European Communities (Amendment) Bill

HL Deb 27 April 1998 vol 589 cc12-76

3.7 p.m.

Lord Whitty

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.—(Lord Whiny.)

On Question, Motion agreed to.

House in Committee accordingly.

[The PRINCIPAL DEPUTY CHAIRMAN OF COMMITTEES in the Chair.]

Resumed debate on Clause 1: Amendment No. 10.

Lord Bruce of Donington

The Committee will recall that Amendment No. 10 deals specifically with the items set out in the new Title VI on page 29 of the Amsterdam Treaty, to which, with the Committee's permission, I should like to refer. There can be no question that this section of the treaty puts unemployment on the agenda. But to be on the agenda is quite insufficient to deal with the situation that currently confronts us. At the moment there are 19 million unemployed people in the European Union and the figure is rising, if account is taken of the United Kingdom statistics which, presumably, are to be corrected. The figure will rise to probably 20 million.

On previous occasions—and I do not propose to do so this afternoon—I have drawn your Lordships' attention to the undesirable economic and social effects of large-scale unemployment developing in Europe. Those of us who have memories that go back before the last war will know perfectly well that the rise of fascism in Europe, and Nazism in particular, were powerfully assisted by large-scale unemployment at that time. That produced considerable unrest and resulted in the formation and strengthening of the Nazi movement in Germany with consequences of which we are all well aware.

So it is only right and proper that, with unemployment developing in Europe on the existing scale and showing no signs of diminution—in fact, rather the reverse—those who participated in the deliberations leading up to the adoption of the Treaty of Amsterdam were bound to have that consideration in mind.

Members of the Committee will see from new Title VI that adequate testimony is paid to this subject. For example, Article 1090 refers to, Member States, through their employment policies, shall contribute to the achievement of the objectives referred to in Article 109n", which is the previous article. That states, Member States and the Community shall … work towards developing a coordinated strategy for employment". Article 109o, paragraph 2, continues: Member States shall have regard [to] promoting employment as a matter of common concern". Article 109p states: The Community shall contribute to a high level of employment by encouraging cooperation between Member States". Perhaps more importantly, paragraph 2 of the same article states: The objective of a high level of employment shall be taken into consideration". Article 109q says: The European Council … shall each year draw up guidelines which the Member States shall take into account"— I put the words "shall take into account" in parenthesis for the purposes of my present argument— in their employment policies. These guidelines shall be consistent with the broad guidelines adopted pursuant to Article 103(2)". So no one can say that adequate consideration was not given to the matter.

The trouble is that at best consideration of the problem of unemployment, shall be taken into consideration", whereas the situation in Europe requires that it should be a principal priority at this time, affecting as it does the lives and fortunes of thousands of people in each of the member states, including our own. Politicians are prone to announce very good intentions. I speak in terms which I trust represent broadly consensus politics across the Chamber because consensus politics are very much in vogue these days. No one can query the sentiment which, for political purposes, is given wide circulation in the press and the broadcasting media. But the question is: what is to be done about it? It is not simply a question of having regard to the situation.

Members of the Committee may suffer a variety of emotions from time to time. We all know what "taking into account" means as distinct from forming a firm conviction leading to a springboard to action. I can sympathise, and I trust that your Lordships will also sympathise, with members of the Government and the Opposition—I believe in consensus politics for this purpose—who may have had the utmost good intentions.

The difficulties are the factors which diminish the prospects of employment. They are not merely matters to which some regard has to be paid. They appear in the Maastricht and Amsterdam treaties. Those treaties lay down economic formulae against which there is no argument. We have abdicated that responsibility; it has gone to the Bank of England. There is no argument as to what has to be done. All these matters are laid down.

We must have regard to the mathematical formulae set out in the Maastricht Treaty; we have to look to deficit financing as well. We have also to consider the recent deal as regards economic and mathematical formulae enshrined in the stability pact. In other words, our hands are already tied by treaties to which we have put our signature and which, in accordance with the procedures normally adopted in the Community as a whole, are now enshrined in our own law.

Members of the Committee will be well aware of the numerous fudges which have taken place over the past few weeks in forcing member states, sometimes successfully and sometimes otherwise, to adopt the deflationary policies which are quite explicit in the Maastricht Treaty and in the stability pact. These are the actualities of the situation rather than the aspirations which we might legitimately have, bearing in mind the humanities and social policy generally.

So we are in some difficulty. I trust that neither my own Government nor those who have a consensus with them on the other side of the House will seek to cast these matters aside or try to prove that, after all, Maastricht meant nothing and that the deflationary policies originally set out in the Delors Report and in the European Agenda 2000 can be lightly cast aside. They are part of our daily lives. Due to other factors which are not relevant for the purpose of this amendment, but which many of us hope to discuss later, they are not subject to democratic control either.

We are caught completely outside the variations that could be made to policy as a result of democratic considerations of these matters. We are, literally, in the hands of the machine—and it is a machine which is being administered effectively on matters on which I hope to be able to enlarge later which ensure that the will is enforced. We are in the midst of deflationary policies which will be pursued with the utmost ruthlessness and which make any consideration—sympathetic or otherwise—of the solutions of the unemployment problem a mere exercise in academics, which I am sure will please those academics who may be present this afternoon.

Lord Moynihan

Before turning to some of the important issues which the noble Lord has raised, we on these Benches would like to wish the noble Lord, Lord Shore, a speedy recovery from his illness. Having heard the noble Lord speak earlier at Committee stage, it strikes me that he must be well below par to be absent from our proceedings today. It would have been his deep desire to participate. All of us—those who echo his words as well as those who oppose them—recognise the significant contribution that he has made to date to our Committee proceedings. I know that all noble Lords wish him well.

After a brief introduction to the important issues which we shall be debating in these amendments, I intend to focus on the employment chapter in order to enable other noble Lords to reflect on that chapter. Then, with the permission of the Committee, within the same group of amendments, I should like to consider the social chapter in detail. The reason for that is that the Amsterdam Treaty marks the point at which this Government became full signatories to the European social model, composed of the social chapter and the new employment chapter. In our view, that provides for a centralised European employment programme. This is an area where the Opposition accept that the Government were not negligent in their negotiations at Amsterdam but rather deeply misguided. On this issue, we are in genuine disagreement and that is why I have tabled an amendment and new clauses to oppose both measures.

On these Benches, we believe that there is an inherent contradiction between the social chapter and the employment chapter, on the one hand, and the needs of a competitive, flexible economy, on the other, but apparently the Government do not think so. Perhaps the Government do not recognise that contradiction because, collectively, they share the opinion of the Minister of State in another place, who has confessed, perhaps in another example of truth spoken in jest of which this Government are so fond, that he does not believe statistics. He said: I had the misfortune to study economics for four years. That experience taught me never to believe statistics".—[Official Report, Commons, 12/11/97; col. 998.] That presumably helps to suppress the inconvenient facts that we have signed up to the European Social Model exactly at a time when unemployment is falling in the UK and rising in the rest of Europe; that one-third of all investment into the EU flows into the UK; and that Britain has created more jobs in the past four years under the previous government than all the major countries of Europe put together.

Since 1992, the UK has enjoyed the longest and strongest recovery of any major European country. I should point out that unemployment in the UK is significantly lower than the EU average and is lower than in Germany, France, Italy, Spain, Belgium, Greece, Ireland and Sweden. The UK has a higher proportion of its working age population in work than any other major EU country. The UK has the lowest labour overheads in the EU. For every £100 paid in wages, employers must add non-wage costs, such as employer's social security contributions and health insurance, of £32 in Germany; £34 in Spain; £41 in Italy; but only £18 in the UK.

The strike rate in the UK has been lower than the EU average for each of the last nine years. Over the last international economic cycle (1982–93) fixed investment growth in the UK was more than in any other major European economy. The burden of tax, public spending and public debt in the UK is lower than in any other major European economy. Over the past 20 years, that story has been underpinned by the fact that the United States has created 36 million new jobs, of which 31 million were in the private sector. Over the same period, only 8 million jobs were created in the EU, with no increase in private sector employment.

Taken individually, any one of those points would make a compelling case. Taken together, they conclusively prove that unless Europe cuts its social costs and frees up its labour markets, it will be outpriced and outperformed by the rest of the world, ensuring that the unacceptable levels of employment and unemployment persist. Red tape and regulation are a regime that Europe can no longer afford to keep in place.

Does the Minister disagree with that scenario? Does he feel that we should apply a strong socialist employment policy on top of that success story? Does he believe that marginal differences in price, quality and delivery can make all the difference between winning orders and losing them; between creating jobs and destroying them; and between building prosperity and undermining it in the global economy; or does the Minister agree with the Minister of State in another place who apparently discerns no link between competitiveness and the social chapter, for he said: Competitiveness is a different issue [from the social chapter], about securing products, new designs, new production systems and breaking into new markets"?—[Official Report, Commons, 4/12/97: cols. 566–7.] Many of us on this side of the Committee are greatly cheered by the Government's seemingly wholehearted conversion to the principles of labour market flexibility, competitiveness and open markets and fewer burdens on business. But we only hear those comments; we do not see them echoed in policy when it comes to the adoption of the employment and social chapters by this Government. I fear that once the rhetoric of the social chapter is stripped away, the best result for the Government would be an empty page.

Agreement in principle with our European partners on the need for job creation will be very different from agreement in detail on how to achieve that goal. That will not come easily, and although it is most commendable, the practical conversion of some of our European colleagues to the new orthodoxy of the past four years may require a road to Damascus to achieve it, particularly bearing in mind that the Prime Minister of France, Lionel Josping was elected on a platform of cutting the working week.

From these Benches, it will come as no surprise to hear that we agree without reservation that creating the right climate for jobs for Europe's 18 million unemployed people should be one of Europe's highest priorities. Unemployment is Europe's worst disease. Job creation should be a priority for Britain's presidency.

I should like the Minister to give the Committee one concrete example of how he expects measures under the employment and social chapters to increase labour market flexibility and competitiveness and to create jobs. I doubt whether he can guarantee that no jobs will be lost as a result of those measures. However, I shall listen carefully to what he has to say on that because I should like to consider the implications of the measures introduced by the employment chapter. The treaty may, for the first time recognise that employment and growth result from the flexibility that comes with skills, not the inflexibility that comes with over-regulation". But how many jobs will that create? How many jobs were created in Europe as a result of the Prime Minister's so-called employment summit last November?

Treaties, summits and governments do not create jobs. It is businesses, entrepreneurs and risk takers free from the burden of bureaucracy who create jobs. Creating the right conditions for employment is primarily a national responsibility. No one should pretend that jobs can be willed into being simply by legislating for them in a treaty. The key to creating new employment in Europe is to improve competitiveness and productivity and strip away unnecessary regulation. It is on this stage that the UK should have a leading role to play in Europe. The implementation of British ideas and strategies for success should be at the top of the European jobs agenda.

I have some specific questions on those articles of the treaty that deal with the employment chapter and make member states' employment policies a matter for common concern. Article 109p, paragraph 2, establishes the objective of a high level of employment as a consideration in formulating and implementing Community policies. Can the Minister tell the Committee what common figures member states have agreed upon to define a high level of employment? Could this have future implications for the single currency, given that the Maastricht criteria do not take into account unemployment figures? New Article 109r in the employment chapter allows the adoption of incentive measures designed to encourage co-operation between member states on the basis of Article 189b; that is, the co-decision procedure involving the European Parliament and qualified majority voting. Can the Minister tell us of what these incentive measures might consist? Furthermore, can he give a tight definition of areas where EU money may be spent to reassure us that this is not simply old-style interventionism disguised under the rhetoric of laissez-faire?

Can the Minister also give some examples of the co-operation between member states which is to be encouraged? Can he also give an assurance that British businesses and workers will not be used as guinea pigs for unproductive, potentially costly and ultimately futile pilot projects and that we shall not be put in a position of having to pay for unnecessary and unproductive employment programmes?

The European Council will consider the employment situation each year and adopt conclusions. Article 109q, paragraph 2, provides for the Council on the basis of those conclusions to draw up guidelines for member states to take into account in their employment policies. Can the Minister give an indication of what those guidelines will consist? Can the Minister guarantee that such guidelines in such a chapter, which require member states to make employment policies a matter of common concern and to co-ordinate their actions in that respect within the Council, cannot be used to impose on this country an employment policy to which we are opposed?

Furthermore, each member state is required to provide the Council and the Commission with an annual report on the principal measures taken to implement its employment policy in the light of those guidelines. Given that the Council acting by qualified majority on a recommendation from the Commission on the basis of those reports can make recommendations to a member state, what assurances can the Minister give that a future British Government will not have to support and implement inappropriate, unrealistic and even job-destroying policies? In what circumstances does the Minister envisage such recommendations being made? These are detailed questions about an employment policy which goes to the very heart of our market which over the past 10 to 15 years has attempted to strip away the bureaucracy that inevitably jeopardises job creation, productivity and the growth that is essential to the success of a modern and productive economy. To impose yet further employment and social chapter measures and intervention into the market place is counterproductive to growth and successful competition in an increasingly competitive global market for the marginal investment dollar. The figures that I have provided both about the United Kingdom's policies and their impact over the past 15 years, the American situation, and the stark comparison with the inherent problems of the socialist model in Europe in these areas, provide proof of the need to do exactly the opposite of what the employment chapter and the social chapter that we are considering now will achieve.

Does the Minister believe that on the principles that I have set out, the annual report to implement an employment policy in the light of Article 109 will be beneficial? What good will it do to increase employment? Given that the Council, acting by qualified majority on the recommendations that are made as a result of that report, can have a far-reaching and deep impact on UK job creation, how do the Government intend to counter many of those policies that have so clearly not worked within Europe and which, through the Commission, can now be imposed on UK businesses as a result of signing up to the employment chapter?

In what circumstances does the Minister envisage such recommendations being made? Would it be when a member state had breached an agreed treaty objective, in which case Council recommendations would presumably carry considerable authority? Could this result in the British Government being hauled before the European Court of Justice, which could then interpret the employment chapter's provisions as placing a duty on the British Government to pursue employment policies dictated by other EU states which could well be against Britain's national interests?

In the light of all that I have set out, who now will have final responsibility for Britain's employment policy? Will it be the British Government accountable to British workers who are the very people to be affected by any changes in policy? I can only conclude that the answer is presumably this: not if our employment policies are to be "a matter for common concern" for all member states.

As I said at the beginning of my intervention, I intend to turn to the social chapter at a later stage of the consideration of the clauses which are now being considered by the Committee.

3.30 p.m.

Baroness Williams of Crosby

I echo strongly the words of the noble Lord, Lord Moynihan, with regard to the regret felt by all noble Lords about the illness of the noble Lord, Lord Shore of Stepney. The noble Lord, Lord Shore of Stepney, is a splendid contender on these issues. He is a man who has bravely expressed his views on many occasions out of a deep sense of loyalty and patriotism to his country. I know that I speak for many when I say that we all hope that the noble Lord will soon be back in his accustomed place contributing to these debates in his unique and remarkable way. Having said that, that is probably the point at which any further agreement with the noble Lord ceases.

I begin by saying a few words about employment policy. I shall then deal with the amendments to social policy. First, I believe it is absolutely clear that Title VI as set out in the Treaty of Amsterdam is specifically an intergovernmental policy. Article 109r specifically states that no attempt is being made to harmonise the laws or practices of member states. The other sections of Title VI refer over and over again to an attempt to establish co-ordinated action on employment policy, to exchange information and to try to indicate best practice—in other words, to attempt to deal with this difficult problem by calling upon the experience of each member state. Speaking as someone who for many years has been engaged in OECD employment policies, I can see remarkably little difference between Title VI and that which the OECD constantly adjures upon its many member states: the importance of co-ordination of information and best practice.

I find it difficult to conjure up the kind of ghosts and wraiths that are being conjured up in this debate. I do not believe that there is any serious substance in them. However there is a strong case for co-ordination and the exchange of best practice in this field of all fields, because none of us has the obvious answers. In many instances the best practice in one country can become the initial stages of an imitation, a copying, in another country, which can bring benefits to all.

