus recognising the importance of employment for local government. The Committee of the Regions will also be consulted on the funding programme designed to promote high levels of employment.

I have mentioned the enhanced role, as I see it, for the Committee of the Regions, extending protection against discrimination, extending the subsidiarity principle and promoting high levels of employment. All of those areas meet local government's aspirations and enhance local government's role within the European Union.

Many special interests have lobbied the IGC and their efforts have been rewarded by declarations which give recognition but have no legal force. By contrast, local government has been remarkably successful in pressing its interests on the IGC.

The Treaty of Amsterdam is not a second Maastricht Treaty—where the Maastricht Treaty innovates, the Treaty of Amsterdam consolidates. Many noble Lords have welcomed the treaty for that reason alone. In conclusion, I too welcome the treaty and congratulate the Government on the successful conclusion of their negotiations.

5.50 p.m.

Lord Beloff

My Lords, never having been part of the usual channels, I am not altogether clear as to the principles upon which the speakers' list is compiled and whether it is wholly accidental that the youngest Member to speak in this debate should be followed by the oldest. I say that because the speech to which we have just listened seemed to me to encapsulate almost everything that I have to complain about in respect of the European Union: endless phrases of goodwill; principles that everyone recognises; consultation here, there, and everywhere; but in the end, nothing happens.

It is, after all, now nearly half a century since the European Union was launched. One would have expected achievements on the ground and improvements in the position of the peoples of Europe. They have been rare and do not at the moment appear to be multiplying. For me, it is not so much a matter of congratulating the noble Lord, Lord Howell of Guildford, on what everyone knew would be an important maiden speech; it is a matter of expressing my pleasure that we now have in your Lordships' House someone who shares with me (although at a higher level of achievement) a belief in Europe and in the importance of European nations co-operating for their common good, without being mesmerised by the accidental conflation between that ideal and the so-called "European Union", the former European Community, a group comprising a relatively small number of European countries which came together for particular purposes—understandable and perhaps noble purposes at the time—hut which established a set of institutions and a method of thinking which does not now meet the needs of the kind of Europe about which the noble Lord, Lord Howell, was talking. That is a Europe which at present comprises all the countries from Lisbon to the River Bug and—if the noble Earl, Lord Carlisle, will permit me to say this—if there is in the end a solution to Russia's internal problems, the European Union may be as de Gaulle would have had it, a Europe from the Atlantic to the Urals. Unless we can incorporate all the skills, achievements, talents and resources of that continent, the noble Lord, Lord Howell, is correct in saying that our place in the world, which is of great and essential importance, cannot be sustained.

Therefore, when we come to consider the meeting at Amsterdam, although many have expressed pleasure that this or that was achieved while others have expressed disappointment, particularly on the issue of enlargement, my point is that enlargement in the sense in which that word was used prior to Amsterdam is an illusion. You cannot enlarge the European Union with its structures, habits of thought, commitments (financial and other) to a larger number of countries. It is simply the realisation of that fact—not the admission of it—that has meant that people went to Amsterdam to reorganise the European Union so as to enable new members to enter, but failed to do so and will in all probability fail if they try again.

It is not simply, as some say, that the agricultural system or the structural funds need to be changed or that here and there things could be done with regard to the methods of voting or the number of Commissioners. Those points are irrelevant compared to the central fact that we have a different Europe and a Europe which, looking at the European Union, is entitled to ask, "What have those structures done for Europe so far?"

Perhaps I may take one or two minor examples. There is some splendid language in the Amsterdam Treaty. Not all of it is splendid, but some of it is alright; it is more or less intelligible if you take the trouble. There is splendid language about the freedom of movement between member states, including their dependencies. What has the European Union done to stop the persecution of the inhabitants of Gibraltar and the prevention of the right of movement of the inhabitants of Gibraltar? I have no connection with Gibraltar; I have never even been there, but it seems to me on the face of it that, if people are entitled to move freely within the European Union, the inhabitants of Gibraltar have as much claim to that right as any other people.

Perhaps I may take another example. We are confronted, as one of the possible candidates for the so-called "enlargement", with the Republic of Cyprus. The position between the two communities in Cyprus has been a tragic one which has involved this country, as a former sovereign power, in continuing expenditure of men and treasure. The international community at large has been involved. Over all these years, what has the so-called "European Union" done to bring about a solution to the problem of Cyprus? If it cannot manage Cyprus, how can it manage the vast areas of conflict and of potential conflict in central and eastern Europe? Whenever you put this body, the European Union, up against the test of something happening, it does not happen.

The noble Lord, Lord Stoddart of Swindon, referred to what might be regarded as the material problem of fish stocks. The European Union has not solved the problem of the conservation of an important natural resource which has led in the past to centuries of conflict and to differences between countries on the shores of the North Sea and the English Channel. The European Union has done nothing about it. It says that it will do something about it, but it comes up with solutions which, in fact, do nothing about it.

All right, the European Union has one achievement. The noble Lord, Lord Cockfield, is not in his place, but normally one says that the European Union has achieved a single market between its member countries. It is not a complete single market, but it is getting on for a single market and that is, of course, an important achievement. It is to the economic benefit of the inhabitants of these countries. But was it really necessary in order to make it possible without tariff or other burdens to sell something in Frankfurt that was made in Birmingham or to sell something in Edinburgh that was made in Lyon? Was it necessary to have a commission, a council of ministers, a parliament and endless documentation which, according to a newspaper report, is so detailed that members of our farming community commit suicide when faced with the task of filling up the forms? Was it necessary to have all of this? Could not a group of countries have negotiated free trade between themselves without such huge apparatus?

Amsterdam is simply another step. I do not entirely share the apprehension of my noble friend Lord Cranborne that Amsterdam marks an important twist in the ratchet towards integration, although I have no doubt that there are governments on the Continent and members of the Commission who would like that to be the case. I believe it illustrates that, unless we can free ourselves from the belief or superstition that "European Union" equals a united, prosperous and progressive Europe, we will get no further. The sadness is that a change of government in this respect at any rate has made no improvement. Having listened to the language used by the noble Lord the Lord Privy Seal, we have not even begun to grasp what we are up against.

6.1 p.m.

Lord Bruce of Donington

My Lords, the Motion on the Order Paper makes it very easy to take an acquiescent attitude to the whole debate. One is invited to note the conclusions. I hereby give notice that I have noted them. That is really all that is required of me. I assume that in due course there will be a debate on the draft treaty illuminated by 626 pages of text which are circulated with it, including all the preparatory documentation. The difficulty is that in one way or another all of these papers place responsibilities on governments, member states or—in some rare instances—the Commission itself and the other institutions. When one analyses them—it takes a prodigious time to do so—all they do is give governments powers to do certain things concerning their own citizens. Of course, the people themselves are not involved in any way; they are not consulted in advance. They give powers, such as they are, to their own parliaments, but they are not consulted about the contents of various measures that may be to their advantage or otherwise. The whole matter is rather inconclusive.