There is another consideration. The business world is increasingly dominated by multinational companies which will try to achieve the same practices in the fields of training, employment, promotion and skill in all their subsidiaries throughout many different European countries. It is therefore important that governments as well as multinationals and other large companies can co-ordinate their policies and practices in a way most beneficial to the citizens of Europe. For example, Article 109 refers to the exchange of information and best practice. In that context I must declare an interest as the chairman of the Regional Jobs Competition for the EU, where we are constantly engaged in trying to bring the best practice from one area to other countries, very often bringing the best practice in the UK—Scotland, the north east and the south west—to the attention of countries such as Spain or the Netherlands where a similar problem of a declining industrial base has to be dealt with. I can see no possible damage in that and every possible good, including a great deal of good for those who are most innovative and entrepreneurial in our own country.

Secondly, increasingly, under earlier provisions of the treaty, there is a greater mobility of skilled and qualified people, so what can possibly be the objection to trying to co-ordinate and to bring together training for skill? Surely we want to see a similar exchange of young people, a similar widening of opportunities for those whose training and education lie essentially in the vocational and skill areas to that which most noble Lords have broadly accepted for the exchange of university students under the Erasmus scheme.

That brings me to the first question that I want to ask the Minister. Will he tell us something about the attempts to widen the opportunities for young people who are training in advanced skills, to exchange their experience and work in other countries, so that we have a situation similar to that which now exists under the Erasmus scheme for university students?

Secondly, it is appropriate that there should be an annual report to the Council and to the Commission, but here I have some sympathy with those who have tabled Amendment No. 28. On these Benches, we believe that it would be wise to make that same report available to the European Parliament and to national parliaments. There seems no reason why it should not be made available. In that context I wish to commend Her Majesty's Government for having already made clear their own employment policies and for making them available to members of the public before the Cardiff summit looks at the comparative achievements of all the different countries in the Community.

With great respect, I found the arguments of the noble Lord, Lord Moynihan, which depended apparently on the argument that in Britain everything is as it should be, that we were the most competitive, most brilliant in performance, and most sharp-edged in pricing, a little strange in view of the fact that we are still contending with serious balance of payment problems at a time when countries which he criticises strongly, such as Germany, bound from one month to the next from one balance of payments surplus to the next. No one in this Chamber can pretend that Germany does not have serious problems. So she does. No one can be true to the facts if they do not recognise also that Germany, despite the social model—some of us would say partly because of it—has a remarkable record of economic achievement.

Finally, I shall address a few remarks to social policy so that I do not have to detain your Lordships again. The Social Charter and the social protocol have been exaggerated out of all possible proportion in the debates that have taken place over the past few years. The total number of directives under the social protocol amounts at present to one directive on consultation with work forces; one directive on maternity leave; and one on parental leave.

It is no good talking about the importance of family life, about the need to improve the upbringing of young people, and then to take no steps to try to create a world of work in which such things are possible. Parental leave is right because men and women alike should take responsibility for their children; it is right that there should be consultation between management and workforces. I find it incredible that one should still have to argue that that is in some way a deeply counter-productive and reactionary policy. It is right that the treatment of part-time workers in terms of working conditions and opportunities should be similar to those of full-time workers.

Surely we want a society where there is a competitive, entrepreneurial, imaginative and innovative industry, but one that exists within the tenets of a compassionate, responsible and decent society. That compassionate, responsible and decent society means that we have to give priority to high employment and to a compassionate social policy. Alongside our undoubted achievements in areas of competition, innovation and entrepreneurship, it is tragically true that Britain has the highest proportion of children in poverty, the highest proportion of families in poverty, and one of the most rapidly growing unequal structures of income distribution to be found anywhere in Europe. That is not something of which to be proud. We need British entrepreneurial attitudes within a social model that will enable all people in society to recognise the responsibility that each has to the others.

3.45 p.m.

Lord Monson

From these Benches I, too, wish the noble Lord, Lord Shore of Stepney, whom we all admire, a speedy recovery. Although I am not remotely capable of matching his eloquence, I should like to pick up two or three of the points made by the noble Lord, Lord Moynihan, in his most interesting speech. I should like to have been a fly on the wall when Articles 125 and 130, dealing with employment, were being hammered out.

Which EU governments can seriously believe that EU unemployment can be reduced by "co-ordinated strategies" or "the issuing of guidelines"? We all know why unemployment is so high in the highly regulated continental economies with their burdensome social costs and, more often than not, their high minimum wages. It does not require the creation of costly quangoes, such as the treaty envisages, to discover that. Naturally any national government and parliament will respond to the wishes of their own electorates and do their best to maximise employment for their own people, first and foremost.

Under those circumstances—assuming that they are determined to keep their high social costs and their high minimum wages—there is only one way in which high continental unemployment can be reduced in the short-term, although certainly not in the longer term; that is, by the introduction of protectionism. Overt protectionism is of course forbidden by the GATT, but there is plenty of scope for covert, indirect protectionism. We have only to think about the way in which the French channelled Japanese and other Asian electronics imports to a small customs post in the inland town of Poitiers, thereby delaying them by several months, to realise that.

That protectionism is what the French have always wanted to keep out goods from Asia, the Americas, Australasia, and so forth. The French even managed to infect the late Jimmy Goldsmith with that virus. Now it appears that even the Germans seem to be moving to some extent in the French direction in so far as they seem anxious and, indeed, ready to keep out eastern European manufactured goods and agricultural products. Is that, one wonders, the direction in which those who have formulated the employment articles hope the so-called co-ordinated strategy will lead?

Lord Renton

We are discussing an important issue. Surely, in every modern democracy the three principal aims of economic policy must be, first, the creation of employment; secondly, the improvement of social services; and, thirdly, the raising of the standard of living. But the creation of employment must come first because without it we cannot achieve the other two. Economic policy involves many aims, but they are merely a means to an end. Monetary policy, interest rates, the balance of payments and increasing production, for instance, merely support the aims, but the creation of employment must come first.

In that respect, I was pleased that the noble Baroness, Lady Williams, praised the speech of my noble friend Lord Moynihan. He gave a powerful analysis of the need to put the creation of employment first. I am pleased to say that the Conservative Party, which I have supported for many years, performed extremely well, especially in its last five years in government. Great achievements were also made in the early years of the Thatcher governments. It is a pity that during the general election campaign, almost a year ago, the people did not appreciate what had been achieved.

It is right that during our debate on the part to be played in Europe we should concentrate first and foremost upon the creation of employment and how our membership of the European Union, under a new treaty and further strategies, can lead to that principal aim. I hope that the government spokesman will give a full and careful answer to the points made by my noble friend Lord Moynihan.

Lord Grenfell

I, too, am sorry that my noble friend Lord Shore is indisposed. He adds enormous wisdom to our debates, even when we do not agree with the points he is making. Today, I have a difference of view with the noble Lord, Lord Moynihan. It is curious that those who have attacked the provisions in the new title are pessimistic about the possibility of best practice in this country being transferred to other members of the Community. They attack the title as though it were designed to create unemployment. One has only to read the title to see that it is replete with objectives, all aimed at putting employment at the top of the list and creating maximum employment possibilities.

Secondly, the title deals with developing a co-ordinated strategy. When a community of nations suffers from the problem of perhaps one country being successful in its employment and others not, it is not unreasonable that there should be a transfer of ideas. People should come together to discuss what in the practice of one country brings about a better record of employment which could be adopted by another country. That is all that the title proposes. It tries to find the best and most practical means of discovering what is best practice and encouraging its adoption by those countries which do not possess it.

The flexibility of the labour market is a typical example. Of course other countries have a great deal to learn, but I cannot understand the attitude of those people who assume that we should have nothing to do with this title, as if we have nothing to say to our Community partners. That is not the case. What on earth is wrong with drawing up guidelines for member states to take into account employment policies? Does not this country have the confidence to impart its best practice to others? Is it afraid to discuss with other members of the European Union how we have arrived at a successful employment policy with less than 5 per cent. unemployed? That is what Title VI is all about. It shares the experience that we have accumulated in order to ensure that the European Union as a whole can improve its employment record and learn something from us.

I wish that those who attack Title VI on the ground that it is an intervention and interference would look at it from the other side and see that it is not an intervention and interference in our business, but an invitation to us to pass on our best practices to those who need them most.

4 p.m.

Lord Tebbit

I believe that the noble Lord, Lord Grenfell, misunderstands the way in which the transfer of best practice operates. The British motor industry, which had fallen into the worst practice in the world, did not manage to regain its competitiveness by going to governments and asking, "Please, can you tell us what the Germans and the Japanese are doing which is right?", and then waiting for governments to meet under the cover of a great treaty, with enormous numbers of people going backwards and forwards to huge offices erected in Brussels. It did not happen like that. It happened as a matter of commerce; as a matter of business. Sadly, in the end, because we were slow at picking these things up, Japanese companies arrived in Britain and demonstrated to us just what best practice meant.

I must assure the noble Lord that I was in the Department of Trade and Industry when the Nissan Motor Company came to Great Britain. It was not universally welcomed by Members on all sides of the House, but it came. It did not have to bring best practice from Japan via the government in Tokyo, coming across to me in the Department of Trade and Industry and asking me to go out and tell people in the industry what it should be doing to make motor cars. This is an absolute mare's nest. The only best practice we would receive from this method would be the best practice of bureaucrats in creating jobs for themselves and destroying jobs for other people.

I took an interest in what was said by the noble Baroness, Lady Williams. She said that this is no more than occurs all the time in the OECD. That is fine. But why do we need this provision? We could throw away part of this treaty and achieve the result by going through the OECD. If the provision does no more than the OECD does, why do we have to re-invent the OECD and put it into the Treaty of Rome in order to achieve the aim? It is a most extraordinary argument. Of course I know why it is, as I am sure do most noble Lords if they think about it. If we include in the Treaty of Rome words in particular of the kind which the noble Baroness, Lady Thatcher, used to believe were guff, they acquire a life of their own. Matters of common concern move on and become matters of common policy. Sooner or later they become matters of single policy. That is a progress and that is why we cannot leave the matter with the OECD. It is why we cannot leave it to businessmen, through the normal flow of practice and competitive pressures, to take best practice from one country to another.

In particular, I noticed the comfort which the noble Baroness gave. At the bottom of page 30 of the treaty are those words from which the noble Baroness told us we should take great comfort. The treaty states: Those measures shall not include harmonisation of the laws and regulations of the Member States". But that applies to paragraph 109r. It does not apply to paragraphs 109p or 109q or any of the other paragraphs. It applies only to the part which matters least and it does not apply to the parts which matter most.

I am not a stranger to all this kind of thing. When I was Secretary of State for Employment, we were making some of the changes which, I believe, before the election the then Leader of the Opposition, now Prime Minister, used to refer to as "best practice" in industrial relations law. I might add that that is best practice against which he voted on every possible occasion when those changes were being introduced. But let us set that on one side. We should welcome sinners when they come to repentance.

However, when I was introducing those measures, which now stand out clearly as best practice in Europe, I was being badgered constantly by my colleagues in the Council of Ministers with ideas of precisely the sort that we are now seeing introduced through the social chapter. "Why don't we do this?" they asked. As we all know, the power of initiation does not rest with Ministers but with commissioners and, at that time, they had the powerful backing of a most distinguished commissioner. Since he is not on the Government Front Bench at the moment, I shall not mention his name. But he kept bringing forward those ideas and bringing them forward in the Council. At that time, we needed unanimity and so I merely made it plain that there was not the slightest prospect of unanimity and those ideas were taken away again.

Always I said to my colleagues, "Look, if you sincerely believe that those measures will assist your economies, will help to reduce unemployment, will give new energy to your commerce and industry, why don't you introduce them? I wouldn't stop you. I wish you good fortune". "Oh no", they would say, "We couldn't do that because unless you were required to introduce them as well, you would have a competitive advantage". That seemed to me a most extraordinary argument.

Of course, it has been refined now. The French call it le social dumping. The French believe that it is better to be an unemployed French worker than an employed British worker because the British worker is the victim of le social dumping. On the whole, I believe that it is better to be employed in Britain than unemployed in France.

Of course, we would see the pressures to harmonise our laws. After all, it is absolutely disgraceful, is it not, that we see a company like P&O Ferries prospering, carrying goods back and forth across the Channel, while the French opposition is in considerable trouble? Naturally, the view of the French unions is the view which would have been the view of a British union 20 years ago; that is, "We'll go on strike. There is nothing like a good strike for improving the competitiveness of one's business". But of course, at present, before they can stop their customers going to P&O, they have to blockade the ports. That causes disorder and social tensions—quite disgraceful affairs. British and German lorry drivers can avoid the disruption of their businesses by using P&O ferries. That causes grave concern for France.

What is the answer? To a Frenchman, it is perfectly obvious: you bring the British into line; you give us the benefit of your employment laws. That is the purpose of this provision.

The noble Lord, Lord Bruce, speaking this afternoon, said what I am sure the noble Lord, Lord Shore, had he been here, would have said too. I must say that I shall miss hearing the vivid imagery of the noble Lord, Lord Shore, on this matter. It was said that we should have a common purpose of creating employment. That is quite right. But here is the rub. At the moment, we seem to have found that happy trick of increasing employment and reducing unemployment in this country. We are doing it quite well.

What is it that is stopping our competitors on the Continent from following our best practice in that regard? Why do they not adopt the British system? Are they waiting for a treaty which would compel all of them to agree that our system is better and that they should adopt it, or are they waiting for an opportunity to make sure that we fall into line with them so that we are not competitive?

If the European Union were the world perhaps that trick might work for a while, but it is not. I talked recently to the managers of one of our largest, most successful manufacturing companies. They have made the decision that, for the first time, they will establish a manufacturing plant outside the United Kingdom. They are a shrewd bunch, very successful. Are they rushing to Germany, Spain, Greece or Finland? Not on your life. Nor are they going to the Far East to enjoy the fruits of purposeful capitalism àla Will Hutton in Malaysia. No, they are going to the United States. They are going there because not only is land cheaper, not only is the cost of the construction of a factory cheaper, not only are the planning procedures simpler, not only is the bureaucracy less but the wage overhead ratio is better too. There is less interference from union officials more concerned with making a living for themselves than making a living for their members.

If we were to have a treaty under which we were to bind ourselves to exchanging information on best practice, and perhaps even one day to bind ourselves to accept the practices of others, we might do better to have a treaty with the United States than with France or Germany.

I am afraid that, in this treaty, we have got it all wrong. I now come to some common ground with the noble Lord, Lord Bruce. Paragraph 2 of Article 109p states: The objective of a high level of employment shall be taken into consideration in the formulation and implementation of Community policies and activities". Could there be a more important part of a government's policy in that regard than the management of the currency? Who, in this brave new world of the European Community, will be in charge of the management of the currency? It will not be this place, not the Bundestag and not the National Assembly; it will be a quango of bankers. The treaty specifically provides that they should not take any notice whatever of outsiders such as, for example, parliaments—even the European Parliament if it should call for policies designed to achieve higher employment.

I am one of those who think that, on the whole, the bankers are more likely to get it right than the politicians, but it seems to me to be a fundamentally undemocratic practice and one which makes an absolute nonsense of Article 109p. I think that we would be better off if the whole of this section were torn out of the treaty now before it does any more harm.

Lord Beloff

The word "statistics" was mentioned earlier in the debate on this amendment. What I believe people thought about at the time were economic statistics. However, as the eminent economists who normally grace the Labour Benches are none of them present today, I shall not embark upon something which would leave them disadvantaged in their absence.

I shall, therefore, talk about another kind of statistics which are much more immediately relevant; namely, the statistics of voting in yesterday's election in Saxony-Anhalt. It is important to notice that in a state in Germany—which still seems to have the untrammelled devotion of the noble Baroness, Lady Williams—over 12 per cent. voted for a Neo-Nazi party, while something like 40 per cent. voted for an ex-Communist party advocating the same policies as when the GDR was a Communist country. Commentators on those results have pointed out that the division there is one of age—the older people still hanker after the quasi-security of their former Communist regime but the younger people find that a little pathetic and go for Neo-Nazism. At whose expense have those votes been garnered? It is at the expense of the two governing parties in the coalition of the Federal Republic—Chancellor Kohl's Christian Democrats and their Free-Democratic partners, who did not even make the 5 per cent. necessary to be represented in the Land Parliament.

That has happened at a time when the German Government seem intent on bludgeoning Europe into a single currency. The fact is that in Germany a single currency, among other things, has not led to improvements in employment but to a kind of mass unemployment. That is the ultimate explanation of the electoral figures, as it was, in retrospect, probably the ultimate explanation of the rise of Hitlerism in the first place. It seems curious that this phenomenon is taken so little account of when we are considering a treaty which intends, in one way or another, to bind us more closely to an economy (and an outlook) that is proving to be such a massive failure. Even in prosperous western Germany the unemployment figures are still very high.

The point I wish to make is a simple one and one which I have already made in reference to this Bill and to the Maastricht Treaty before it. Europe consists of a number of countries of a highly individualistic kind, each of them with their own preferences, their own convictions and their own ways of doing things. Any attempt to put them into a single system is bound, in the end, to run up against that simple fact. Attention has already been called by, I believe, the noble Lord, Lord Monson, to the French preference for protectionism as a way of securing employment. As it goes back for some 300 years, it is not surprising that they are attached to it. For reasons which I believe could be explained if we had the time, the Germans have the feeling that you somehow or other create employment by limiting the freedom of employers and exalting the influence of trade unions.

In each of those countries there is something different. As my noble friend Lord Moynihan pointed out, we have a different approach. I do not expect for a moment that it is ignorance of that approach which prevents the Germans, the French, the Spaniards or indeed the Italians from adopting the British model; it is just not relevant to their situation as they see it. Surely it is important for a British Government to retain under their own control the basic instruments of economic policy. To do less than that is to betray the electorate to whom, at least in this country, government are responsible.

4.15 p.m.

Lord Stoddart of Swindon

I should like, first, to thank all those noble Lords who have sent their good wishes to my noble friend Lord Shore of Stepney. It is absolutely true that we are missing him very much today. We shall continue to do so tomorrow, but perhaps not on Report. I spoke to my noble friend's wife last night and it appears that he is quite ill in hospital. Nevertheless, he has taken a great deal of interest in what is going on. His wife hopes that he will be out of hospital on Wednesday, but it will be some little while before he can take part in our proceedings. I shall ensure that the good wishes of noble Lords are passed on to my noble friend.

My noble friend Lord Grenfell and the noble Baroness, Lady Williams, asked what this was all about. They said that it is only a bit of talk, the employment chapter is intergovernmental in its operation and, therefore, why not give them our ideas and why not listen to theirs? That is a seductive argument. However, the problem for me is that I have heard it all before and, after a little while, it becomes part of the ratchet effect towards a federal Europe.

We heard that foreign and security policy would be intergovernmental and that we were only going to have chats about such issues. Indeed, we were only going to discuss foreign policies. However, in this Amsterdam Treaty, the matter has been taken very much further than we thought it would be when we discussed Maastricht. It bears no relationship to the assurances that we were given about foreign and security policy during the debates on that matter.

The same is true as regards police and judicial co-operation which, again, is an intergovernmental pillar. Once again in the Amsterdam Treaty the question is being taken further. More powers are being given to the institutions of Europe than we were led to believe would be the case when we discussed the Maastricht Treaty. That is what worries me about this employment chapter. Of course I do not mind discussing matters with our European competitors. I do not mind discussing them with anyone else in the world because full employment is a good objective. The Labour Party, which I joined 50 years ago, has always had that objective. Indeed even the Conservative Party came to accept it eventually. Of course full employment is a great aim and something which we should all support. However, I fear very much that the way in which the European Community works will not necessarily bring that about.

I do not know how many noble Lords watched the programme on BBC2 on the way that EMU and a single currency were obtained. It was an interesting programme. It showed just how undemocratic the decision making process is and that ordinary people were never involved. When we talk about the people's Europe we are not talking about ordinary people; we are talking about the "top people" in Europe. It is the "top people's" Europe that appears to concern some people, not the real people's Europe.

Those who watched that programme would have seen exactly how two men stitched up EMU and a single currency over tea, like any potentate of bygone ages. It was not done through a democratic process. They had not even discussed the matter with their parliaments or assemblies. It was decided over a cup of tea. They made great decisions which affect people's lives, their employment or unemployment, without any reference to the people at all. That is why I am worried that although this new title may be intergovernmental, in the final analysis one or two people will make the decisions without reference to any democratic process. I am worried about the whole issue of EMU and a single currency because those people were not concerned about the economic aspects except in so far as they concerned France and its high unemployment rate. They were concerned about the political aspects. One could see how Germany and France between them were prepared to sideline and to "do down" this country.

If some of us are suspicious when matters such as Title VIa are drafted into a new treaty, please excuse us because we have been through all this before and it is a continuing process. Those are the reasons I believe we should be careful about this title and why I shall support, with alacrity, the amendment in the name of my noble friend Lord Shore whom we all wish a speedy and good recovery.

Lord Moynihan

I mentioned earlier that I thought it was critical to address the questions posed by the social chapter. I do so now with renewed vigour. I am always cautious when I listen to the noble Baroness, Lady Williams, because I think it is fair to say that we agree on many aspects of foreign affairs, but on this subject we disagree most vehemently. We take a polarised position in that disagreement, save possibly as regards the importance of compassion in politics. I hope she will accept that I believe equally in the importance of compassion in politics and see it being achieved best by satisfying the primary concern expressed by the noble Lord, Lord Renton, of creating employment and providing individuals with jobs. The statistics I mentioned when we focused on the employment measures were endorsed by those of us who are involved in politics and in business who also recognise the importance of compassion in terms of creating jobs and creating a healthy economy.

I believe that true compassion is effectively expressed in phrases such as that used by Hans Olaf Henkel, President of the Federation of German Industries, when he pointed out that, Great Britain has become the most attractive location for investment in Europe". For it is governments who create the right legal, regulatory and fiscal framework to ensure maximum efficiency, creation of jobs and competitiveness. That is an important part of compassion. From these Benches our position has been unequivocal and constant. We were simply not prepared to accept the social chapter proposed at Maastricht because it opens the door to unwanted regulation which threatens to damage our competitiveness and destroy jobs.

The Government have given many reasons why they signed up to the social chapter. We have been told repeatedly that our opt-out was damaging and that it insulted British workers. The Foreign Secretary said, We have ended the insult to the British people that they are fit only for the worst rights at work in the whole of Europe".—[Official Report, Commons, 12/11/97; col. 912.] How can he possibly claim that to be accurate when set against the relative success of our economy and the compassion in creating so many jobs through our productivity over the years? In my view those words of the Foreign Secretary are hollow indeed. We were told that it was essential that we signed up to the social chapter if British workers were to have the same rights as those in Europe.

I understand the point made by the noble Lord, Lord Grenfell, that the Minister in another place sought to embrace the same rights as those in other countries in Europe already have. I am in complete agreement with him on the importance of dialogue, but I do not believe for one moment that it could not take place in a constructive manner without signing up to the social chapter. We were also informed that our opt-out reduced our influence in Europe and that we needed a seat at the negotiating table. Of all the issues that we shall debate in Committee this is possibly the most important one. I recognise that this is a subject that appeared in the Government's manifesto. It is not my intention to seek to divide the Chamber on this issue at any stage because I recognise that this Chamber has accepted that we do not challenge manifesto commitments, particularly one that was expressed so strongly by the then Labour opposition.

However, during all the "door knocking" and canvassing that occurred during the previous general election, I did not come across a single voter who decided not to vote for the Conservative Party because of the Government's intent with regard to the social chapter. I may be unique in that and other Members of the Committee may have had a different experience. I should like to know in what way our opt-out from the social chapter was damaging. What are the benefits that our opt-out from the social chapter has denied us? What is the injury, the damage, the detriment that the opt-in agreed at Amsterdam is supposed to rectify? Did our opt-out mean that jobs were lost? No, on the contrary. Did it threaten our economic success? No, on the contrary again. Were we ever at risk of unwanted and possibly job-destroying legislation imposed on us by qualified majority voting? The answer is clearly not; on the contrary.

It is disingenuous for the Government to say, as the Minister said in Committee in another place, that the social chapter is, not only about what can be agreed at a European level; it is also about recognising that some things are better dealt with at a nation state level. When the Government judge that that is the case … we are determined to make it the case that those matters are determined at a national level".—[Official Report, Commons, 3/12/97; cols. 436–437.] But that is patently untrue. The Director-General of the CBI put it best when he said: If you sign up to the social chapter you can't actually be sure that you'll have your way because some directives will he covered by qualified majority voting. There is, however, a way to pick and choose, and that is available to the Labour party if it wants to have it as its policy. The way to pick and choose is actually not to sign up to the social chapter". The directives covered by QMV mean that the Government would be powerless to prevent some measures being imposed on the United Kingdom against its will. This threat has already become a reality before the social chapter has even been put in position; it does not become active until the Treaty of Amsterdam is signed.

Yet the reality has been shown, because Commissioner Flynn has proposals to extend the works council directive to companies with 50 workers and above which, if successful, would be introduced under the QMV sections of the social chapter, with no chance of a national veto.

The Government oppose these proposals to extend compulsory works councils. Yet, as the CBI business update says: the Government has stated that it shares our reservations, but it can be overruled since this is one aspect of Social Chapter legislation which can be covered by QMV". How will the Foreign Secretary guarantee to ensure, as he has promised, that the Commission's proposal for all such legislation with which the Government disagree is amended? Will he give the same answer as the President of the Board of Trade, who told the BBC's "On the Record" programme that she did not support Commissioner Flynn's proposals for national works councils; but, when asked what action the Government would take to prevent the proposals for national works councils becoming law, she could only manage to stumble: Well, er, we shall see how things go". How will the Government pick and choose between those social chapter policies which suit them and those which do not if they, and indeed many policies, can be introduced under QMV? When summing up, can the Minister guarantee that such a measure to introduce national works councils, if the Government proved powerless to prevent it, would not be damaging to the interests of the 3.7 million small British businesses and the entrepreneurs who run them who risk their all to make their businesses a success and who do not have the resources to pay for the personnel departments and the compliance officers?

The noble Baroness, Lady Williams, was right to underpin the importance of social legislation, and I echo those sentiments. But we have a Parliament in which we can consider each possible measure that we deem necessary in this country to protect workers. I have a list, with which the Library have generously provided me, with hundreds of measures appropriately considered by Parliament and passed for this very purpose, and on which I have full agreement with the noble Baroness. But, under the social chapter, legislation in any of these areas—working conditions, the information and consultation of workers, equality between men and women in relation to both employment opportunities and treatment at work, the integration of people excluded from the labour market and health and safety at work—can be introduced under QMV and the Government would have no power to stop such legislation.

There will be noble Lords on both sides of the House who will say that these seem reasonable areas for proposals. But let us look at them. Proposals under working conditions, the first I cited, which could not be vetoed if they are adopted, include the requirement for firms to provide equal rights for permanent and temporary workers, which is already a European Community proposal; no more flexibility in employing temps or casual workers; the requirement for firms to provide full employment rights for all workers—no more probationary periods and full redundancy costs; and the requirement for firms to provide full pay for every day of sickness, as in Germany, which could lead to an increase in sickness absenteeism. All these are measures which have been considered in both Houses of Parliament and all are measures which we do not wish to see imposed upon us, even if they are right for other members of the European Community.

My second area relates to proposals under information and consultation of workers, which could not be vetoed if they are adopted. I mentioned works councils for all firms with more than 50 employees. There is the obligation to consult elected representatives—in other words, trade union officials—over every management decision—recruitment, redeployment, redundancy; the requirement for co-decision between a company's management and works councils, as in Austria—firms will have to gain the agreement of the works council before every dismissal decision; the requirement for all firms to reserve up to half the seats on their boards of directors for duly elected representatives of the workers; the requirement for firms to apply to the government for permission before making any dismissal or redundancy, as in the Netherlands.

These are not pie-in-the-sky ideas; I am quoting specific examples which occur elsewhere in Europe and which, no doubt, those countries would like to see universally applied throughout Europe. They deemed the measure satisfactory for them; why should they not propose it within the social chapter to be satisfactory for the whole of the community and push, through QMV, for it to be adopted?

We may say in this House that we do not feel it is right for the United Kingdom. We had the opportunity when we had the opt-out to consider the social legislation appropriate for this country. But that will not be the case in future on proposals as regards the equality of men and women in relation both to work opportunities and treatment at work, which could not be vetoed if they are adopted. On sex discrimination, the European Community proposal would require employers to prove their innocence instead of being innocent until proved guilty, overturning what we consider to be a basic principle of justice; there is requirement for positive discrimination in favour of women in the workplace, with quotas for both female directors and management; and, for example, the requirement for firms to provide all workers four weeks' holiday a year from 1999; the requirement to provide all workers six weeks' holiday a year, as in Spain, which is what Spain believes to be in its national interest and, if it persuades the majority in the Community, the measure could be extended throughout; the forbidding of any worker to work more than eight hours a night on a nightshift, as per the working time directive; and the forbidding of any worker from working more than 40 hours a week, as in France and Belgium, adding further costs and inflexibility to business limitations on overtime.

It is Jacques Santer's opinion that there should be more QMV in the social chapter. He wrote to the effect that he believes that it is essential to extend qualified majority voting to certain provisions of the social chapter which currently require a unanimous vote; namely, to the protection of workers whose employment contracts have been terminated, the social security and social protection of workers and the representation and collective defence of the interests of workers and employers.

The Government say that we are scaremongering. As has been pointed out this afternoon by the noble Baroness, Lady Williams, the two directives introduced under the social chapter to date—the European works council directive and the parental leave directive—have been modest, sensible and reasonable. But that fails to take into account the fact that the danger is not what has already been introduced under the social chapter, but the potential for more increasingly far-reaching social legislation. I have given many national examples in support of my argument on this vital issue. The fact that we had an opt-out acted as a brake on the development of the social chapter. How can the noble Lord, Lord Whiny, guarantee his words, echoed in another place, will remain true in the future? He said that, None of the provisions in the social chapter, likely or actual, impose serious costs on British business".—[Official Report, 28/7/97; col. 68.] How can the Government guarantee that the social chapter today will not add to the costs of social security tomorrow?

Furthermore, surely our past experience suggests that European Union institutions, including the European Commission and the European Court of Justice, will seek to apply the widest possible interpretations in order to maximise the scope for adopting measures by qualified majority. Hence, the European Union's working time directive was imposed on Britain on the grounds that working time concerns health and safety rather than employment. The Department of Trade and Industry calculated that the working time directive could cost British employers £2 billion.

The noble Lord, Lord Beloff, focused on what is surely the most important issue. After all, what is wrong with a domestic agenda for social legislation? If the Government deem it essential that British workers have the same rights as their counterparts in Europe, why do the Government not introduce employment and social policy measures which they believe will boost employment in Britain through domestic legislation and avoid the risk of the imposition of unwanted and damaging legislation under the social chapter? From those—

Lord Tebbit

I am surprised that my noble friend seems not to know the answer to that question. It is that such domestic legislation could be repealed following a change of mind by the British electorate. Any measure introduced as European legislation under the provisions of this treaty could not be so repealed. My noble friend made the point that we in this place would never vote down a matter that was in the election manifesto of an elected government. Unfortunately, our masters in Brussels do not have such qualms.

Lord Moynihan

My noble friend intervened as I begged the question and before I came to give an answer. I had intended to give two answers. My noble friend has given what would have been my second answer far more eloquently than I could ever have done.

My first answer to the question that I posed is that social legislation must, and should, be tailored to fit the interests of this country as decided by this Parliament for the people of this country. It is just not possible for any student of Europe, particularly given the examples that I have mentioned, to believe that the ill-fitting, one-size-for-all measures on social policy for general use from Finland to France can possibly be in the best interests of this nation.

Thirdly, the argument was put to us that the "empty chair at the negotiating table" philosophy has been used to argue that, despite our opt-out—which meant that we played no part in shaping social chapter policies and had no influence over them—Britain was still affected by legislation under the social chapter and companies were frequently forced to apply it. Even in this House, the Lord Privy Seal himself has told us that there is no halfway house between opting in and staying out, and that we must be at the table arguing our case or we shall be outvoted on measures with which we disagree. That is a critically important point.

Will the Minister explain why the same logic does not apply to our other opt-outs—to the title on asylum, immigration and visa policy and to our sovereignty over our border controls, to the provisions for flexibility, and even to our opt-out from economic and monetary union? Will the Minister explain where the difference lies and how, elsewhere in the Union, we shall be able to maintain a halfway house between opting in to those measures which may suit us while exercising our right not to opt in to other potentially damaging measures, if that is not possible in the case of measures enacted under the social chapter?