Over the years my noble friend Lord Stoddart, myself and others have pointed out that we are dealing here with institutions and the powers to be given to them. Institutions have no feelings whatever; they are inanimate bodies. They are a concept conjured up by some mortals—indeed, even politicians—to convey a general trend of thought as to what they would like to do in certain circumstances. As far as concerns the Commission, the people have no relevance whatever; it is the institutions that matter. As far as concerns the European Parliament people are not involved. The College of Questors meets regularly at the beginning of each session to decide what the allowances will be during the next year. I am informed on reliable authority (the system was not in operation when I was there) that there is an upward tendency in the remuneration of members of the European Parliament, some of whom are rarely there. It is believed that average attendance is about 100. If one includes committees it is another 200. However, the rest of the attendances are rather perfunctory, particularly among the Belgian MEPs who have other political responsibilities closer at hand. Those are the realities.

It is also very puzzling for me, my noble friend Lord Stoddart and others to determine whether and to what extent the coalition of opinion between the Opposition and the Government, or the then government and the former opposition, now holds. We already know the views of the noble Lord, Lord Tordoff, whose committee's report was published. Of the 18 members of the Select Committee three were members of the government party. That is hardly representative of Parliament as a whole. I give way to the noble Lord immediately.

Lord Tordoff

My Lords, I am most grateful to the noble Lord for allowing me to intervene. The decision as to who serves on the European Select Committee is entirely a matter for the usual channels and not the Select Committee itself. If the noble Lord has a quarrel with that, he should take it up with his own party.

Lord Bruce of Donington

My Lords, I am most obliged to the noble Lord for that clarification. My extrapolation of the point was designed exactly to elicit the correct response that the noble Lord has just given.

I shall deal with two aspects of the documents before us. the first concerns the arrangements in the new draft treaty for the provision of information to parliaments. This is an innocuous subject that I do not believe will raise hackles in any part of the House. The second matter is employment and unemployment. I believe that it was dealt with rather lightly by my noble friend the Lord Privy Seal. With the indulgence of the House, I shall enlarge upon it in due course.

In so far as concerns information, page 136 of the draft treaty states: All Commission consultation documents (green and white Papers and communications) shall be promptly forwarded to national parliaments of the Member States … Commission proposals for legislation as defined by the Council in accordance with Article 151 of the Treaty"— which is quite irrelevant to the subject, and we can leave it out of account for the moment— establishing the European Community, shall be made available in good time so that the Government of each Member State may ensure that its own national parliament receives them as appropriate". It goes on: A six-week period shall elapse between a legislative proposal or a proposal for a measure to be adopted under Title VI of the Treaty on European Union being made available in all languages"— all languages— to the European Parliament and the Council by the Commission and the date when it is placed on a Council agenda for decision either For the adoption of an act or for adoption of a common position pursuant to article 189b or 189c, subject to exceptions on grounds of urgency, the reasons for which shall be stated in the act or common position". In answer to that I say: bully for them! But this arrangement is supposed to have been in operation for the past 10 years, and it has not happened. The Commission has specifically ignored its own recommendation and will go on ignoring the existing position under the treaty for as long as it suits it.

The House will be aware that I have more than a passing interest in the European budget, having dealt with it in Brussels and, to some extent, here. Year after year—I am sure that the noble Lord, Lord Tordoff, will agree with me—we have applied to receive the European budget in English on time so that we have adequate time to consider it in both Houses of Parliament. That would normally mean that we should have it at least six weeks in advance. The noble Lord will agree with me immediately when I say that that has never been the case. What has happened year after year is that the rendition of the Community budget to the Select Committees of both Houses of Parliament has always been too late for it to be considered, because ideally the budget should have been under consideration by both Houses before our Recess. After all, it is published on 15th May. There cannot have been all that dislocation of Commissioners as a result of the British general election. It surely has not spread into the Commission colony to a point where it is completely mentally atrophied. It could have let us have it, but it did not.

This is where we come down to people, of course. It is often forgotten—I invite to this point the specific attention of my noble friend who is to reply to the debate on behalf of my party and the Government—that we are not talking of peanuts. We are talking of £3 billion net out of British taxpayers' pockets. Yet it is not even debated, and cannot be debated, within the detailed budget concept because the documents are deliberately—I stress "deliberately—withheld by the Commission from both Houses of Parliament until it is too late, within its own knowledge of our programme, for us to give any consideration to it. I sincerely hope that I have the unanimous support of the House in saying that that is not the way for the British Parliament or the British Government to be treated by an appointed Commission responsible to no one but itself, and there by our grace only. It is not the way to treat any sovereign nation, and, more particularly the United Kingdom, which has not been without responsibility for rescuing the lot of them from a greater danger in the last great war. It is not the way in which my country, or any other country, should be treated.

There are no particulars available in the detailed budget, which we do not have, about the scandal of the tobacco expenditure. There is no detail available: it should be in our hands now.

These things go right to the root of what the European Community should be about. Is a contribution net— I repeat net, after all receipts—of £3 billion per annum to be ignored completely, to be passed on the nod and to be immune from examination by this Parliament at a time when great budget stringency is announced by our own Chancellor of the Exchequer, going right down into detail and into much smaller sums with regard to health, education, and so forth?

On the employment side it will be observed that there are some new measures. They were touched upon by my noble friend the Lord Privy Seal. At page 54 the document states that, the promotion of coordination between employment policies of the Member States with a view to enhancing their effectiveness by developing a coordinated strategy for employment". So what? It goes on to specify, and I am talking about Article 2: Member States, through their employment policies, shall contribute to the achievement of the objectives referred to in Article [1] in a way consistent with the broad guidelines of the economic policies of the Member States and of the Community adopted pursuant to Article 103(2)". So the employment section is not without conditions. It is always subject to the policies determined by qualified majority under Article 103(2), which incorporates the Maastricht principles; in other words, "You can talk as much as you like about unemployment; you can do what you like about unemployment, so long as you conform to the Maastricht restrictions." Indeed, our Chancellor of the Exchequer has agreed that that is the case; that that is what is being attempted. What it really means is that the employment parts of the new treaty will be useless because they are all subordinate to a deliberately deflationary policy under the Maastricht criteria, as exemplified, and hinted at, without being specific, by the noble Lord. Lord Beloff, by the chronic 18 million unemployed in Europe—a number that is likely to increase precisely because member states are being forced, or say they are being forced, to adhere to the protocols on excessive deficits and convergence set out in the original Maastricht Treaty.

have often wondered, as perhaps other Members have, how it is that President Kohl is so sure that monetary union will come in on time? It seems contrary to all the evidence. Indeed, it is contrary to his own action, or appears to be contrary to his own action, in asking for a revaluation of the gold holdings of the Bundesbank, which has now been cast into some doubt. It also appears to be contrary to the French Government's action, apparently with the concurrence of the enarques on the Commission itself, to privatise their pension funds and then take them over again after the critical date so that they can meet the Maastricht criteria. Yet of course the Maastricht criteria are finally under the control of the Commission itself, because the Commission is, under the treaty which Members may or may not have read, the final arbiter of the statistics that are used. It is the Commission that decides ultimately the statistical basis.