It is therefore relevant for us to consider whether there is a third way, or whether it is merely a damaging dead end. The truth is that, despite the Prime Minister's much vaunted "third way", despite his apparent conversion to flexible job markets and his praise for entrepreneurship—even though it is clear that the Foreign Secretary does not share his enthusiasm—his early action in signing up to the social chapter and agreeing to the employment chapter sends quite a different message: that we are returning to the old, discredited agenda that social legislation is somehow the way to provide more security in employment for people in the modern world.

From these Benches we support the Government if their objective is indeed ending the old ways of state intervention, corporatism and over-burdensome regulation. But it is hard to see how that fits with signing the social chapter, compulsory union recognition, adopting the employment chapter and introducing the minimum wage, many of which are more likely to destroy jobs than create them.

It is particularly ironic that this should happen just as we were winning the argument for the enterprise model of Britain—just as the years of Conservative government were delivering Britain an economic performance that has made it the envy of Europe; just as our partners in Europe were waking up to the fact that the only route to job security and wealth creation is through the success of enterprise, and the success of building an open, outward-looking, customer-driven economy throughout Europe.

4.45 p.m.

Baroness Williams of Crosby

I thank the noble Lord for giving way. Does he not find some inconsistency between his extolling of American records in achieving high employment and his remark about the minimum wage, to which the United States has been attached for many years?

Lord Moynihan

I find none at all. For that reason I assure the noble Baroness, who focused very carefully on the words that I chose, that I should be more than happy to enter into a debate about the effect of a minimum wage. I should, however, be in danger of straying outside the remit of this particular clause. I genuinely believe that the minimum wage, particularly set at the wrong level, can be deeply damaging to the flexibility of the labour market. It is an argument on which I should happily deliver in greater detail.

The point I was making when the noble Baroness intervened was that the European social model—I quoted four or five specific aspects of that model, many of which would now be employed as a result of the social chapter—has done much to destroy jobs in Europe. When we see that absence in the United States, when we see the climate that we have built in this country, I find it worrying and disturbing, and wholly wrong politically, that we should be going down the path of establishing a stronger social model, which will now be imposed on the United Kingdom as a result of the absence of our opt-out, rather than working in quite the opposite direction to make the economy more competitive, less burdened by bureaucracy and particularly by the social measures that I indicated would possibly have to be adopted—that is the importance of the point made by the noble Lord, Lord Tebbit—by this country whether we liked them or not. I believe that anybody looking at our economy recognises that millions of Europeans also accept that. Perhaps I may quote again to the noble Baroness the many examples cited by strong pro-Europeans, with whom she would have a great deal of sympathy. Jacques Delors forecast after Maastricht that our opt-out from the social chapter would make Britain, "a paradise for Japanese investment".

I have already quoted Hans Olaf Henkel who, I believe, is very wise in this context and highlighted his recognition of the benefits of the right economic framework in the United Kingdom as opposed to the damage that can be done by a European social model, the likes of which we are witnessing in so many European countries and which has brought so much unemployment to those countries. Maybe the Government give greater weight to the opinions of their European partners than those I have just quoted.

However, I add in this context a couple of newspaper reports to support the point I hope to make, although I doubt whether I shall convince the noble Baroness, Lady Williams, on this occasion. Perhaps I may quote the German newspaper Handelsblatt which reported: With greater labour flexibility, trade union power was reduced, meaning that Britain has suffered far fewer strikes than during the 1960s. According to OECD economists, Britain is setting the pace in micro-economic reforms". It went on to say: One might even say that Britain was a model". If the Germans do not convince, then perhaps the French might. Le Monde asked: How does one interpret the incredible change in unemployment in Great Britain? If unemployment is dropping in Britain it is because they have done everything to deserve it. For several years, considerable efforts have been made to improve the workings of the labour market, thereby boosting job and new company creations". Perhaps the last word might go to the Dutch. Jan Timmer, president of Philips, said: The most competitive country in Europe today is the United Kingdom. It has a great sense of realism, a great sense of competitive spirit—the factories we have in the UK are the most changed factories in the world. For manufacturing, Britain [for Philips] is the most competitive country in Europe today". I have made those arguments in detail because we on this side of the House feel passionately that the proposal to adopt the social chapter, to face the effects of QMV in the way that I have outlined, will be deeply damaging to our economic prospects at exactly the time when we should not be staying where we are but going in the opposite direction for further liberalisation. The policies of the previous government were focused intently on this approach. They gave British business a critical competitive advantage for British business to win orders, create jobs and build prosperity.

The cumulative effect of the present Government's policy, the signing up to the social chapter and the new employment chapter represents a slow but definite erosion in the opposite direction—the salami slicing of that critical margin of competitiveness, starting with small and medium sized firms across the country. To sign the social chapter is to lower our legal defences and to invite into our law, into our market place and into our culture, rules and regulations that are strangers to our spirit of free trade. To sign the social chapter and to agree to the employment chapter is to sign away British competitiveness and to stifle and smother our entrepreneurial shoots of success.

Some confusion exists over the Government's assessment of the importance of the social and employment chapters to British workers and businesses. Can the Minister confirm once and for all whether the social chapter and the employment chapter are vital measures for British workers which will create jobs and lead to better working conditions or whether they are modest measures which are more symbol than substance? It seems to me that both would lead to disaster, although by different roads; the former, by hitting prosperity through burdensome regulations, the latter by fuelling unrealistic, potentially damaging expectations. That is why I have tabled Amendments Nos. 18 and 19 opposing those measures. That is why I tabled the new clause—it appears as Amendment No. 43—calling for a report to Parliament on the legislation and employment implications arising from the social chapter. I hope that the Government will adopt the proposals.

Lord Whitty

This has been a lengthy debate in two halves. For those who can remember, the first half was late on the night of 26th March when we had some broad sweep of history discussions about the whole nature of the European Union. Today has been more concerned, I admit, with the clauses on the table. However, the past hour or so, with its concentration on the social chapter, has once again been a bit of a pre-election time warp. I was hoping that we had got over some of the arguments. The social chapter and the employment chapter are neither the bogies that are suggested by the noble Lord, Lord Moynihan. Nor are they the solution to all our ills. We never claimed that they were.

As regards the broad sweep of history argument, we must be careful. I shall not respond in detail because we have heard much of the argument previously. This is still the Committee stage of the Bill and we should concentrate on the amendments and what is changed by the Bill and the treaty which it facilitates. So it will not be the intention of myself or my noble friends to engage repeatedly in debate about the fundamental principles of the Treaty of Rome and UK membership of the European Union. That was the tendency on the night of 26th March; it has occasionally been so today.

The basic framework under which we are operating, including the notion of qualified majority voting, is the same as it was in the Single European Act which was signed when the noble Lord, Lord Tebbit, was a member of the Cabinet and when the Maastricht Treaty was signed at which time the noble Lord, Lord Moynihan—although regrettably not a member of the Cabinet—was a member of the Government.

I therefore cannot accept, as the noble Lord, Lord Tebbit, said in his first intervention, an attack on our adherence to the social chapter on the grounds that it is impossible for us to reverse it. His government were responsible for signing a very large package or range of issues on which QMV would apply, which put us in exactly the same position under the Single European Act—quite rightly, in my view.

The social chapter, as the debate has indicated, is an area where there is a genuine difference of opinion between this side of the House and the other side, although one or two Members behind me seem to share the concern. But that is on grounds of principle and not on grounds of the content of the social chapter.

The difference between us is that we believe that the single market, to which I had thought all the mainstream parties were committed in this country, should have a social dimension. The Conservative Party apparently does not believe that it should have a social dimension. That is a genuine political difference, but not a major constitutional issue.

I had thought, with some relief, at the beginning of his speech, that the noble Lord, Lord Moynihan, recognised that this issue was explicitly settled by the general election. I understand that. In a few areas of the Labour Party manifesto, I understand, people are claiming ambiguity of meaning. But there can be no ambiguity of meaning whatever in, Britain to sign the Social Chapter". The noble Lord may regret losing the general election. He may feel that the British electorate were mistaken in making the decision that they did. But we have never supported the opt-out on the social chapter; the British electorate has never supported the opt-out on the social chapter; and we take pride in reversing the opt-out on the social chapter. It was a squalid little episode in our European history. The British government were behaving like a banana republic, going around assuring potential investors, who were not impressed, that British trade unions and British workers had fewer rights than anyone on the Continent. That is now over, and the British public in general support the change.

There was a slightly different attack on the social chapter in the first intervention of my noble friend Lord Stoddart. He produced an argument I have not heard for some time. It is, of course, true that at one point the British trade union movement and the British Labour Party were against any legal intervention in the area of workers' rights and collective bargaining. But that era came to an end, partly as a result of the experience of the 1970s. It is not the position of the Labour Party and has not been the position of the Labour Party for at least two decades. We now recognise on all sides that a clear legal framework for the way in which workers are treated is needed for prosperity as well as for security of workers.

As to whether we should be pursuing those social provisions at national or European level, clearly the vast majority of social policy issues will continue to be determined at national level. The social chapter is a much more limited part of the social provisions than has been claimed today. We have not taken on a whole mountain of prescriptive EU regulations intruding into every aspect of our working lives. We have not shackled ourselves to pointless restrictions which will strangle British competitiveness. As the noble Lord acknowledged, there are so far few provisions, and those which are in the pipeline or which may emerge will be subject to input not only from Britain but also from those countries which he rightly points out picked up the positive aspects of the experience of the British and American economies over recent years, as well as the much longer run of benefits of their own job creation programmes which took place in an earlier period, some of which still benefit them today.

The noble Lord points to the alleged ambitions of the Commission, and of Commissioner Flynn in particular, and a whole range of new regulations. That is scaremongering. Even if Mr. Flynn wished to pursue a whole range of new regulations, he does not act in a vacuum. The member states are increasingly influenced by an approach to labour market flexibility. I hesitate to use the term "the third way", but it is neither the corporatist demon that the noble Lord seeks to conjure up before us today, nor the utter free market concept of cutting workers' standards and wages, of which the previous government were very much in favour in both their domestic and European policies.

5 p.m.

Lord Tebbit

The noble Lord must have clear in his mind examples of where, under the previous government's policies, workers' wages were cut. Will he tell us about those wage cuts?

Lord Whitty

I intended to come to this in terms of the employment chapter, but the biggest wage cut of all occurred with the destruction of a large number of jobs in the manufacturing sector of British industry in the early 1980s.

Lord Tebbit

That will not do. I asked the noble Lord to give me examples of cuts in wages; that is, reductions in the amount of money men received from their employers.

Lord Whitty

I was first making the point that the biggest cut in the aggregate wages of British workers occurred because of the deliberate creation of unemployment by the previous government. They remarked on more than one occasion that unemployment was a price worth paying. However, if the noble Lord wishes for more specific examples, for which his department was partially responsible—I believe he was Secretary of State for Employment at the time—we had the abolition of the wages councils. In many of our service sectors, and subsequently in agriculture, that definitely in real terms cut the wages of several hundred thousand British workers. That was the objective. The noble Lord now denies the objective. But otherwise what was the point?

We do not believe that the labour market should be overregulated, nor do we believe that it should be unregulated. We believe that there are decent minimum standards, as do our European partners. We require more flexibility than some of our European partners recently demonstrated. But we believe also that to have a properly flexible labour force we need not only greater skills, mobility, flexibility, adaptability and employability, but also some degree of security and motivation among the workers. Simply cutting their protection and standards does not provide the background to make the substantial changes which the European economies will have to face in order to compete with increasingly globalised world markets.

Our balanced view on this matter—I regret that it is not shared by the Front Bench opposite—is that this combination of flexibility and basic minimum standards is necessary and that the commitment to co-operation at the job summit in Luxembourg last November and in the employment treaty provisions at Amsterdam will lead to a sharing of expertise; to some new European initiatives; and also to the creation of a skilled and adaptable workforce and labour markets which are responsive to economic change. Those are the British Government's words; they are not words which were there before the present Government took over and they are words which recognise the reality of the labour market situation rather than the mythology.

As to whether we will be overruled by QMV on these issues, our constructive approach to Europe gives us a real voice in the future development of EU policy in all these areas. Some noble Lords seem to approach QMV on the defeatist assumption that we will always be in a minority of one. Far from it. We can influence others and bring about our own majority. Indeed, the noble Lord, Lord Moynihan, referred to the empty chair allegation that we made—rightly—on the absence of British influence on the development of the social chapter during the period from Maastricht until the British general election. He mentioned in particular, in a different context, the new proposition coming through the social chapter pipeline on information and consultation for firms with under 50 employees.

It is true that the present British Government, like the past one, is not keen on that proposition. But it is true also that, had we started in the negotiations on that proposition at an earlier stage—in other words, if we had not had the social chapter opt-out—we would have been able to influence it in a somewhat different way. Of course, those negotiations are still open to us; they are not yet complete. The British Government's belated presence will improve the directive and make it more acceptable to us. We will continue to oppose it in its present form. But one of the reasons it is in its present form is that no British influence was brought to bear at an earlier stage. As has proved to be the case with the European Works Council, British firms will be indirectly affected by it, whether or not we are a party to the social chapter.

We believe that we have done the right thing in signing the social chapter. The provisions of the social chapter ought now to be accepted by a wide consensus of British industry and British society, and in reality we believe that they are. The debate on the social chapter is politically over as a result of the general election; it ought intellectually to be over in this House once and for all. I hope therefore that amendments which seek to delete our signing up to the social chapter will not appear at any later stage in the Bill. I hope that the noble Lord, in recognition of the convention in these matters, accepts my position—as he outlined—on the Salisbury Convention, not only by not pressing the vote himself but also by not voting for anybody else who may, by some chance, happen to press the Motion themselves.

I was slightly surprised at the vehemence of the Opposition in this debate towards the employment chapter, particularly those arguments we heard this afternoon. The comments we heard in the earlier stages of the debate, on 26th March, were even-handed and perhaps slightly confused. On the one hand, my noble friends Lord Bruce of Donington and Lord Shore—whose absence we greatly miss—made the point that these employment measures were not sufficient to make any real difference to economic policy. In reality, these employment measures will make some difference to the way in which the Council of Ministers approaches employment matters at the European level. They are not specific measures in themselves but they provide a way in which European Ministers can look at each other's employment policies and consider whether they should be generalised across Europe. However, the responsibility for the adoption of those policies rests with national governments.

I find the official Conservative position on the employment chapter quite extraordinary. On the one hand they say—the noble Lord, Lord Renton, echoed the earlier contribution of the noble Lord, Lord Moynihan—that the creation of employment is central to their concerns, but they reject the idea that part of any strategy on employment should be co-operation with our closest trading partners. My noble friend Lord Grenfell made that point clear. We all agreed that greater emphasis on employment was needed. All partners in Europe were convinced of this, although the degree to which we needed new employment measures was subject to some negotiation, and therefore not everyone got exactly what they wanted out of the new employment chapter, as is always the case in these inter-governmental conferences. But the provisions are not a centralised, Stalinist, European employment policy; they are a matter for common concern. Common concern means co-operation; it means learning from each other; and it means that some things are done better at European level than at national level.

Our position, which has been adopted by Europe, is that we ought to be adopting the kind of guidelines that were agreed at the Luxembourg jobs summit last November. The employment chapter sets out a sensible procedure for member states to work together to identify how best to tackle unemployment. The value of EU-level co-operation is that it enables us to pool our expertise and to identify best practice. I am not clear why the Conservative Front Bench has departed from the position adopted by its predecessor. The previous administration accepted at the Essen summit that there was great benefit in agreeing procedures and guidelines on co-operation on European employment policy, on assessing each other's performance, on identifying areas where European co-operation could take place and on setting objectives for employment policy. In effect, the substantive part of the employment chapter puts into treaty form the agreement with which the previous government, with relatively little dissent on their Back Benches as compared with one or two other European issues during that period, were quite prepared to go along and indeed regarded as a major achievement.

I was asked some specific questions on the articles comprising the employment chapter. The noble Lord, Lord Moynihan, referred to Article 109p and asked whether there would be specific targets in this area. The answer is no, there will not be specific targets in this area in the sense that there are targets under the Maastricht criteria for the single currency, if that is what he meant. But there will nevertheless be some concerted effort to try to co-ordinate activities under that title.

He also asked what incentive measures may be. They are relatively tightly defined under Article 109r, which indicates that initiatives aimed at the exchange of information will be included as well as analysis promoting innovative approaches and evaluating experiences, in particular by recourse to pilot projects. For example, we are now working on a project to improve training opportunities for young entrepreneurs. Given that the chapter will not be in force until the ratification of the treaty, specific examples are slightly difficult to define. Nevertheless, they will fall in those kinds of areas. Declarations 23 and 24 attached to the treaty make it clear that any such incentive measures must be limited in time, must have limited financing and must have an objective need.

The noble Baroness, Lady Williams, asked whether they could include incentive measures in order to finance a project for exchange students or young people. They could indeed include such funding, although the funding under this chapter is limited. It is clear that all European-level funding of these activities, as distinct from national-level funding, is within existing budgets. The agreement at Luxembourg, with which Members of the Committee may not be entirely familiar, provides that some of the first measures under this chapter should be an agreement to a significant increase in EIB venture capital which would be lent to small and medium-sized enterprises in order to create employment. But that is not European budget money. It comes from the bank's reserves, not from member states or from the Community budget. The summit also agreed to redeploy 150 million ecus a year from the Community budget to provide for venture capital for small and medium-sized enterprises in order to fund projects. But this spending will be offset elsewhere in the budget, so there will be no overall increase.

I hope that, in a slightly rushed way, I have shown that the intentions of the employment chapter are nowhere near as Stalinist and centralising as the noble Lord attempted to conjure up and that they are directed at specific and practical ways in which we can learn from each other and provide some communal expertise and a limited degree of communal resources. They will not lead to vast, new regulations. The noble Lord, Lord Tebbit, asked why the limitation on harmonisation applies to only one article. The answer is that that is the only article in the employment chapter which is a legal basis for the Council to adopt detailed measures. So it would not be relevant to make that qualification to areas other than the article which provides for incentive measures.

The employment chapter will not create jobs overnight and will not bring down the number of unemployed—18 million—in a short time. But it will help to focus member states on the need to tackle unemployment by investing in people, by being competitive and by providing decent prospects for improving skills and mobility. It should also help all EU governments to identify which policies are most successful in doing that.

The debate has perhaps exaggerated the importance of both the social chapter provisions and the employment chapter provisions—not so much the debate in this House but the debate outside. However, it is a real distinction between us. We believe that social measures are an important part of the future of Europe and we believe that the European institutions can help in creating jobs. Apparently, the Opposition do not. We are prepared to rest on that defence but not to create a major constitutional issue out of it. I hope, therefore, that other colleagues in the Committee will not create a major constitutional issue out of it and I trust that, at this stage at least, the amendments can be withdrawn and that consideration can be taken at a later stage.

5.15 p.m.

Lord Bruce of Donington

Before the noble Lord sits down, will he be kind enough to deal with the argument which I presented at the initial stage of the debate, bearing in mind that I am fully in accord with his observations on the social chapter, and more particularly with those of my noble friend the Lord Privy Seal, who pointed out that its effects in any case are insignificant within the general flow of political and economic events? Will he deal with the point I ventured to make that, although the existing employment provisions incorporated in the Amsterdam Treaty are good enough in themselves and put unemployment firmly on the agenda, with marginal good effects where applied, nevertheless, other provisions of the Maastricht Treaty, and indeed of the Amsterdam Treaty, providing for economic conditions, monetary conditions and even fiscal policies to be determined centrally, have had an adverse effect on unemployment and have not contributed to unemployment going down?

Lord Whitty

The reason why I did not deal in detail with that point is because I believe that much the same point was made in the debate that we had on the EMU provisions on, I believe, the second day of the Committee stage. If we are to have a debate on particular amendments which extend to the whole area of economic management, we are going to be here a very long time. I accept that there are some aspects of economic policy in the European Union which have a negative effect on employment. That is the exact and main reason why I believe we should institute an employment chapter which begins to reverse that tendency. Therefore, such a chapter should be seen by the noble Lord, among others, as a benign move in that direction, even if it is a limited one.

Baroness Carnegy of Lour

Before the noble Lord finally sits down, may I say that I have listened with enormous interest to the debate. I have a question which the noble Lord may regard as a matter of detail. If he cannot answer it immediately, perhaps the noble Lord will write to me. He will know that the matters under discussion, such as social affairs and employment, will devolve to the Scots parliament. Under the Scotland Bill not only is there devolvement, but there is no certainty that a Minister from that parliament will be present when United Kingdom Ministers discuss these matters in Europe. Are the Government considering altering the Scotland Bill to make sure that a Minister from the Scottish parliament will be present when these matters are discussed? If not, there are serious questions when there is policy divergence between England and Scotland. Will the Scottish parliament be kept in touch with Europe? I shall be grateful if the noble Lord can answer that question or write to me about it.

Lord Whitty

I believe that the noble Baroness would like me to write to her so that I get the formulation right. However, I do not believe that changes are required to the Scotland Bill to fulfil what we are committed to. I may not have got the formulation quite right, but as regards those areas which are devolved to the Scottish parliament, where European legislation is relevant steps will be taken to ensure that the views of the Scottish parliament on behalf of the United Kingdom are taken into account in the deliberations at European level.

Lord Pearson of Rannoch

Before the noble Lord finally sits down, may I press him on a position taken with some force by the noble Baroness, Lady Williams, and the noble Lord, Lord Grenfell? It seemed to me that they made much play of the suggestion that the United Kingdom should be happy to share with our European competitors the secrets of our social, employment and industrial success compared with some of theirs. In other words, our competitors in the European Union would be wise to accept our experience and advice and follow it.

The point I wish to put to the Minister and on which I would welcome his view is that the evidence to date is that that is not the way matters flow between us. I had intended asking the noble Baroness and the noble Lord the same question; perhaps they might like to intervene since we are in Committee. Can the Minister give examples of where the Commission and others have accepted our advice? It seems to me that the bulk of the flow is the other way. I refer to the working time directive—the 48-hour week, as it is known—parental leave, young people at work and other directives mentioned by my noble friend Lord Moynihan. It seems to me that they all prove the way the river flows in this debate. It does not flow from us to them. Can the Minister tell the Committee why he believes that it is going to change direction?

Lord Whitty

All the examples the noble Lord cites show our partners being slightly resistant to ideas coming from the United Kingdom for understandable reasons. There was the hostility of the United Kingdom government of that period to anything European. Therefore, it is not surprising that there was then a certain intellectual as well as political resistance. I believe that in the past few months there has been a major change in that flow. Indeed, the conclusions of the Luxembourg Summit are clearly reflective of the views put a few weeks earlier by the Chancellor of the Exchequer in his proposal as to what a European-level approach to employment policy should be. That proposal is reflected virtually word for word in the Luxembourg communiqué and it is being pursued in the national action plans of every member state. It will have to be reported on by the time of the Cardiff Summit. These are early days. I accept that.

I believe that we have seen a reversal in the flow of ideas—not always ideas which, at their most extreme, have been expressed from time to time by people who are defensive about the position of the previous government but ideas we can share with our fellow members. However, we should not be so arrogant as to assume that there are not still a few ideas of theirs which we can learn from as well.

Lord Hamilton of Dalzell

Before the noble Lord sits down, I have detected in the debate—acknowledging that the party opposite is now in power and whatever it says goes—an ideological difference between us. That was borne out in the contribution made by my noble friend Lord Tebbit. He believes that free market ideologies are the secret to what we have achieved. What has to be borne in mind—and this was very much derided in the speech of the noble Lord opposite—is the extremely painful period this country went through when we shook out what one might call "rust-belt" industries. Europe needs to do that very badly. What advice will the Government give in that respect if they are going to give advice to Europe? Without it, nothing much will happen. Alternatively, will the Minister give the kind of advice which he gave when his party was last in power which led to our having the highest tax, the lowest output, and the lowest level of benefits in the whole of the OECD?

Lord Whitty

We have all been through painful periods of economic adjustment. We went through a much belated one, in the view of some people, in the 1980s. But we did so in a way which did not take account of the need to ensure that not only were we moving away from inefficient work practices and areas of industry but also that we were equipping our workforce to take on the skills and move into areas in which we would be able to compete in the longer term.

We still have one of the least skilled workforces in Europe. The Germans, and almost any other European country, still have better skill levels. If we can combine the adaptation of the structure of British industry which we have gone through over the past couple of decades with the continued upgrading of the skills of our workforce and of our innovation and expertise, that is the kind of message that we would wish the whole of Europe to receive. At no stage do we intend to go back to what may have been prescribed by some Members of this House in the 1970s. Nor do we intend to go back to achieving change solely at the expense of the workers which, by and large, was the experience of large sections of our community during the 1980s. There is a better way forward not only for Britain but for the rest of Europe.

Lord Hamilton of Dalzell

I am sorry to intrude again. I believe I detected the noble Lord saying that the Germans have reached that situation already. I am always interested in the contributions of my noble friend Lord Beloff. He made the point that the Germans are not very happy in spite of that.

Lord Whitty

I did not say that the Germans had it already; I said that the Germans have a more highly trained and flexible workforce in many areas requiring higher skills than we have been able to achieve. That does not mean that they have resolved all their problems.

I get slightly fed up when people in this House and elsewhere point to Germany as an economic disaster. I note that the noble Lord, Lord Beloff, is no longer in his place, and I accept that some of the judgments of the electorate in Eastern Germany are worrying, but, for heaven's sake, let us accept that one of the major reasons for the Germans' relative failure in the past six or eight years has been the enormous task that they have taken on in absorbing the whole of the defunct and decaying economy of 17 million people in Eastern Germany. I cannot even bring myself to imagine what would have happened to the British economy in 1990, in the last years of the Thatcher regime, if we had had to absorb similar costs. Germany's record over the past 50 years in terms of its creation, prosperity and democratic traditions has been a lesson to us all. The fact that Germany has stumbled on the economic front in the past eight years or so has very little to do with some of the issues raised this afternoon, and quite a lot to do with its absorption of Eastern Germany.

I believe that this amendment stands in the name of the noble Lord, Lord Shore, but perhaps I may ask my noble friend Lord Stoddart to withdraw it.

5.30 p.m.

Lord Stoddart of Swindon

If my noble friend Lord Shore of Stepney were here, I am sure that he would want to reply at reasonable length to our very long and detailed debate, which has ranged widely over economic policy, employment policy, the social chapter, economic and monetary union and the single currency. Having to reply to such a debate is a tall order, and I am not tempted to do so otherwise we would he here for a long while yet.

I am sure that we were all pleased to hear my noble friend Lord Whitty say that this is not a Stalinist measure. Some of us agree that it is not a Stalinist measure at the moment, but we are frightened that it may become such in the future. Let us hope that my noble friend is right and that it will not progress in that way.

On the social chapter and collective bargaining, I advise my noble friend that I was in the trade union movement a long time and I believe that trade unions are still in favour of collective bargaining. Indeed that is their whole raison ďêtre and if they cease to believe in collective bargaining, they cease to exist. What is necessary is a broad framework in which they can embark on collective bargaining. I am afraid that the social chapter goes further than I would wish in those circumstances.

I must also advise my noble friend that it may well have been necessary under the previous government to have the social chapter because their attitude to trade unions was perhaps a little different from our own, but now that we have a Labour Government we do not need to be constrained by any social chapter because we now have the power to put into operation whatever social chapter measures we want. That is the essence of the British democratic system—and I do not want it interfered with. When there is a Conservative government in power with a mandate from the people, they must put forward their policies unconstrained, but when a Labour government are in power I expect them, having the same sort of mandate but on different policies, to be entitled to do exactly the same. That is the essence of the British democratic system and that is why I am opposed to the social chapter. I believe that it undermines our system.

As I said earlier, we have had a long and useful debate. It seems that we are agreed on some measures. We believe that the free market is good—that is, at least the two Front Benches agree that it is good and that it should continue for all time because it will bring us all great benefits. Having said again that this has been a good debate, I beg leave to withdraw Amendment No. 10.

Amendment, by leave, withdrawn.

[Amendments Nos. 11 and 12 not moved.]

Lord Pearson of Rannoch

moved Amendment No. 13: Page 1, line 13, after ("2") insert (", other than paragraph 7 (provisions of the Treaty establishing the European Community relating to combatting discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation),"). The noble Lord said: Amendment No. 13, and Amendment No. 50 which is grouped with it, stand also in the names of the noble Lords, Lord Stoddart of Swindon, Lord Shore of Stepney and Lord Monson. I am moving the amendment in the absence of the noble Lord, Lord Shore. This gives me the opportunity to echo the sentiments which have been expressed by other noble Lords about the noble Lord's very regrettable absence from this Committee. All those who have attended our debates so far will appreciate that he is a tremendous strength and addition to the more Euro-realist side of our arguments. I join others in hoping that the noble Lord will have a speedy recovery and that he will be able to join us at Report.

Amendment No. 13 would exclude a new article, an article which by coincidence and not, presumably, by diabolic intervention, is also numbered new Article 13 in the proposed Amsterdam amendments to the treaty establishing the European Community. New Article 13 extends the competence of the EU to allow the Council, acting unanimously to, take appropriate action to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation". Amendment No. 50 would subject the old Article 6, now Article 12 of the Treaty establishing the European Community, to a report from the Government setting out its implications for the United Kingdom, such a report to be approved by both Houses of Parliament. New Article 12 prohibits discrimination on grounds of nationality.

To take Amendment No. 13 first, which refers to new Article 13 of the treaty, one has to acknowledge with as much gratitude as one can muster—that may not be much—that the extension of the EU's powers to allow it to join forces in this country with those armies of political correctitude of the sex, race and class brigade, is at least subject to unanimity in the Council—in other words, we could veto any action which the rest of the Council might wish to take but which we do not, although our veto would be subject to all the usual horse-trading which goes on in Europe.

Nevertheless, it is yet another glaring example of the way in which the EU machine advances step by step into areas which were before subject only to our national jurisdiction, and which should remain so. It is yet another example of the working of the "salami slicer" of my noble friend Lord Tebbit. Incidentally, I am still waiting from our earlier debates in Committee for the Government to give us any examples of where power has been returned to national parliaments in contradiction of the doctrine of the acquis communautaire. No doubt we shall come back to that question when we reach our old friend subsidiarity in the group of amendments which begins with Amendment No. 26 on the Marshalled List, but perhaps I may mention it again in this context. Perhaps the answer is that that is just not how salami slicers or the EU work, which may be why the analogy chosen by my noble friend Lord Tebbit is so accurate. Once another juicy slice of national sovereignty has been severed, they are not capable of putting it back again, even if they wanted to do so which, of course, they do not.

I trust that your Lordships will forgive me if this all seems very obvious. It would be nice to hear just a few examples from the Government, compared to all the thousands which go the other way, which might go to show that the sovereignty of the United Kingdom is not on a salami slicer after all. If they cannot do that—I am pretty sure that they cannot—perhaps they would at least admit it. Then we shall know where we stand and openly acknowledge the true nature of the Treaty of Rome.

This is not a particular criticism of the present Government. The problem was exactly the same with the Single European Act and the Treaty of Maastricht. Indeed, in 1993 some of us posed exactly the same question to the previous government in our debate on the Treaty of Maastricht, without the vestige of a satisfactory answer. Instead, we were told that subsidiarity would be our shield of defence against the further erosion of national sovereignty which of course it has not been, nor could it be.

I come to the detail of new Article 13, from which I have quoted. I should like to ask the Government a few questions. First, why have they felt it necessary to allow the European Community to extend its competence into these areas? For instance, what is wrong with our own Race Relations Act or similar legislation? Is it in any way inadequate? If so, could it not be easily amended in this Parliament? For instance, is it felt that we do not do enough about ageism? For those noble Lords who may not be familiar with that expression from the vocabulary of the politically correct, it means that we should not be discriminated against just because we are getting on a bit. I am sure that a number of noble Lords, myself included, would support something along those lines, but do we need Europe to do it for us?

What does this article actually mean? What did the Government believe that it meant when they signed up to it? Can the Minister be so good as to tell the Committee exactly in what kind of "appropriate action" the Government foresaw themselves joining forces with other members of the Community to combat all of these evils? What would be an "appropriate action", and why could not each of us take it on our own if we wanted to? Can the Minister explain to the Committee exactly what is the difference between a religion and a belief? Have the Government thought through some of the possible ramifications of this dilemma? For instance, if one is a well-known Christian evangelical will one be able to sue the national council of atheistic marxists if it refuses to give one a job as membership secretary? Who will decide whether the Moonies or other less desirable sects deserve Europe-wide protection under this clause? What about witchcraft? Can the Minister tell the Committee what are the bounds of decency, and therefore presumably of protection under this provision, of sexual orientation?