Two of the deficit criteria referred to by noble Lords—notably the noble Lord, Lord Howell of Guildford, whom I would venture to congratulate on his speech because he obviously speaks with considerable knowledge of the entire subject—are dependent on the definition of what constitutes GDP. Who is in charge of determining the gross domestic product of each state or Europe as a whole against which the other more finite statistics can be assessed? I am afraid that once again the answer is the Commission.

I am also much afraid that in the final analysis one will find that the Commission has given the game away. There must be hidden aboard the Commission a Sir Humphrey, à la "Yes, Minister", because when one examines its statistical service, in particular in relation to the concept of GNP, page 53 of the Official Journal of the European Communities, published on 12th November 1996 by way of the Commission's response to the Court of Auditors 1995 report, states: The Court observes that the concept of quality as applied to the GNPs of the Member States as a whole must be seen as a combination of two independent aspects: the mutual comparability of GNP statistics and the individual reliability of each of them. The Commission has adopted a more qualified approach". It goes on to state that the Commission, does not believe that Member States should be required to harmonize their methods entirely, as these methods vary widely from country to country because of national differences (availability of sources of information) and the way statistics are organized, which is closely linked to the administrative situation in each country". It then states: The Commission feels that it would be premature to comment on the feasibility of establishing a system for measuring the reliability of GNP". The Commission, itself responsible for statistics in respect of two vital items, does not have a clue how to go about it. About 10 days before the statistics meeting the Commission will come forward with its own idea based on no study whatever which will immediately be claimed by every Europhile in this country and in the rest as being the absolute truth, whereas in fact it will be a fiddle. But then, on mature reflection and examining the documents, which I hope we shall all do, we may all reach the conclusion that the entire bureaucratic system from top to bottom in Brussels is in itself a fiddle.

6.23 p.m.

Lord Thomas of Swynnerton

My Lords, I, too, congratulate my noble friend Lord Howell of Guildford. I admired and enjoyed his speech. However, had it not been a maiden speech and therefore uncontroversial, I should have questioned his suggestion that our relations with Europe are not the most important in our foreign policy. I believe that our most important task is to straighten our relations with our European neighbours.

I speak as a Europhile, as the noble Lord, Lord Bruce of Donington, would describe me. I am an enthusiast for the European Union which, unlike several of my noble friends and in particular my noble friend Lord Beloff, I see as wonderful proof that nation states can get together and associate—even unite—many of their activities, in peace. Unlike my noble friend Lord Beloff, I see the achievement of the European Union after only 40 years as remarkable and I believe that it would have been even more remarkable had Britain been involved in the enterprise from the beginning.

However, like many noble Lords—for example, my noble friend Lady Elles and the noble Lord, Lord Stoddart of Swindon—I found the speech of the noble Lord the Lord Privy Seal a trifle over optimistic, even bland, in his description of the negotiations leading up to the Amsterdam Treaty. It is worthwhile taking up your Lordships' time in repeating that the treaty did not fulfil the main aim, which was to prepare for the enlargement of the Community not just to 20 or 21 members, as suggested by my noble friend Lady Elles, but perhaps to 25 or even 30.

My noble friend Lord Beloff may think that inconceivable, but the fact is that we members of the European nation states are committed to it. Any European state which is democratic can apply. That probably means another 15 states in the long term, which must and will be the European Union's main theme for the next 10 years. I have no doubt that your Lordships will have many debates on the matter.

In particular, the treaty fails to deal with the institutional reforms, which many noble Lords have pointed out as being necessary. I refer, for example, to the number of commissioners and the voting procedures. Agreement on that was not secured. The most important of the reforms refers to redressing the imbalance whereby at the present time the small states have an unjustifiable strength. That matter will be even more important in the future because so many small states will apply, including the state about which the noble Earl, Lord Carlisle, spoke so enthusiastically.

In history, small states have often been treated abominably by large states, and one might think it entirely justifiable that they should have their turn at the banquet of power. But retribution cannot be an effective policy for great states and something must be done about that before the next enlargement is completed.

Another aspect of the treaty which I did not like was the statement in Section 5 on flexibility, which is sometimes known as variable geometry or closer co-operation. The concept has had as many styles as did many Members of your Lordships' House at the time of the Glorious Revolution. Nevertheless, we all know what it means. That concession in legal, treaty terms could be mistaken, even if the precedent in respect of Britain at the time of the Maastricht Treaty began it. The idea of flexibility—permitting member states to create their own special associations—if taken too far could threaten the whole fabric of the constituted order that has been set up in the European Union. For example, the previous French Government spoke of the necessity for a group of countries to be the éclaireurs of the European Union, which I suppose must be the trail-blazers. Indeed, I heard an interview in which M. Delors gave his support to that idea. Surely no previous president of the European Commission would have accepted such an idea for a second.

Something else which I disliked was the long rigmarole early on in the treaty which provides that certain states can be punished if they cease to respect European Union principles. Like my noble friend Lord Cranborne, I dislike the idea of one state being excluded without being heard in its own defence. There is an implication in that very complicated and long statement that some dubiously qualified states may be able to enter. Surely that should be looked into before they are allowed to enter in the first place.

As to the confirmation of Britain's position or exclusion from the Schengen arrangements, I must say that I had a good deal of sympathy for the approach of the noble Lord, Lord Thomson of Monifieth. He regretted that we are permanently and legally distancing ourselves from the idea of a Europe without frontiers. However, I dare say that on mature reflection he may be—and I certainly shall be—comforted by the fact that our current arrangements are very easy to effect because of our geographical position; the existing restrictions at our port of entry in respect of European citizens are modest; and of course, we have a very liberal internal regime.

However, I wish to raise one question about the immigration and asylum policy. As I understand it, we are outside the European Union's policy towards that and will remain so. And yet, since we shall not wish to be thought an easy harbour and destination if, for example, there were a large influx of refugees from some regime perhaps in North Africa or the ex-Soviet Union, we should probably be obliged to shadow the European Union's policy.

I do not wish to be entirely critical. One noble Lord described this treaty as a curate's egg. There certainly are some positive elements. I believe—and I imagine that it was to this that my noble friend Lord Beloff was referring—that the list of principles in the preamble are rather good; in particular, the fair and square statement, which should go some way towards reassuring my noble friends Lord Cranborne and Lady Elles, that the European Union should respect national identities.

In addition, unlike my noble friend Lord Cranborne, I welcome Section J7 from which the noble Viscount quoted. This discusses how desirable it is to foster closer institutional relations between the European Union and the WEU with a view to the possibility of integration, should the European Council so decide. I know that that is something which is likely to shock noble Lords on both sides of the House. But the statement reminds us that a reconsideration of a European defence community, within the framework of NATO, will one day be again, as it was in the 1950s, a main concern within Europe, even though it is most improbable that the subject will be placed high on the agenda until the process of enlargement is completed.

I had wished to say something about co-decision but I am not at all sure that I understood the statements in the draft treaty, and I certainly bow to my noble friend Lady Elles with her superior knowledge of the matter. But is not the main reform in this treaty the abolition of the so-called third reading in Community legislation? On the second reading, if the Council does not approve all the amendments of the European Parliament and the conciliation committee, which would then be set up, fails to reach agreement on a joint text, that would be the end of the proposed legislation. If I am correct in my understanding, that certainly gives more power in some respects to the European Parliament. But both in this House and outside it, we have heard so many complaints about the democratic deficit in Europe that I believe we should look at this clause with generosity rather than hostility.