I hope that the noble Minister will forgive me but I am trying to understand what this clause may come to mean. I do so against the background of one of the good things that the present Government seek to do in the field of education. One of those good things appears to be an appreciation of how much damage the over-promotion of issues concerning gender, race and class has done in our schools. The present Secretary of State is to be congratulated on his firm comments in this regard. Yet here we are extending Community competence into those very areas that have brought our state system of education so low, or at least have helped to do so. The people in our schools who over-promoted these issues were the same people who, for instance, refused to use the phonic method to teach children to read. I congratulate the Government on standing up against these people. I do not understand therefore why they are kicking them out of the front door only to risk letting them in through the back door under this treaty. Another brief example is the growing demand for single-sex schools in this country, for very good educational reasons. Have the Government considered whether such schools will eventually become a violation of EU legislation?

I understand that part of the inspiration for new Article 13 may be a response by the Community to the so-called Kilanker case in Germany which overthrew an attempt to put into law positive discrimination in favour of women; in other words, we may be looking at an attempt by the EU to start to enshrine positive discrimination in favour of certain groups taking precedence eventually over the existing national legal order. Can the Minister assure the Committee that this is not part of the intention behind the article?

When the Minister comes to consider his answer will he remember that, although the new article is protected by unanimous voting, already Directive No. 7605/97 aims to combat gender discrimination in the workplace? Such directives can already be passed by qualified majority voting under the social chapter, which I fear the Government may one day regret having signed. Directive No. 7605/97 (if I am not mistaken) enshrines the principle, contrary to British law and natural justice, that the burden of proof is to be divided between plaintiff and defendant. It also introduces into our law the rather woolly concept of indirect discrimination. My noble friend Lord Moynihan alluded to that kind of legislation in his speech on the previous group of amendments.

That is the kind of legislation, is it not, that gives rise to the recent case in this country of a pregnant woman who applied for a job which she knew that she could not do because it required her to lift heavy loads? The employer was as a result forced to pay compensation for not giving her the job. The Minister may recall that that case has been raised in Written Questions by my noble friend Lord Vinson, from which it appears clear cut and apparently true. Does the Minister agree that that is the kind of case which must make us very worried about new Article 13 and that therefore Amendment No. 13 is reasonable in seeking to exclude it from the treaty?

I turn to Amendment No. 50. This deals with the previous article in the treaty, Article 12, by making it subject to a resolution of both Houses of Parliament. The article simply prohibits any discrimination on grounds of nationality: The Council, acting in accordance with the procedure referred to in Article 251, may adopt rules designed to prohibit such discrimination". Article 251 is also without prejudice to other special provisions in the treaty.

The first matter that we must look at is the procedure to be followed under new Article 251. That article turns out to be our old friend Article 189b in the Treaty of Maastricht which sets out what is known as the co-decision procedure, except that the procedure has been slightly speeded up in the Amsterdam amendments. The co-decision procedure is not the innocent creature that many people suppose it to be. In effect, it allows the Council acting by qualified majority vote to pass into nationally binding law any Act with which the European Parliament agrees. It is only if the European Parliament does not agree with a law or Act supported by qualified majority vote in the Council that the so-called common position procedure is then adopted.

The common position procedure is just about the silliest way of taking a decision or not (as the case may be) that has yet been devised by mankind, as far as I can see. But I need not weary the Committee with it now. The danger to the United Kingdom in Article 251 lies in the stark fact that we can be out-voted in the Council, as we often are, and then our only protection is the possibility that the European Parliament may agree with us against the majority of the Council who have voted against us. I would have thought that that eventuality was so unlikely as to provide very little protection. Therefore, for practical purposes I fear that we must accept that Article 251, which governs Article 12 of the treaty, subjects us to a qualified majority vote in Council; in other words, no veto.

One then must look pretty carefully at what Article 12 may really come to mean. What it says is fairly stark: Within the scope of [this] Treaty, and without prejudice to any special provisions contained therein", the Council shall prohibit any discrimination on grounds of nationality. To boil it right down, the Council must prohibit all discrimination on grounds of nationality, unless there is something in the treaty which says that it need not do so. What does this mean? Of course, we must look to the Minister to enlighten us. I appreciate that this was largely the version of the Treaty of Rome which predated the amendments agreed at Amsterdam, although that does not give comfort to many of us.

I give the noble Lord an example of what it may mean as far as I can see. Might it mean that in future there is to be no difference between Spanish, Dutch or English fishermen under the common fisheries policy? If it does not mean that, can I ask the noble Lord why it could not do so? If it does mean that there will be no such difference, it would of course be very serious and would make the CFP even more of a free-for-all for those who cheat, and a shambles, than it is at the moment.

In asking that question, I refer to a Written Answer that I received from the noble Lord, Lord Donoughue, on 24th April. He said that the legal basis for the CFP was to be found in Article 3 of the EC treaty, which merely states: The activities of the Community shall include a common policy in the sphere of agriculture and fisheries". I imagine that something may have gone adrift in the translation there, or Article 3 is not being followed, because, of course, we have one common policy in the sphere of agriculture and another common policy in the sphere of fisheries; in other words, two common policies.

I would of course be grateful if the Minister would care to comment on that point. But whatever the answer is—it may have great significance for the legality of the CFP—that is not strictly the subject of the amendment. The noble Lord, Lord Donoughue, then said that the rest of the legal basis for the CFP is to be found in Articles 39 to 47 of the EC treaty. Members of the Committee will understand that I am looking through these articles, trying to find some special provision in the treaty which will exclude the extinction of nationality under the CFP.

I have read through the articles and can see no mention of nationality. Indeed, the words "fish" or "fisheries" do not seem to appear in them at all. Even in Article 38, which the Minister did not mention in his Answer as forming part of the legal basis for the CFP, the word "fisheries" occurs somewhat obliquely as part of the meaning of the expression "agricultural products". In fact, one is left wondering whether the CFP does indeed have a legal basis in the Treaty of Rome.

The question for the Minister when replying to this amendment, however, is whether Article 12, potentially, or indeed actually, removes the distinction of European nationality under the CFP, or has the capacity to do so. I am aware that the CFP is labouring under a derogation at the moment, but surely that cannot for long override the clarity and authority of Article 12. If the Minister can assure us that I am wrong about the specific example of the CFP, that would of course be good news, but, if so, can he assure the Committee that this article will not come to have other similar disadvantages for our national identity and for our national independence in the future?

In other words, is it possible that Article 12 may pave the way for the virtual disappearance of European nationalities in the Treaty of Rome? Until we hear the Minister's answer, I have to hope that the Committee will support the amendment. I beg to move.

Baroness Williams of Crosby

I do not wish to pursue the complex arguments advanced by the noble Lord, Lord Pearson of Rannoch, on the subject of Article 12, but I should like to congratulate the Government most warmly on having been among the supporters of Article 6a. Had the previous government still been in office it is unlikely that Article 6a would ever be part of the Treaty of Amsterdam. I want to say just one or two words about why I believe it to be an important article, and one which may have been insufficiently discussed and deliberated upon.

I say first—it is in response partly to something that the noble Lord, Lord Pearson of Rannoch, said—that that is in part because of the UK's example in areas such as equal opportunities legislation, the Race Relations Board, and race relations legislation. There has been a great deal of interest in the British experience in all those areas throughout the EU member states. I took part in no fewer than six meetings of NGOs in six member states of the EU. In virtually every one members of non-governmental bodies, some of them working at the grass roots—not the élite—spoke of the need for anti-discrimination legislation to be embodied within the Treaty of Amsterdam. That request came from immigrant groups, civil liberties groups, women's groups, and people working with children. In all cases they begged that there should be within the Treaty of Amsterdam reference to the need for action against discrimination on racial, religious, sexual and other grounds. I congratulate the Government on having heard that and on having responded to it.

Secondly, when we are looking forward to the enlargement of the EU to take in a group of countries whose history with respect to discrimination is at best patchy, and which needs to be greatly strengthened by the requirements of the acquis communautaire, to oppose the idea that Article 6a should be a part of the treaties governing the EU would be to misunderstand the extreme importance of shoring up civil liberties and human rights.

We are aware that Slovakia has been put in the second wave, just because of the degree of discrimination against Romanies and people of Hungarian and other descent. One of the reasons why many people are concerned about the possibility of Romanian and Turkish membership relates to human rights issues. Surely, regardless of politics, we must welcome an attempt to deal with those issues and to enshrine at the very basis of the EU the concept that racial and religious tolerance are a required principle of that Union.

We are not the only country that has a substantial religious minority (the Moslems) or substantial racial minorities. The same is true of France, Germany, and many other member states. This was a necessary article. I see no objection to it. It is based upon unanimity. It is something in which British practice is well in advance of that of many other countries in the EU and what the Committee is asking for—that our best example should be followed—is indeed being followed in this very article of the treaty.

At the heart of Amsterdam—it is an important new aspect—is a concern for human rights that did not exist before. Article F and Article O are all about human rights being at the heart of what the EU should be all about. Anyone who looks back at the finest moments of British history will recognise that that is indeed part of the British tradition, and one which I am delighted to see the EU is now embodying. Far from being critical of this article, we should be applauding it, and the amendment should be withdrawn with the full support of all Members of the Committee.

Lord Desai

I am somewhat surprised that the noble Lord, Lord Pearson, introduced the amendment. Surely he is not for discrimination. As the noble Baroness, Lady Williams, pointed out, in these matters UK law has been in advance of European law. Let us consider the single market, of which we are all in favour, and a British person who wants to work abroad. Why should that person not have the same rights wherever he or she works in Europe as he or she has at home?

How would the noble Lord feel if a French person came here and enjoyed better rights of non-discrimination than a British person working in France? He would be the first to protest that that was outrageous. Once we have a single market we cannot have the idea that laws are relevant only in the territory in which one lives, that there is no commerce and that no one will travel, work abroad, or earn money abroad, and that local laws are all right for local citizens. With the single market comes the free movement of capital as well as labour. Once one has the free movement of labour people must have a basic set of rights. Surely, the noble Lord will agree that the good rights enjoyed by British citizens should be portable across Europe. The purpose of the provision that he wishes to remove is precisely to make the rights portable—

6 p.m.

Lord Pearson of Rannoch

I do not wish to detain the noble Lord, hut, for me, the price of that portability is too high. The noble Lord is right in saying that I am not in the least in favour of discrimination. In fact, I asked the Committee what is wrong with the Race Relations Act in this country. One knows what the anti-discrimination laws are in the countries where one goes to work or to live—so when in Rome, do as the Romans do.

Lord Desai

I cannot resist repeating what an Indian politician once said: "When in Rome behave like the Romanians"! That is often the case.

The noble Lord's answer is not good enough. Many people are posted abroad. They should not have to say, "I cannot be posted to such a country because being a woman, black, or homosexual I shall be discriminated against". In that case, one would be less qualified to take up a job in Britain because one's mobility would be restricted. Do Members of the Committee really want British citizens to be restricted in taking jobs abroad because other countries do not enjoy the same good rights as ours? Surely not, but if the Committee adopts this strategy it will be disadvantaging British citizens from taking jobs abroad.

I am not a great expert on the Maastricht or Amsterdam treaties, but I know that as regards fisheries there is a conflict between the single market and national quotas. As the noble Lord knows, one of the problems with Spanish fishermen is that some of the quotas held by British citizens became saleable. That was part of the single market. Therefore, it is probable that Spanish fishermen are holding British quotas because British fishermen sold them. We are all in favour of a single market—I am very much in favour of a single market—but in a single market national logic will not work if it is declared that British fishermen will not be able to sell quotas while the fishermen at every other country can do so. Surely that is absurd. As regards the idea that we should have a common policy for agriculture and fisheries, the mind boggles. How would we have set-aside?

Lord Monson

In response to the noble Lord, Lord Desai, not every state in the United States has identical labour and anti-discrimination laws. They may be fairly identical, but not wholly so.

Lord Desai

That is not the case. The interstate commerce clause in the constitution ensures that discrimination is not allowed. As the noble Lord is aware, the entire civil rights legislation of the early 1960s was carried through on the interstate commerce clause. Once one has mobility of labour one cannot have different discriminatory laws in different parts of the country. That is not allowed. Similarly, one should not have different laws in different parts of the European Union.

Lord Monson

The noble Lord may he right about the United States in theory but not in practice. I believe that the laws are enforced with more vigour in some states than in others.

I support the amendment moved so well by the noble Lord, Lord Pearson of Rannoch. One could take the view, as he appears to do, that the proposed Article 13 is an airy-fairy, motherhood and apple pie declaration unlikely to have any practical effect since it requires unanimity. The Mediterranean countries alone are not noted for their enthusiasm for Californian style political correctness. That lack of enthusiasm does not stop at the Mediterranean. At the heart of the Community, the European Commission practises blatant age discrimination, telling candidates for certain jobs that no one over the age of 35 need apply.

The article would outlaw religious discrimination, for example, re-opening many of the problems that we have and are still experiencing in respect of the Human Rights Bill. Religious bodies for good reason wish to employ their co-religionists, but may be forced to employ those whose beliefs may not only be different from but positively hostile to their own. It would also be illegal to take people's beliefs into consideration, even the most fanatical or outlandish political or religious beliefs. Therefore, a Jewish employer, for example, would be forced to employ someone who sincerely believes in the authenticity of the protocols of the elders of Zion.

The noble Lords, Lord Moynihan and Lord Pearson, referred to the disgraceful directive on so-called gender discrimination in the work place which is wholly counter to our Anglo-Saxon tradition of someone being innocent until proved guilty. That is leading to positive discrimination by the backdoor and no doubt to more disgraceful examples of injustice; for instance, that suffered by the prospective—not the actual—employer who had to pay an enormous sum of money, which practically bankrupted him, for declining to engage a heavily pregnant woman to carry out a physically demanding job.

What about the idea that discrimination on the ground of sexual orientation should be outlawed? Surely, that would open a can of worms. Schools, juvenile prisons and other institutions dealing with young people would be forced to employ paedophiles; presumably undertakers would have to employ necrophiliacs; and so on and so forth. We shall be told, as the noble Baroness, Lady Williams, told us, that this is simply a question of rights. The trouble is that one group of people gain rights at the expense of the rights of others. I commend to the Committee an excellent article on this topic written by Barbara Amiel in the Daily Telegraph on 23rd April. It is absorbing and well worth reading.

Lord Tebbit

On many grounds, I have a good deal of sympathy with those who oppose discrimination. Two questions arise in relation to this clause and this amendment. As was said by the noble Baroness, Lady Williams, the present Government were enthusiastic advocates of the inclusion of this clause into the Treaty of Amsterdam. Therefore, we should hear from the Minister what measures they propose to bring forward under it. Surely, it is not to be left as a piece of decoration. As it stands, it has no effect because there are no measures under it. Exactly what do the Government propose to bring forward?

Inherent in my objection is the fact that here is another example of the common market which we joined showing its ambition to become a state. Surely it is the business of a state, not a market, to legislate in these areas. We have legislated in the state of the United Kingdom in a way which we regarded as appropriate. Others in the European Community have done the same. If one argues that the legislation should be at the level of the European Community one is inherently arguing that it is not an economic community but a state. I believe that that is where it is heading.

Furthermore, there are problems with these grand and sweeping comments. We are all against discrimination based on sex. However, I must confess that some 40-odd years ago I chose a woman to marry and should the occasion ever arise again I shall do the same. I hope that that is not offensive to other members of my sex.

We are all against discrimination based on racial or ethnic origin, religion or belief, disability and all that. Although I am not against discrimination based on sexual orientation, I am of the view that one should be allowed to discriminate against homosexuals if one is looking for scoutmasters. I do not know whether that is a widely held view any more, but if I were looking to recruit a scoutmaster I should not be haunting Hampstead Heath to do so these days, I must confess. It is right that persons of that orientation should be excluded from such activities.

But of course the European Union is becoming involved in those matters, as we know. It is not that long ago that we were compelled, whatever this Parliament thought, to enact legislation to amend the sex discrimination legislation of 1976 in relation to the provisions regarding the Armed Forces. We had no choice in that matter. Therefore, this game is already on in many ways. Let us be in no doubt about that.

It is bound to lead us into many troubles. Apart from anything else, as the noble Baroness, Lady Williams, observed, in this country we now have a substantial minority of Moslems. Just how do we legislate in that area? After all, if we are to respect the religious beliefs of Moslems, we may find ourselves with some problem as regards some of their views on sexual discrimination. Which of those injunctions are we to obey? Are we not to discriminate on grounds of sex or not to discriminate on grounds of religion? I do not have an easy solution to that, although my preference would be to say of a religion like the Moslem religion that such an established religion, which is held so deeply by so many people throughout so much of the world, must be allowed to take its own view on the position of women.

That may be offensive to some people. But if we are to envisage the day when Turkey is admitted into the European Union, we had better make up our minds whether in this country, our Government wish to become involved in controversies within Turkey which have been fundamental to the social fabric of that country and to its religion for many years. Those are the sort of issues which Kemal Atattirk took on in his day and had apparently resolved but which are now returning to the surface as the Moslem religion in Turkey becomes again more dominant in terms of politics and social life.

I believe that we would be utterly and completely mad to become involved with those issues. But I cannot imagine that the Greeks, for a start, would be able to resist treading in that dirty water if it embarrassed their neighbours in Turkey. We would be better without this on the grounds of impracticability; the fact that this is another extension of the power of the European state over the nation states: and above all, that we have no idea at all where this will lead us. It would be better out of the treaty than in.

6.15 p.m.

Lord Moynihan

I am pleased to say that I find myself in broad agreement with the thrust of what the noble Baroness, Lady Williams, said about the important issues which we need to address in relation to discrimination. Indeed, I echo many of the points which the noble Lord, Lord Desai, made on that subject. I was slightly surprised that in earlier debates this afternoon he did not speak on the economy. However, on this occasion at least, we agree with the general thrust of the points and principles espoused by the noble Lord, Lord Desai, the noble Baroness, Lady Williams, and other noble Lords.

As ever, we feel that it is our duty to look in detail at exactly what is proposed by the clause. The example of portability was interesting. If, as was rightly pointed out, the basic body of legislation which we have in this country is something worth following in other countries—and we take a lead in this area—it takes only one other country in the European Union to disagree with the lead that we have taken, for whatever reason, for it to go by the board, because this is to be applied by unanimity.

Lord Desai

Does the noble Lord support QMV in that regard?

Lord Moynihan

I would have a great deal of sympathy with the point which the noble Lord made when it comes to other countries in the European Union adopting many of the measures that we have taken in that context. However, there is something far better than QMV; that is, to persuade other countries on a bilateral basis—outside this treaty—as to the merits of the body of law which we have and to encourage them individually to adopt that body of law. It is not necessary for that to be done within the context of the Treaty of Amsterdam. Therefore, while gingerly and cleverly drawn into the subject of whether I agree with QMV in that context, I say that there is a far better route to follow; that is, completely outside this treaty, to persuade other countries of the important steps which we have taken and the principles which have been espoused.

Therefore, it is important for me to look at the detail of this matter. With the permission of the Committee, I shall ask the Government to respond to the points I raised. This is an area which has taken up a great deal of time in Committee in another place and there are many issues to which I simply do not know the answer and I am sure the Government do. It would be helpful for the Committee to clarify the position as it stands. I shall ask specific questions and give specific answers and follow the warning given by the Government earlier this afternoon to avoid hypothetical questions and loose women. Therefore, the questions which I ask will be very specific. Some were looked at in another place and never answered, and some are new points.

I should be happy to be corrected if I am wrong but, as I understand it, the treaty introduces a new clause which the Government see as providing a legal basis for Community measures to combat discrimination based on sex, racial or ethnic origin, disability, age or sexual orientation. Indeed, that chimes with the Government's commitment to fight unfair discrimination and promote equality in the domestic context. With the important proviso of unanimity in decision-making, European Union-wide measures will be adopted only, as I understand it, when action at European level would bring an added value to action by member states. The clause is couched as a legal basis for future action rather than as a free-standing and unrestricted principle which might allow direct interference in UK laws in the realm of anti-discrimination. I shall examine that important distinction between a legal basis in that context and a free-standing, unrestricted principle.

It is important for the Committee to be aware that that is accompanied also by a declaration calling on Community institutions to take the needs of the disabled into account when framing single market legislation. In addition, there are strengthened provisions on equality between men and women. Amendments to Articles 2 and 3 make the promotion of equality a specific aim of the Community applicable to all its activities. Incorporation of the social agreement provides the legal basis for action to promote equal opportunities and equal treatment of men and women in employment matters.

Article 6a gives the European Community new powers to act in specified areas. Article 6 (new Article 12) already allows the European Union to act against discrimination on the grounds of nationality. There was already a provision to prevent discrimination on grounds of sex, but that is made more explicit in that article, and other areas are newly introduced. The new article provides a legal basis for Community measures to combat discrimination based on sex, racial or ethnic origin, religion and belief, disability or age.

I turn now to the first important point. The new article entitles the Council, after consulting the European Parliament, to take "appropriate action" against discrimination based on sex, racial or ethnic origin, religion and belief, disability or age. However, the article fails to make clear what it means by "appropriate action". I am sure that the Committee will allow me to question the Government as to what they consider "appropriate action" to mean in that context because it opens up new areas in which the Community can act.

A memorandum on the Amsterdam Treaty from the Minister of State at the Foreign Office said: The clause is couched as a legal basis for future action, rather than as a free-standing and unrestricted principle which might allow direct interference in the UK laws in the realm of anti-discrimination". As UK law already provides against discrimination on the grounds of sex, race, ethnic origin and disability, this is a very important issue to pursue and consider carefully. The British Government supported the new article at Amsterdam. In addition, they tabled the declaration attached to Article 95, which was adopted, calling on Community institutions to take the needs of the disabled into account when framing internal market legislation.

In doing so, I should say that I know the Government were specifically keen to promote this idea—this important principle—and it is one that should be welcomed. It was an important initiative to take and I was only sorry that it had to be carried unanimously throughout Europe and that that required us to push it. But that, at least, is commendable from the British Government's perspective.

In another place it was interesting to note that particularly, and at significant length, Bill Cash MP and Sir Teddy Taylor MP were robust in exploring what they saw as the flaws in this article. They were concerned about the uncertainty that that may cause to Church schools, as many Anglican and Catholic schools currently insist on being run by a practising member of their Church. It is not clear that this could remain a condition of employment after the introduction of such measures.

On Second Reading in another place, Sir Teddy Taylor quoted a letter to Christian Action, Research and Education dated 7th July 1997 from the Foreign Office, which said that although it would not expect litigation to arise one could not rule it out.

The other place was also concerned about the ambiguous definition of sexual orientation in reference to discrimination on those grounds. For example, does it question the future status of marriage by opening the door for homosexual relationships to be treated in law as if they were heterosexual marriages? The question was asked as to whether sexual acts between homosexuals would have to be equated with marriage and childbearing, and whether the age of consent for marriage would have to be equated with that for homosexual sex. Indeed, could a Church refuse to marry a homosexual couple? Would the case of a same sex couple applying to adopt a child be given the same weight as an application from a married man and woman? Would discrimination by an employer, including the Armed Services, on the grounds that an active homosexual is inappropriate in that particular workplace, be illegal? Those were legitimate questions which led to a very lively debate in Committee in another place. It is important to clarify how the Government see the answers to those questions as they were not available in the other place.

I should say—I do not believe that I need to emphasise it because it is well known in this Chamber—no one should be in any doubt about the attitude of my party to discrimination. Like everyone in this House, we are firmly, resolutely and utterly opposed to it in any shape or form. In government we did not hesitate to take action to fight discrimination and to stamp it out. We are proud of our national record on questions of discrimination and we are also convinced of the adequacy of the legal framework already in place. For example, although our race relations may not be perfect, they are nevertheless recognised as being very important in many countries of the world. Among the legislative measures that we took in government, the Public Order Act 1986 stands out. I give way to my noble friend.

Lord Tebbit

I am most grateful. My noble friend set out in broad terms the position of the Conservative Party and its opposition to discrimination. However, just before that he raised some enormously interesting questions and asked where the Government would stand on some of them, such as those relating to Church schools, and so on. However, I am no longer quite sure where the Conservative Party stands on those issues.

Lord Moynihan

I am sure that the Conservative Party stands very firmly and clearly on those issues and would find considerable if not total agreement with my noble friend in the answers to many of the questions that I put forward. However, perhaps I could make a clear and telling point in that context. In my view—and I know my noble friend will agree with me—it is a matter for the Houses of Parliament to consider the answer to that important question and for a decision to be made in this Parliament. My worry is about the implications, especially the legal implications, of another body determining the answers to those questions without recourse to the views expressed in this place.

I mentioned the Public Order Act 1986 as an exemplary measure. It is right also to recognise the Criminal Justice and Public Order Act 1994 which, for example, made the publication of racially inflammatory material an arrestable offence and created the new offence of intentional harassment. Now, in opposition, we remain ready and willing to support any sensible and effective measures that the Government may take to combat discrimination. We believe that problems of discrimination, especially on such sensitive questions as race and religion, are best dealt with through national legislation. Legislative provisions to deal with discrimination need to be carefully tailored to the particular circumstances and traditions of each member state. The exact nature of problems of discrimination depends on the country in which those problems occur. This is an extraordinarily sensitive area and requires very sensitive handling.

I believe that our domestic legislation has always sought to reflect our particular circumstances. The great disadvantage of the provisions in Article 6a (new Article 13) is that they do not meet that essential requirement. It is yet another example of an ill-fitting "one size for all" measure, tacked approximately into place for general use from Italy to Ireland. Therefore, we do not believe that the European Union is the right context for a general clause prohibiting discrimination on the grounds of gender, sexual orientation, race, religion, age or disability in that way.

Why do I say that? Perhaps it would be better if I were to pose that in the form of a question to the Minister. It is critical that we look to the legal basis. I would be grateful if the Minister could confirm that this article enables the European Court of Justice to intervene, go beyond specific legislation and act on the basis of the treaty language that we find here. For example, could the European Court of Justice give direct application to the article? Could a complaint be brought before the ECJ on the basis of Article 13 and the general principles laid down under it? Can the Minister help me by giving a specific and categoric assurance that that court will not be able to intervene on the basis of this article unless and until there are specific legislative provisions under it? I hope that that is the case, but it would be most helpful if the Government could clarify the position for the purposes and the benefit of the Committee.

We on this side of the Committee wanted to see co-operation on racial and other discrimination issues achieved. We wanted to reach agreement on those issues under the third pillar. However, it seems that the introduction of the article into the treaty would give the European Court of Justice jurisdiction and that it is a treaty article which could be taken into account by the ECJ in reaching decisions on complaints brought before it. I would welcome the Minister's response to that issue.

I am aware that we were discussing an enabling measure which is not, at this stage, a directive or binding in law and which, as I understand it, will not change any Act of Parliament or any measure covered by such an Act. I am also aware that decisions taken, based on the provisions of the measure, must, as I mentioned earlier, be adopted by unanimity. Yet its general catch-all provisions and ambiguous definitions nevertheless open up a minefield of social and ethical dilemmas which could have far-reaching implications for the traditions and beliefs of this country. For example, does the Minister believe that the magistracy should be opened up to adults under the age of 27, as could happen under the age provisions of this article? Should doctors be able to refuse fertility treatment to women over 40? Should the institution of marriage—as I mentioned earlier—be restricted to heterosexual couples? As regards religious groups in the United Kingdom, all at present can technically refuse to admit individuals to membership on the basis of their religious belief. Mosques, for example, are allowed to employ only practising Moslems. The Roman Catholic Church is allowed to ordain only men into the priesthood. I do not seek to debate these detailed points but to ask the Minister's views on the application of the article to them.

Can the Minister give examples of the kind of appropriate action (which I mentioned at the outset) that this article will entitle the Council—after consulting the European Parliament which has a veto in this area—to take with regard to the relevant areas of discrimination? Of course, such an article has merits and drawbacks. Its merits are its good intentions. However, those good intentions should be reflected in the individual legal frameworks of member states. All states should be encouraged to ensure that their frameworks are adequate. I firmly believe that national domestic legislation should be introduced to cover key questions—I have mentioned many—not least the need for members of racial minorities to travel freely throughout the Union without suffering discrimination. But if countries which do not have such legislation prove reluctant to introduce it, the unanimity requirement in this article—which is rightly part of the provision—would prevent those countries being obliged to do so by any action under the treaty. If such an objective was the raison d'être for this article's inclusion in the treaty, in that situation it is effectively rendered useless.

The drawbacks and the unknown aspects of this blanket provision have caused widespread apprehension and genuine concern, particularly given the sensitivities of the issues involved which far outweigh the arguments in favour of the inclusion of this article in the treaty. I hope that the Government will inform the Committee of the position they are taking on these points. In terms of the broad principles I am at one with colleagues on all sides of the Chamber as regards the importance of tackling these measures. However, I believe that the focal point for tackling them should be the national parliaments, and that there are real dangers—I hope that I have mentioned many of them—as regards uncertainty and the language that is employed. I hope that the Minister will be able to answer my questions.

6.30 p.m.

Baroness Symons of Vernham Dean

My noble friend Lord Whitty expressed his regret earlier this afternoon at the absence of our noble friend Lord Shore of Stepney. I am sure I speak for the whole of the Government Front Bench in wishing the noble Lord, Lord Shore, a speedy recovery from what I understand is an extremely painful condition. I hope that he will return shortly to give us the benefit of his wisdom on this matter as on so many other issues.

We have had a wide-ranging and interesting debate on Amendments Nos. 13 and 50. First, I shall concentrate on Article 6a and Amendment No. 13 which pertains to it. The new clause provides a legal base for Community measures to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age, or sexual orientation. As such it represents a new power to adopt by unanimity legislation in fields where the Community already acts, such as employment and social policy. This is welcome to the Government. It is also welcome to the noble Baroness, Lady Williams of Crosby, and to my noble friend Lord Desai. I had thought that it was also welcome to the noble Lord, Lord Moynihan, but towards the end of his peroration I was in some doubt of that.

The Government have always supported the fight against unfair discrimination in the United Kingdom and across the European Union. While this country already has relatively advanced anti-discrimination legislation such as the Race Relations Act, the Disability Discrimination Act and the Equal Pay Act, the same cannot necessarily be said of other member states. We should not claim that our domestic legislation is perfect in every respect, but we are in the vanguard on much anti-discrimination legislation. We are confident that the experience of our domestic laws will help to shape EU legislation in a way that brings positive effects in Europe.

It has been suggested in this Chamber this afternoon that issues of such sensitivity should be handled only at national level. Some Members of the Committee have argued that only national governments can take proper account of national sensitivities. While it is true that incidents of discrimination differ between member states, many are common problems. To take one example, racism is a blight across Europe. In discussion of this provision in another place a number of speakers referred to the discrimination suffered by their black and Asian constituents when they travelled in Europe. Most notably the honourable Member for Leeds, North gave an example of two of his constituents, one of whom had been born in St. Kitts and another of whom had been born in Karachi, who had experienced difficulties when travelling in Europe.

Before I joined your Lordships' House I was the general secretary of a Civil Service trade union. I am proud of that record. Unlike some Members of the Committee I do not regard trades unions as the inevitable and awful instigators of all that is wrong with industrial relations in this country. When I was general secretary of the FDA, incidents were brought to my attention of fairly middle ranking or senior civil servants who had experienced racial discrimination in different parts of Europe. When noble Lords ask what is the point of trying to do anything about this in Europe, I must point out that at the moment some British nationals suffer racial discrimination when they travel in Europe. If European legislation can help to prevent that, we should be prepared to support it. This Government are prepared to support it. Of course we shall need to consider individual proposals when they are presented, but we believe there is an important role here for co-ordinated action at European level.

It has also been suggested that Article 6a will have direct effect and could be interpreted widely by the courts. However, that is not the case. As the noble Lord, Lord Moynihan, said, the article is clearly couched as an enabling provision for future action and is not couched as a freestanding and unrestricted principle. In itself it does not outlaw discrimination on any of the grounds that have been listed in the Chamber this afternoon. The examples given by the noble Lord, Lord Monson, were not only preposterous but also groundless. I refer to the view supported by other member states and by Justice, which is chaired by the noble Lord, Lord Alexander. I had thought that that proposition was also accepted by the noble Lord, Lord Tebbit, until he also allowed himself to be tempted into giving possible examples which would automatically be put in place by this provision. As the recent report of Justice on the Amsterdam Treaty states—

Lord Tebbit

If the noble Baroness will forgive me for saying so, I did not suggest that any of the matters which I mentioned could be brought automatically into effect by this provision. I am as capable of reading the treaty as the noble Baroness, if I may say so. It is quite clear to me that nothing will be brought into effect without propositions from member states and legislation flowing from that. My concern, apart from ones of principle, is to know what the Government want to bring forward under this provision.