My chief regret is that the treaty does not include a general co-ordination and simplification of all the European treaties. If that could be written in, as I think is promised, in the final Act, then the public of the European Union would be greatly served. It is not at all clear in the minds of a great many Europeans exactly what are the purposes and aims of the European Union. As several noble Lords have entirely justly complained, the language of the treaty is almost as bad as that of the Maastricht Treaty.

Finally, as to the idea of calling for a referendum on this issue, which I know has been discussed by some who sit on these Benches, I greatly welcomed the doubts of the noble and learned Lord, Lord Howe of Aberavon, on the wisdom of taking such a step. I should be tempted to support the idea if I were being frivolous since the fairly low-key character of the treaty would probably, in my opinion, ensure a very low turn-out and so discredit the highly unparliamentary notion of a referendum. But I hesitate to make such a frivolous suggestion since I have no doubt that the consequences for the Conservative Party could easily be as destructive as was the last referendum of 1975 for the party now in power.

6.37 p.m.

Lord Bethell

My Lords, I am grateful to my noble friend the Lord Privy Seal for giving us the opportunity to discuss this important matter. I join with others in expressing my admiration for the maiden speech of my noble friend Lord Howell of Guildford. He spoke to us with great erudition about commercial and financial matters. It has made us think what a great loss he has been to another place in his elevation. I suppose that another place's loss is your Lordships' gain and another place's loss is the gain of the banking system of Switzerland. He is indeed a giant in Zurich and a very great welcome is extended to him in your Lordships' House.

A great deal of heat has been engendered by the treaty. I wonder why, because it is quite bland and a bit disappointing. It is something of a dog's breakfast—a mish-mash. Noble Lords have been tempted to pull items out of it as though they were dipping into a lucky dip and taking out this item and that item from time to time. I shall follow that example to some extent and I should like to try to answer one or two questions posed by noble Lords who have spoken.

For example, the noble Lord, Lord Bruce of Donington, mentioned the European Parliament, where I served for 19 years. It is an institution about which he has some concerns and doubts. He wondered about the allowances of my former colleagues. He will be pleased to hear that the allowances are paid to Members of the European Parliament in ecus and, because of the strength of the pound and the decline of the ecu, those allowances have gone down quite considerably. I am sure that your Lordships' allowances will not follow suit.

Likewise, my noble friend Lord Beloff wondered how on earth we had managed to reach this stage of confusion, among all the Members of the European Parliament, in the process of trying to achieve what should be a more simple goal; namely, the single market. I am reminded of the story of the apocryphal Irishman who, when asked the way to Ballymurphy said, "Well, if I was going there, I wouldn't start from here". Indeed, if we had known where we would be in 1997, we would not have started from where we were in 1950, threatened as we were by Soviet imperialism, with a devastated Europe around us. However, I venture to suggest to my noble friend and to noble Lords that considerable achievements have been made by the European Union, the European Economic Community, and its successors in recent years. We live in a happier, more prosperous and more secure Europe as a result of what the European institutions have done.

I turn now to a point which falls on the positive side of the ledger; namely, the question of papers being made available to members of national parliaments from the Commission six weeks before a matter is decided. That is fine, but such papers should be made available far sooner than six weeks; indeed, far sooner. In the European Parliament, copies of our draft laws were handed to us very often a year in advance, sometimes two years, before they were legislated on. They were then studied with some circumspection by Members of the European Parliament, coincidentally with scrutiny applied to them by the working group of COREPER.

I suggest that Members of another place and noble Lords would find it very easy to communicate with that working group through Ministers, if such documents were made available to them at least some months before a decision was made. I venture to suggest that that should be the natural way of communication. Members of national parliaments communicate through their Ministers and Members of the European Parliament have direct access to the Commission. It is the job of MEPs to deal with the Commission. They have the power to dismiss the Commission; the inquisitorial power vis-a-vis the Commission; and they have the power to obtain decent letters from the Commission within a reasonable space of time. Indeed, they have all the powers that Members of national parliaments have as regards Ministers. Therefore, I suggest that they must take that burden mainly upon their shoulders. Noble Lords and Members of Parliament should deal with COREPER through their Ministers.

I thought it was sad that, as a result of the draft treaty, we were unable to report that progress had been made on enlargement; not much progress at all over the CAP, and not much achieved over fishing. Moreover, very little has been done over the enforcement of European law and over bringing to account those who break European law, other than simply discovering that money has been stolen and ensuring that it is paid back. No system of fining or of punishing fraud has been brought into effect or is indeed envisaged. There is no system of penalties and no proper budgetary control. The only positive achievement, which was mentioned by other speakers, is the Government's jewel in their crown; namely, the progress over border controls. However, I believe that it is fair to say that that was, in essence, achieved under the previous government.

On enforcement, the only item that I want to mention in any great detail is the question of the human rights criterion which is now imposed and enshrined in the treaties and which provides for the removal of voting rights if a member state is seen to be persistently and flagrantly violating human rights. At the outset, I should like to say that it is essential for there to be a human rights code, a democracy code, within the European Union, because that is what we are really all about in the European Union, more than the single market and more than trade. We are about preserving our countries as democratic institutions and as observers of human rights.

I believe that we in the European institutions have made some inroads in that respect, despite what my noble friend Lord Beloff said. Indeed, he may be interested to know that the Swedish commissioner was in Gibraltar three or four months ago and very much took on hoard the disgraceful situation at the frontier between Gibraltar and Spain. I give way to my noble friend.

Lord Beloff

My Lords, I am much obliged. Can my noble friend say whether the commissioner did more than take it on board because, in four months, there was surely time to put the matter right.

Lord Bethell

My Lords, I admire my noble friend's optimism. However, it will take more than four months to solve the problem of Spain and Gibraltar and, indeed, the UK. I understand that considerable pressure is being brought to bear by the Commission on the Spanish Government to try to ameliorate the situation at the frontier. If my noble friend wishes, I could try to get a letter from the commissioner on the matter and send it to him, although I dare say he could obtain one just as easily himself. Alternatively, perhaps my noble friend should consult his Member of the European Parliament who will probably be able to obtain an even better letter.

The human rights criterion is now part of the Lomé Convention, the agreement on trade between the EU and African, Caribbean and Pacific countries, and has very much helped to bring about an improvement in human rights observances and non-observances in those countries. Of course, the European Parliament had to approve the entry of Turkey into the European customs area some months ago. It is monitoring the situation in Turkey very carefully. I do not believe that the human rights situation in Turkey will be solved by pressure from Europe, as such matters are never resolved in that way; indeed, it was not pressure from the European Union, from America or from any foreign country which solved many of the human rights problems in the Soviet Union. It was a combination of pressures, together with internal revulsion in those violating countries about what happened which brought about such changes for the better.

I submit that the European Union has done more that one could possibly have imagined in helping to bring about such changes. It is because of the human rights criterion set out in the treaty that we say, "Yes" to imminent Czech entry and "No", to imminent Slovak entry. We say "Soon", to the Slovenes, and to the Serbs we say, "Not for a very long time". Let that remain as it is.

As regards the concern and fear expressed by my noble friend the Leader of the Opposition, I must admit that he has a point. In the European Parliament, I remember that time after time there were attempts to twist the lion's tail by many continental groups and countries—or, let us say, attempts to indulge in a bit of old-fashioned Tory bashing by British Members on the other side. Many resolutions were flagrantly anti-British or at least anti-British Government, depending on how one looks at it. The British were chastised over the prevention of terrorism Act, over the then government's behaviour during the miners' strike in 1984, and over the hunger strike in the Maze Prison. Indeed, our whole record in Northern Ireland was looked at most scrupulously and carefully—some would say unfairly—by the European Parliament.

On the other hand, there were times when other countries were brought to account, probably fairly, over, for example, the treatment of conscientious objectors in Greece and over the lack of a right of association for the Portuguese police. They were under military discipline and unable to exercise any rights of association.

There is a possibility that the human rights issue may be used for political purposes. However, I hope that against Britain it would never reach the level envisaged in the treaty in order to bring about some commercial advantage over social policy. For all my scepticism vis-à-vis continental views of Britain—we are different in many ways; we have different histories—I do not believe that we would be taken out of the voting system of the European Union by unanimous vote; or that the European Parliament would back that up by an absolute majority and two thirds of those voting. I sincerely hope that I am not wrong on that.

I am prepared to trust a little. That may differentiate me from other noble Lords who have spoken. Do we trust our continental partners in this matter? I have a certain amount of trust. I believe that the treaty is a disappointment. However, I believe that it does no great harm. If there were to be a referendum about it—referendums are much in vogue at present—I would probably vote in favour of continuing the treaty rather than putting a total spanner in the works, and making matters worse for British interests in Europe.

6.51 p.m.

Lord Monson

My Lords, I apologise for my name not being on the list of speakers. I doubted that I could get to London in time for the opening speech of the noble Lord the Lord Privy Seal; and so, alas, it proved.

There are a number of things to commend in these documents, notably a growing if overdue realism typified by such presidency conclusions as the desirability of a reduction in overall tax burdens; the desirability of wage flexibility, taking into account regional differences and differences in qualifications; and the desirability of the reduction of the administrative burden upon small and medium-sized businesses. The new provisions on transparency are also to be welcomed, as is the modestly enhanced role of national parliaments in EU activities, referred to by my noble friends Lord Bridges and Lord Tordoff.

However, the enhanced status allegedly accorded to the principle of subsidiarity is unfortunately more apparent than real. So long as the aquis communautaire remains totally sacrosanct, there will be little scope for Community action to be restricted or discontinued where it is no longer justified". The noble Lord, Lord Stoddart, also raised the point.

One worries about the remit of the European Court of Justice being extended to the third pillar, even in a strictly limited area, because it is the thin end of the wedge. It is right that your Lordships' Select Committee should have opposed such an extension in 1995.

The new Article 6a, outlawing discrimination on the grounds of age, religion, belief and sexual orientation, among other things, is a potential minefield as well as being somewhat hypocritical, since the Commission practises age discrimination by reserving a certain number of jobs for those aged 35 and under.

I have three questions of the noble Lord, Lord Whitty, who will reply. First, why did the Government agree to any extension of qualified majority voting on health matters given that so-called health considerations have been misused time and again to the detriment of this country? Surely health matters should be reserved for national parliaments, except in those happily rare instances where animal or human epidemics cross national frontiers.

Secondly, can the noble Lord give any specific examples of how the extension of qualified majority voting to research and development could be of any positive benefit to the United Kingdom?

My third and final question relates to the new Article K.2 concerning Europol which encourages, the operational actions of joint teams", somewhat ambiguously. Can the noble Lord give an assurance that Europol will have no independent power of arrest or detention, and that Her Majesty's Government will not support any effort to allow national police forces to be given the automatic right of hot pursuit across frontiers, as demanded on a number of occasions by the Germans above all?

6.55 p.m.

Lord Moynihan

My Lords, I, too, begin my speech by congratulating my noble friend Lord Howell. He made a characteristically incisive and effective speech, warning your Lordships of the possibility of currency storms ahead, and in many ways admirably underpinning the notes of caution expressed by the noble Lord, Lord Barnett, on economic and monetary union, while remaining subtly non-controversial—a rare and commendable characteristic of a hugely impressive maiden speech.

Before an unexpected visitor to the House sought leave to speak earlier today, I had a vision of Sir James Goldsmith towering above the press box and seeking to intervene in the debate. Sadly in the interests of balance, that was not to be! However, we have heard many views today, not all of which are in agreement, in a debate of remarkable breadth and depth, which I have come to expect in your Lordships' House.

I should like to seek assurance today from the Minister that there will be ample time allotted in this House—a point made by the noble Lord, Lord Stoddart—to debate the Bill in preparation for ratification when it is introduced. Perhaps the noble Lord will be able to give us a clearer idea of the timetable. That is particularly important in the light of those areas which necessitate constitutional change. Taken as a whole, the treaty raises more questions than it answers, not least whether the Prime Minister is now content to be isolated in Europe since he alone of all his European colleagues seems wholly satisfied by the outcome.

I should like to start with the broad areas of consensus between the Government and Opposition where we shall continue to lend our support. Indeed, there is much in the Treaty of Amsterdam with which we are in agreement. I can offer our full and unqualified support for the Government's success in retaining sovereignty over Britain's border controls through the legally binding protocol to the treaty, although I must add that our support on that is not surprising in the light of the agreement reached in March when a British opt-out was first agreed in principle. Likewise, our support is forthcoming for the protocol to entrench subsidiarity and for the rejection of proposals to give the European Union an explicit legal personality. On those areas I am also happy to be able to congratulate the Government on a seamless transition of policy on Europe.

However, it seems that the genes of disappointment, cynicism, expediency and dispute so apparent between some of the leading member states at the summit were inherited by its child, the Treaty of Amsterdam.

On enlargement, the Government have our full and unqualified support to pursue the goal of enlargement which, when in Government, we continued to champion through practical assistance such as improving market access for agricultural products and disbursement of Know-How funds. The Government gave us every reason to believe that the United Kingdom would continue to be one of the foremost advocates of enlargement at the conclusion of the IGC, which, after all, was meant to be internal housekeeping to clear the way for the dual challenges of enlargement and further competitiveness. It is in that sphere that the treaty is most visibly lacking. If there was ever a raison d'être for the treaty, it was the acknowledgement that Europe does not end at the Elbe and that institutional changes and reforms were necessary to pave the way for enlargement.

We rejoiced when the Berlin Wall came down eight years ago. Ever since then, the new democracies of central and eastern Europe have been promised membership of the same club which has benefited their western neighbours so greatly: the European Union. We have a historical obligation to these countries to fulfil this promise and to extend to them the means to assist stability and consolidate freedom so that future generations of children and grandchildren may enjoy greater security and prosperity than their parents and grandparents ever dreamed was possible. However, I fear that today's parents and grandparents in central and eastern Europe do not yet share the Foreign Secretary's perception of a restored sense of "purpose and dynamism"; nor do they share the Prime Minister's view of a post-Amsterdam Europe that is, "more relevant and attuned".

Enlargement is more important and relevant to the livelihoods of people in this country and across Europe than any processes of centralisation. True, it will fundamentally change the nature of the European Union and, as many noble Lords, not least the noble Lord. Lord Tordoff, mentioned, will involve root-and-branch reform of the European Union's institutions and practices. The recently published Commission document, Agenda 2000, contains proposals for reform of the common agricultural policy and the structural funds, and for future financing arrangements for the Union after the current budget arrangements end in 1999, with a view to enlargement from 15 to at least 21 members by 2004.

The issues of whether these reforms go far enough and the implications to Britain of compensation and modulation in CAP reform, the size of British contributions in the European Union budget in the future and the fate of Britain's rebate, which has saved the British taxpayer £18 billion since it was negotiated, must be left to a future debate.

But Agenda 2000 or not, it is clear that the European Union cannot afford to enlarge as it stands at present, financially or administratively. I should therefore like to ask the Minister why, when prior to the summit the Government were confident that they would return with the key institutional reforms necessary for enlargement, Article 1 of the "Protocol on the institutions with the prospect of enlargement of the European Union" simply restates the requirement to re-weight votes in the Council and to adjust the present number of commissioners. That prerequisite has been apparent since the previous enlargement, in 1995. It hardly represents progress on enlargement to return from the summit with no further agreement on those key measures.

Since the protocol effectively postponed the issue of reform of voting weights and Commission size until a new member is on the threshold of joining, will the Minister tell the House whether a further inter-governmental conference will be needed to enact the necessary treaty revisions as indicated in Agenda 2000, which proposes a further IGC to, deepen political integration and reform Europe's institutions before enlargement takes place"— interestingly enough, with an objective of the, generalised introduction of qualified majority voting"? The process of enlargement will not be easy. There will have to be compromises and sacrifices on the part of all member states. But if we compound the message sent from the summit that the power struggle between existing members is more important than any promises to help the people of Poland, Hungary or the Czech Republic, then history will not judge us kindly.

Perhaps it is not surprising that this treaty, concluded in a difficult atmosphere and with language being prepared in an artificial attempt to paste together the deep divisions that existed, not least between France and Germany, resulted in an uneven text of compromises and concessions to special interests. Britain takes over the presidency of the Union at a crucial time in its history, when an enlightened view of national interests and sovereignty will allow Europe to prosper and expand, while the alternative is to turn inwards, fragment and wither.

I should like to address briefly the issue of quota-hopping, which is of such importance, not least outside the House, and the Government's much-vaunted solution to the problem. It is simply this. If the Government have achieved such a good deal on quota-hopping for Britain's fishermen, why did the chief executive of the National Federation of Fishermen's Organisations describe it as a "hopelessly inadequate fudge"?

What "very tough" line did the Prime Minister take to defend the interests of British fishermen, other than to obtain a letter from the Commission that restates the existing situation, confirming Britain's rights to issue licences that require a percentage of fish to be landed in this country? Britain's fishermen know their rights. They need help from the Government to enforce them—help that was promised. That promise appears to have been broken, unless the Minister can guarantee that, in a legal challenge from Spain, which has won four European Court rulings defending its rights to buy access to British quotas, the Commission will unequivocally support Britain. This is the same Commission that agreed to Spain's demands that quota-hopping should not form any part of the treaty's negotiations.

On the subject of flexibility, this new clause allows member states to pursue a form of fast-track integration on the basis of a qualified majority if they wish to do so. There is clearly a paradox when it comes to the question of flexibility. For the European Union to fulfil its potential, it must adhere to certain core disciplines and obligations, which must not be undermined by the introduction of flexibility. However, Europe's strength is in its diversity, and some flexibility must be not only allowed but encouraged, particularly as the Union enlarges.

However, one thing is clear in this paradox. Whatever jargon is used to describe it, be it variable geometry, differentiated integration, Europe à la carte, multi-speed Europe, enhanced co-operation, concentric circles—although your Lordships would be forgiven for imagining ever-decreasing circles—flexibility must not be the foundation for a two-tier Europe, whereby an exclusive, fast-track hard core of member states lay claim to a privileged status over which the rest have no real check. For that reason, I should like to ask why the Government did not insist on a watertight veto, so that the instigation of such projects of "closer co-operation" could be decided by unanimity, irrespective of which member states then implemented them.

Does Article 1 of the flexibility clause enable groups of European Union states to use European Union institutions for what amounts to purposes for which there is no explicitly stated treaty provision? Is it not a fundamental British position that access to European institutions should be agreed by all, since they are paid for by all? Furthermore, will fast-track countries be entitled to European Union funds for their projects? If so, this clause does not seem to deliver in any way the more democratic Europe so recently promised by Jacques Santer.

In conclusion, Europe has much to offer to all of us. It has the potential to be an economic powerhouse which draws upon the energies, the identities, the sheer diversity of its member states to become far more than the sum of its parts.

I hope that the Government will use Britain's presidency as an anvil to forge a stronger Europe, a Europe that is outward-looking, that is both cohesive and expansive, a Europe within which we can shape our national destiny through a strong and effective partnership of nations. Perhaps this may undo some of the deficiencies of the treaty, which does little to widen Europe but much to disable it.

7.8 p.m.

Lord Whitty

My Lords, we have had a fascinating debate. It did not quite live up to the excitement provoked at the beginning by the noble Lord, Lord Thomson of Monifieth. Nevertheless, many contributions have reflected the long-standing and deep experience of European matters among those present in this House. The debate was graced by an excellent and thought-provoking maiden speech by the noble Lord, Lord Howell of Guildford. I look forward to hearing the noble Lord's contributions on this subject and other matters.

Parts of the debate have been both exhilarating and instructive; others have been rather depressing. At times I felt I was in something of a time-warp. We have moved on in regard to Europe. We no longer have to be obsessed with the divisions within the Tory Party. We no longer have to be concerned about the fundamental issues as to whether we are in or out of Europe. Our concern here, and in the treaty, as my noble friend the Lord Privy Seal said, lies with practical policies for bringing Europe into the 21st century.

My noble friend the Lord Privy Seal has been criticised for being rather too upbeat about the Treaty of Amsterdam, while almost everybody else has regarded is as a bit low key or a bit of a damp squib. I think he was about right. He said it was a good result. He did not say it was the greatest match ever. But it is, in my view, a good result.

The Treaty of Amsterdam is not the most exciting point in European history, but maybe we have had too many exciting points recently. It is inevitably a compromise and there are some loose ends, particularly as regards the institutional formulae that have been talked about; but, in general, it reflects a new realism in Europe. The grandiose schemes which were being talked about in some circles in Paris, Bonn and Brussels two or three years ago have been discarded. We have, as the noble Lord, Lord Howe, said, a less high-flown treaty. We have a practical treaty which reflects the need to concentrate on key areas, which makes easier and more effective some of the decision-making and enforcement procedures of the European institution and which goes at least some way to prepare for enlargement, although I concede that it does not go as far as many of us hoped it would.

Moreover, we should recognise that it is a treaty which, thanks to the tone, approach and preparation of the new Government and the negotiating skills of my right honourable friends the Prime Minister and the Foreign Secretary, recognises that Britain and the British Government are now truly back at the heart of European affairs. Amsterdam saw the UK make a fresh start. We negotiated with our partners and not against them, and we have significant achievements.

First, our positive agenda for Europe on jobs, the environment, openness and the fight against fraud and discrimination has been achieved in this treaty.

Secondly, without stopping our partners who wish to go further on frontiers than we do, we have achieved legal security for our own frontier controls and we will now decide, and will have legal security in deciding, our own immigration, asylum and visa policies.

Thirdly, we have maintained the ability of the UK to defend its interests where we said we wished to defend them by maintaining the unanimity provisions on treaty changes, finances, tax, defence and foreign policy. But we have accepted that there are many areas where an extension of majority voting is helpful.

Fourthly, we have resisted the Franco-German moves to extend the European Union to become a defence organisation; and the only way in which that could go further would be by unanimity. I think we have achieved quite a lot in this treaty.

I should now like to reply to some of the points raised by noble Lords. First, we had from the noble Viscount and others what has now become a bit of an old chestnut about the social chapter and its costs. The Government make no apology for signing up to the social chapter. We did so as a matter of principle because we felt that being outside it reduced our influence within Europe and that British workers should receive at least the same protection as other workers within the European Union.

The idea that this will reduce our competitiveness is a complete canard. None of the provisions in the social chapter, likely or actual, impose serious costs on British business. Moreover, a competitive economy must invest in its own workforce. A flexible labour market, which we all want, depends on improving the employability of its workforce, not on forcing down in a competitive way the basic conditions of work. That is what the social chapter is about. Where it offends British interests we will not vote for it; but, where it enhances both our competitiveness and the rights of our workers, we believe it is a necessary part of the social dimension of Europe.

I would say the same about the employment chapter, which my noble friend Lord Bruce raised in a slightly critical way. I agree to some extent that the words do not in themselves create jobs. But I think that there are measures provided in other parts of the treaty which we can take in order to create more jobs and tackle the problem of 18 million unemployed within the European Union. I would not agree with my noble friend that these provisions are useless. They establish for the first time in treaty form the importance of tackling unemployment and put it on the same level as the other economic objectives in the treaty.

On the question of frontier controls, we heard two different views. Lord Thomson regretted that we were not able to go along with our 13 partners in this respect. But we have a different history, a different geography, a different administrative system and a different pattern of migration, and I think it justifiable to maintain the position which we promised at the election to maintain.

We have secured legal certainty for our frontiers in the treaty, about which other noble Lords were concerned. We have also successfully resisted attempts to give the European Court of Justice the ability in this area to intervene in immigration cases brought before the UK courts. But we have also secured the right to opt back in should we wish to do so on any EU co-operation on immigration and asylum matters when we consider it to be in the national interests. We have also ensured that the UK can continue to play a full role in EU co-operation, including police co-operation, directly or through Europol, to fight international crime, drugs and terrorism. Those are very important aspects of the treaty but they are—and will continue to be—essentially intergovernmental issues.

The other great chestnut is the extension of majority voting. Again, we make no apology for promoting the extension of majority voting where we judge it to be in our interests to do so. Indeed, we have long signalled our intention to do so and were criticised for that by the Opposition, then the government, during the election period.

For example, we have advocated and achieved QMV for measures to combat fraud. If every country had a veto over fraud measures, how would we ever ensure proper sanctions? We also promoted majority voting in R&D, about which the noble Lord, Lord Moynihan, asked me. Some British universities and some parts of British industry benefit disproportionately from the R&D budget, but some of those benefits have been blocked by others exerting vetoes on us for extraneous reasons. The development of QMV in the R&D field, as in the field of openness and transparency, will greatly benefit British industry and universities.

We would have liked to extend majority voting in certain other areas, including environmental policy, but we believe that a balance was achieved at Amsterdam.

It is surely ludicrous to maintain, as the noble Viscount, Lord Cranborne, and others seem to do, that any extension of QMV ought to have been resisted. That was not the view of the Opposition, then the government, when they signed the Single European Act; it was not the view of the Opposition, then the government, when they signed the Maastricht Treaty, which extended QMV to 30 different articles of it.

As far as the Single European Act is concerned, the noble Baroness, Lady Thatcher, later claimed—or it was claimed on her behalf—that she was misled. I do not believe that to be the case. It is unlikely that on that one issue she succumbed to the silken arguments of the Commission and the Foreign Office. I believe, rather, that she saw at that time that it was in the interests of Britain and of Europe to develop the single market. Almost everybody, including even the noble Lord, Lord Beloff, has come to appreciate that the single market is a major achievement for Europe. She was right then, and we are right now, to accept that in some areas majority voting is right.

There can be no validity in any claims that the Labour Party betrayed Britain's interests in signing the treaty. The outcome of Amsterdam is very much in line with the negotiating position outlined in the Labour Party manifesto at the general election. I say that with particular feeling since it was the one part of the manifesto in the drafting of which my honourable friend, now the Minister without Portfolio, allowed me to have some influence. We stuck to that manifesto, and the outcome of Amsterdam is very close to it. The Opposition would do well to come to terms with the fact that the general election was, as much as anything else, a decisive rejection of their attitude towards Europe.

Noble Lords

Hear, hear!

Lord Whitty

My Lords, of the 306 Conservative candidates who put their names forward for the Daily Mail's Euro-sceptic battle for Britain, 234 were rejected by the electors of Britain on 1st May. The Labour Party received an overwhelming mandate for its position on the intergovernmental conference and the rather bizarre call now by some elements on the Front Bench opposite—though I notice that it was not repeated by the noble Lord, Lord Moynihan—for a referendum at this point cannot be accepted. Nobody in the Conservative Party called for a referendum on the much more far-reaching provisions of the Treaty of Maastricht.

Perhaps I may now come to the area of foreign and defence policies. The noble Viscount objected to the decision-making process proposed. He opposed the concept of constructive abstention. I thought for a moment that he opposed it simply because he thought that it was a French invention, but he has either probably mistranslated or misunderstood the provision.

Constructive abstention only applies in a system of unanimity in those areas where unanimity is still provided by the treaty. That decision is at the discretion of the member state. If a member state truly feels that its central national interest is threatened, it would vote against and therefore prevent that aspect of common foreign and security policy going ahead. However, if it feels less strongly about it, it can engage in constructive abstention. That is a very sensible way forward for the development of foreign and security policy which has been seriously lacking in Europe, with tragic results, as we have seen. There has been a lack of co-ordination between the great powers of Europe on, for example, Bosnia and, more recently, the Great Lakes situation. The decision-making improvements on common foreign and security policy are vitally important.

So far as concerns defence, I said that we resisted the Franco-German proposals in that area and any extension of the EU proposals to take over the WEU would require unanimity. Therefore, we are in exactly the same position in real terms as we were after the Treaty of Maastricht, which was, of course, supported by the party opposite.

I come to the democratic aspects of the agenda, which some noble Lords have queried. The noble Lord, Lord Bruce, in particular, was concerned about scrutiny by national parliaments. The noble Lord, Lord Tordoff, and his committee, to whose work I pay tribute, have long sought a longer period of consultation for national parliaments. We have achieved that with a minimum six-week notice period. I trust that that will be observed. The noble Lord, Lord Bruce, rightly pointed out some difficulties in that and there are particular difficulties relating to the budgetary papers. I hope that we shall tackle those. For the first time in a treaty we have included that provision, which, to a large extent, was initiated by a committee of this House.

Democracy for us on this side of the House and accountability to European institutions do not include just national parliaments but include also the European Parliament. I was glad that the noble Baroness, Lady Elles. who was concerned about some aspects of the Parliament, nevertheless underlined that point, as did the noble Lord, Lord Bethell. I believe that it is right that the European Parliament should effectively control the actions of the Commission and the Council when it acts collectively. The national parliaments must be the bodies which control the actions of their Ministers in signing up to agreements within the Council of Ministers.

The European Parliament's legislative role has been enhanced, as noble Lords said, by extending the co-decision procedure. We believe that that is right and we support it. We also supported streamlining of the co-decision-making procedure.

More recently, on 17th July, we announced our intention to legislate in the current Session of Parliament for the use of a regional list of PR for the 1999 Euro-elections. I say to my noble friend Lord Stoddart that consultation on that issue has been the widest consultation of all. After all, it was put to the electorate in our election manifesto. Indeed, it has been Labour Party policy since 1993, I think—I should know the date and I am pretty sure that it is correct—when we agreed to the proposal in the report put forward by my noble friend Lord Plant of Highfield. Not only will that improve the representativeness of the British contribution to the European Parliament; it will also increase the legitimacy of the European Parliament as a whole, in which the distorted British contribution has sometimes been queried by other member states.

There are other aspects of democracy which have been improved; openness and transparency; references to the Committee of the Regions made by my noble friend Lord Ponsonby; and the human rights issue, which the noble Lord, Lord Bethell, correctly represented in the first part of what he said, although I think that he got slightly lost on the procedure thereafter. We need to ensure that there is a fundamental part of the treaty which says that only democratic states and those states which remain democratic can be party to the European Union.

At one stage in the debate I thought that I would not have to deal with the tortuous area of flexibility, but the noble Lord, Lord Thomas, raised that matter in his contribution. To some extent, it was the dog that hardly barked during the Amsterdam process. But the form of flexibility that we have agreed is relatively limited. It is flexibility by the consent of those who do not choose to participate in the enhanced co-operation that is proposed. There are a number of barriers to it. It cannot undermine the single market and it cannot undermine the acquis communautaire So, we have avoided the possibility of a two-tier Europe, a hard core Europe, a concentric circles Europe and whatever other form of geometry was threatened before the Inter-Governmental Conference.

Of course, there were some failures. We failed on the institutional side to agree the size of the Commission or the reweighting of votes. But we came close to agreement. The noble Lord, Lord Moynihan, asked me why. One slightly flip answer is to say that we did not reach that item until four o'clock in the morning. It may be that the heads of government of other states were not quite as alert at that point as my honourable friend the Prime Minister. I agree to some extent with what the noble Lord, Lord Stoddart, said about the ludicrous way in which such vitally important strategic decisions are sometimes taken. But we were close to agreement. I do not believe, whatever is said in Agenda 2000, that we shall require a full-blown IGC to put that right before enlargement. We shall need some new decisions on reweighting and on the size of the Commission before enlargement takes place. But that will not involve totally rewriting the treaty.

There were certain other items which are not strictly treaty issues and with which I suppose that I should briefly deal. Let me just say a quick word about ratification. Following certain technical amendments, we expect that the treaty will be signed formally in early October. After that, primary legislation will be needed before the UK ratifies it. We anticipate that a Bill will need to add to the list of Community treaties in the European Communities Acts all those parts of the new treaty, including the new protocols, except for those which deal purely with intergovernmental issues. So, the noble Earl, Lord Carlisle, will be gratified to know that we shall have substantial debates on the treaty in this House before ratification.

I turn to the non-treaty issues which were raised. I do not believe that I have the time to deal with the whole issue of enlargement, which requires a separate debate. I shall not say much about monetary union either. The noble Lord, Lord Thomson, said that the Chancellor was full of surprises but I do not intend to spring any on his behalf tonight. The Government's position is known. It is unlikely that we shall be ready to join a single currency in 1999, but we will keep the options open. That remains the position. If we decide to go in at any time, we shall have a referendum on that issue.

On quota hopping we have achieved some measure of improvement by an agreement with the Commission in Amsterdam. We can now specify and enforce the economic links. We can now specify and enforce the rules which will ensure that benefits flow to our fishing communities. We will now have an assurance from the Commission that the review of the common fisheries policy after 2002 will take into account the particular position of the British fleet. We have held talks with the fishing industry on all these matters and it is aware of that position. It welcomes the progress that has been made, although it does not regard it as sufficient. Obviously, it is not entirely satisfied.

But I have to ask where the blame rests for that situation. We made some progress in Amsterdam, after all. But the inherited position was rather appalling.

There was a chapter of failures by the previous government: failure in the original common fisheries policy; failure to modify in the light of the accession of the Spanish and the Portuguese; the allowance of under-performance years on which to base the quota figures; failure to agree on how we distribute licences in order to avoid selling on the licence when the boat is sold on; failure of the previous Government at that time to pick up the money that the EU had on the table to subsidise decommissioning, so that the attraction of buying licences from foreigners or agents for foreigners was that much greater; failure to recognise that the UK regulations, such as they were, would be challenged on their basics before the European Court of Justice; and failure to have any alternative fall-back position when the inevitable decision came from the Court of Justice. Instead, we had a foolish and, frankly, counterproductive threat by the last government to sabotage the whole IGC process if we did not get agreement to a protocol, for which we had no support whatsoever in any single EU state.

The fishermen of Britain have not been well served by the previous government. Frankly, we had to make the best of a bad job and we have made some progress. At least it is progress and not empty rhetoric.

One of the strongest and most positive things to say about the IGC process is that at last it is over. The obsession with institutional minutiae has distorted the debate about Europe for too long. Despite what the noble Lord, Lord Beloff, said, I believe that the European Union and its predecessors has had great achievements. We now need to take those forward into the next century. We can concentrate on the vital areas that Europe needs to address: enlargement; reform of the CAP; a new financial secretary—at least financial settlement; and, of course, monetary union.

Underlying all that is the competitiveness of Europe, the unemployment situation in Europe, the completion of the single market and the fight to protect the global environment. All of those will be challenges to the British presidency in only six months time. But with the normalisation of our relations with Europe that Amsterdam represents; with a realism about Europe's ambitions; and with the UK now back at the centre of Europe and the British Government looked to by our partners as a source of leadership and not a source of problems, we are confident that we in that presidency can rise to that challenge. I commend the Motion to the House.

On Question, Motion agreed to.

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