Baroness Symons of Vernham Dean

The noble Lord must forgive my misinterpretation of his remarks about scoutmasters and Hampstead Heath. However, shortly we shall discuss what the Government would like to introduce. As Justice's recent report on the Amsterdam Treaty states: This means that individuals will not be able to rely on [Article 6a] in actions before national courts; instead additional EU implementing measures are required to bring it into force". I hope that those noble Lords—not the noble Lord, Lord Tebbit—who thought that there was some degree of automaticity here are comforted, if not by what I say, at least by what is said by the noble Lord, Lord Alexander, as the chair of Justice.

Lord Renton

I wonder whether the noble Baroness the Minister will give her opinion on the following matter; I think that she will have no difficulty in doing so. The European Court of Justice could not rely merely upon the provisions mentioned here. Those provisions would have to be followed up within the European Union, carrying them into some effect within the Union.

Baroness Symons of Vernham Dean

The noble Lord is right. It was a point also raised by the noble Lord, Lord Moynihan. The provisions do not of themselves give the European Court of Justice any right on any particular issue. Extra action would be required for that. There are two main safeguards in that respect. The clause makes clear that any action taken under Article 6a must be what is called "appropriate" to the objective. Several noble Lords have raised the question as to what is appropriate action. At one end of the scale, it could be a directive harmonising the legislation of member states; at the other, it could be a recommendation addressed to member states on how their legislation should be framed. It will clearly depend on the precise objective which the Council is seeking to pursue.

The word "appropriate" also caters for many of the individual points that the noble Lord, Lord Moynihan, put towards the end of his speech. Action might support one person's extreme definition of non-discrimination, but that would not be appropriate. I have in mind here such points as those made about Church schools and homosexual marriages. But, of course, the ultimate safeguard is not the word "appropriate", interesting and important as that is. The ultimate safeguard is the point on unanimity. If we felt that the legislation was going too far, that it was not appropriate or that it failed adequately to reflect UK approaches, we would not agree to it.

Baroness Williams of Crosby

On the more positive rather than the negative aspect, would Her Majesty's Government view the article, which expresses a will and a desire on the part of the European Union, as the basis upon which Her Majesty's Government might push an argument for looking again at, for example, recruitment to the official levels of the European Union's employment, where few faces are other than white?

Baroness Symons of Vernham Dean

I am grateful to the noble Baroness for redirecting our attention to the positive aspects of Article 6a. I regret that of necessity in answering the debate I have unfortunately had to concentrate much of my remarks on the more negative aspects.

Let me take the noble Baroness's point, together with the point made by the noble Lord, Lord Tebbit, who asked what action we might want to take. Commissioner Flynn has an initiative under way to look at an action plan on racism, for example. It would be an important contribution to keeping up the momentum in Europe generated by last year's European Year Against Racism. Her Majesty's Government plan to make our own contributions to this through a seminar on racism which we shall host in June this year. We look forward to studying in detail Commissioner Flynn's action plan and to working with the Commission and our European partners to take forward the fight against racism in Europe. I hope that that gives the noble Lord, Lord Tebbit, a concrete example, while also giving the noble Baroness the more positive angle on this part of the treaty.

6.45 p.m.

Lord Hamilton of Dalzell

I feel extremely uneasy whenever we start talking about discrimination. When we discussed the Disability Discrimination Bill, I spoke to the effect that Bills against discrimination achieved nothing. That is partly because of a misuse of the English language. What we are all talking about is not discrimination but prejudice. Of course, there are suspicions. When the noble Baroness talks about objectives of various people in using discrimination law to effect various matters, one immediately sees the system being manipulated. If it were simply a case of someone proving prejudice, it would be a matter for the courts to decide whether or not something was a matter of prejudice. If we could sweep away "discrimination" and put in "prejudice", everyone's mind would be clearer.

Baroness Symons of Vernham Dean

I do not want to be drawn into a semantic argument about the difference between prejudice and discrimination. What we are talking about is unfair discrimination. The noble Lord says that he does not believe that that subject can be legislated about. I wonder whether the thousands of women in this country, and the millions of people in this country who are not white Anglo-Saxons, who have benefited from the legislation of the mid-1970s would agree with the noble Lord. I rather think not. I believe that the anti-discriminatory legislation of the mid-1970s has stood women and people from ethnic minorities in this country in very good stead; and I am proud that it was a Labour government that enacted that legislation.

I should like to thank the noble Lord, Lord Moynihan, for his acknowledgment of the role that the Government played in relation to the disability aspects of the treaty. It was at the Government's insistence that a declaration was included in the treaty calling on Community institutions to take disabled people's needs into account when framing the single-market legislation. We believe that this will give the Commission a clear signal, when drafting legislation, not to overlook disabled people's interests. I believe that the thousands of disabled people in this country will consider that a not inconsiderable part of the treaty. I believe that they will think it an important and much needed part.

We should not fool ourselves that the situation in this country is perfect regarding the state of our anti-discrimination legislation; but neither do we need to be blind to the advances that we have made. We should like to see these advances against unfair discrimination reflected elsewhere in Europe. We believe that this article is a sensible provision which will help in that respect.

I should like to turn now to Amendment No. 50, about which the noble Lord, Lord Pearson of Rannoch, spoke. The amendment made in the Amsterdam Treaty to this article makes EC rules to prohibit discrimination on the grounds of nationality subject to co-decision. This means that the agreement of the European Parliament, as well as that of the Council, is needed for EC legislation in this area. The article has been little used, but it was used, for example, for a 1993 directive on the rights of residence of students.

We support co-decision because we believe that the European Parliament has an important oversight role in the EC legislative process, especially in areas like this which are subject to majority voting in the Council. Extending co-decision is a limited but sensible enhancement of that role. It does not enable the European Parliament to propose an Act or to insist on a proposal opposed by the Council.

We recognise that the co-decision procedures need to be streamlined. That is why we agreed in the IGC to changes to the procedures to simplify them. We must ensure the right balance between the proper legislative oversight role of the European Parliament and the requirement for efficient EU decision-making.

We do not see enhancing the European Parliament's oversight role as an alternative to strengthening the role of national parliaments. On the contrary, we believe that the two are complementary. So we strongly support the new protocol on national parliaments. This creates a new legally binding minimum period for national parliaments to scrutinise the new legislative process.

I said that discrimination on grounds of nationality has always been banned. It is a basic principle, and nothing in Article 12 changes that. The way in which the principle applies to the common fisheries policy, the point exercising the noble Lord, Lord Pearson, is through the requirement of non-discrimination in the provision of freedom of movement and freedom of establishment. I hope that that gives the noble Lord some handle on the matter.

The common fisheries policy allows national fishing quotas; however, the quotas cannot under EC laws be applied in a way which discriminates between one nationality and another. That is why the previous government's efforts to introduce provisions through the Merchant Shipping Act were struck down by the ECJ. We shall be able to discuss this area, which I know particularly interests the noble Lord, in rather greater detail when we debate the amendments on quota-hopping.

If my replies to these matters have not been to the satisfaction of noble Lords, then at least I hope that I have covered the points raised in the debate. I hope that the noble Lord will now be willing to withdraw the amendment.

Lord Stoddart of Swindon

I deliberately did not speak until I had heard what my noble friend had to say. We always hang on her words very closely. I was pleased to hear her confirm that decisions can be taken under this article only by unanimity. That is true; and they can be discussed only on the initiative of the Commission, and not of any single country.

I have to say that I am not quite as reassured as I should like to be. If a decision was made under this article, by unanimity, it could come into operation in this country without the consent of this Parliament, although under other provisions Parliament is given the opportunity of examining the provisions over a period of six weeks. Let us make no mistake about it. Once the decision has been taken, by unanimity or whatever else in the future, that becomes law and does not need the British Parliament, or any other parliament for that matter, to bring it into domestic law. I feel sure that I am right on that point. Therefore, we have to be extremely careful about what we are doing. That was the reason for tabling this amendment. It was not tabled because some people are more racist or less racist than others. It was tabled so that we could have a full and proper discussion. That discussion has taken place, and will perhaps continue to take place.

An examination of Article 13 indicates that there can be absolutely no problem about discrimination on grounds of sex, racial or ethnic origin, disability or age. I do not think anybody would worry at all about those items. In this country we have built up a great body of law and practice which is good and is admired in many parts of the world. Certainly, nobody would want to go back on that. If other countries wish to adopt our ways, we should be very pleased.

But the matter goes further than that; and this is what worries many people. We are now entering the realms of religion and belief and sexual orientation. Those subjects are fraught with enormous difficulty. In relation to religion there could be enormous problems. There are all sorts of different religions throughout the European Community. It is understandable that church leaders, in this country and other countries, will be worried about this proposition being included in an article of this sort. We must therefore take account of those worries and try to deal with them, not merely set them aside.

Baroness Nicholson of Winterbourne

Perhaps the noble Lord will give way. I am grateful to him. I did not intend to interrupt his peroration. However, he made some specious claims on behalf of disability legislation in this country and contrasted our legislation and practice very favourably with that in other European Union member states. Perhaps I might bring him up on the point about the provision of hearing equipment for those with significant deafness such as myself and tell him that Germany, which he criticised heavily some two weeks ago, has far more advanced legislation and practice on the treatment and provision of hearing aids and equipment for the deaf than does the United Kingdom, which lags very far behind. Will he please therefore withdraw his comments on disability legislation? It is just one example; I can give him many more.

Lord Stoddart of Swindon

I do not think that I am prepared to withdraw my remarks. I did not specifically refer to this country being better than every other country in all matters. I have no doubt that there are other countries of the Community that do things better than we do, and that we do things better in this country than many other countries of the Community. I am sure that the noble Baroness is right. If the Germans have better disability legislation than we do, then the sooner we follow them the better. However, I do not believe that we need Article 13 to enable us to do so. We can do that through our own Parliament and our own decisions. I hope that that answers the noble Baroness and that it brings us somewhat together.

There are, as I said, very real difficulties. I do not know how "belief" is defined, and what appropriate action could be taken in relation to somebody's belief. We run into all kinds of difficulties when we try to deal with these matters by laying down legislation of this sort. And what is discrimination against sexual orientation?

The noble Lord, Lord Tebbit, raised the matter of whether we wish to employ homosexuals in the scout movement? As a matter of fact the movement does employ homosexuals. It was recently decided that it is perfectly all right to do so. That is a matter for the scout movement, and of course the parents.

Lord Tebbit

The noble Lord may not be aware that there is a separate scout movement which is gaining many adherents because it undertakes that it will not employ homosexuals as scoutmasters. Clearly, we are in the happy position at present that each of those movements can take the view that it likes and parents can decide to which movement they prefer their children to belong.

Lord Stoddart of Swindon

I did not know that. We learn something every day. In that case the matter becomes even more worrying. This article might very well mean that the new scout movement which guarantees not to employ people of a homosexual bent may very well be declared illegal. That is one of the problems that may arise when entering into legislation of this sort.

Another matter comes to mind. If people wish to be homosexual, bisexual, trans-sexual, or whatever else, I have no problem with that. It is entirely a matter for their own choice. However, those who employ people of that orientation also have to have a choice. I fear that that choice may be taken away from them. For example, if you have children and want them looked after, you may well wish them to be cared for by a heterosexual. It would be completely wrong if the state came along and said: "You may not make that choice". That is why I believe that to bring such matters of personal choice, personal habit and personal belief into a clause of this kind is wrong. I hope that the Government will think carefully when dealing with the matter in future discussions within the European Community.

I also ask for an assurance—I am sure it will not be given—that we shall never agree to QMV on this article.

7 p.m.

Baroness Symons of Vernham Dean

I wish to make a couple of points in relation to what the noble Lord said and of which it might be helpful to remind the Committee. First, the provisions are subject to scrutiny. Any legislation would have to be agreed by an elected government of this country on the basis of unanimity in Europe. I believe that there are safeguards—if that is the appropriate word—in trying to deal with some of the perhaps more extreme difficulties that some Members of the Committee have raised this afternoon in relation to the provision.

The noble Lord asked finally about the extension of QMV. I am in no position whatever to give open-ended commitments on the extension of QMV. All I can say is that it is a recently negotiated treaty. The Government negotiated on unanimity because that is what they believed to be appropriate. So the unanimity is something that the Government wanted. I am sure the noble Lord, Lord Tebbit, would be angry with me if I said that it stood for all time, as would others. It is for future governments to decide what they wish to do in that respect. I cannot make decisions that would be binding in that way, as I think the noble Lord knows.

Lord Tebbit

The noble Baroness has just said something which we should think about deeply. She said that she could not bind future parliaments. Quite so. It is one of the great traditions of British constitutional law that parliaments cannot bind their successors. Here comes the double-edged sword of unanimity in decisions which might be made under this article. If a parliament accepts that its government, which is formed from its ranks, should agree to a proposal which was put forward under this or any other provision of the treaty and it is enacted by unanimity, exactly how does a subsequent parliament escape from that law? It has in effect been bound.

So we now find that parliaments can and do bind their successors under European law. We would be bound, unless we were able to persuade every other member of the Community to agree with us to repeal the legislation which had been enacted.

Baroness Symons of Vernham Dean

The noble Lord is most kind to give way. I was responding to a specific point raised by the noble Lord, Lord Stoddart, in relation to QMV and future voting on Article 6a, which is currently on the basis of unanimity. I said it was on that basis because that is what the Government felt was appropriate. The noble Lord asked me about the future.

Treaties change, governments change. A future government might take a different view. The noble Lord should read no more than that into it. We have had this discussion with him in relation to every single one of the groupings we have taken so far, and I am sure that we shall continue the discussion in relation to every one of the groupings we still have to deal with. I believe that at one time there was an amendment on the Marshalled List which dealt specifically with the point. It is not clear why it was withdrawn, but if there is something the noble Lord wishes to pursue, perhaps it would have been the most appropriate vehicle.

However, this is no more nor less than what we have said on the point. We stand in grave danger of rehearsing the argument over and over again. I am sure it would not meet the noble Lord's point, but my noble friend Lord Whitty dealt with it successfully when winding up on the previous group of amendments.

Lord Tebbit

That is quite right, but it underlines once again that the noble Baroness should no longer, ever, use the expression that one parliament cannot bind its successors. That is precisely the position we are in now; parliaments can bind their successors. By putting the provision into the treaty, in effect the Government have bound their successors.

There was one other point which I thought worth raising with the noble Baroness. We know the way in which the European Court works and leaps from point to point in a treaty and finds new ways to extend its influence. I suppose that one would broadly say that these provisions relate to what are generally referred to as human rights. I guess that most of us would take that view.

But then one looks back to page 10 of the Treaty of Amsterdam and finds Article E which tells us that Article F should he amended and should be replaced by the following: The Union is founded on the principles of liberty, democracy, respect for human rights and fundamental freedoms". It then goes on, under Article F.1, to make the point that if a government are found to be in breach of any of those principles, certain of their rights can be suspended, including voting rights.

I give a warning. No one on the Europhile side of the Committee will take it at all seriously, but here we are again. We have extended it. There is the opening, the wedge in the door to combine this section, Article 13, with Article F.1 and Article E. Just wait. Just watch.

Lord Stoddart of Swindon

Before the Minister answers, to save her getting up and down like a jack-in-the-box, perhaps I may intervene. The amendment to which she referred concerning one parliament not being able to bind its successor was taken off the Marshalled List because it was to be debated late at night or early in the morning. I can assure the noble Baroness that it will be brought back under the first business at Report stage.

I also wish to ask whether she was confirming that any decisions under this article, once made by unanimity, will not need any further legislation in this Parliament. That was what I asked. I believe I was right in saying that no further legislation would be necessary, but perhaps the Minister could confirm it.

Baroness Symons of Vernham Dean

It would depend on what the decisions were. They might be decisions which needed legislation. It would depend on the nature of the decision reached by the Council. I thank the noble Lord for his warning about the reappearance of the amendment. I had thought—wildly—that perhaps the noble Lord had thought better of it. However, I thank him for giving us adequate warning on the matter.

In relation to the point raised by the noble Lord, Lord Tebbit, he will not have to wait long for a discussion. We will either reach it later this evening or at some point in our debate tomorrow.

Lord Pearson of Rannoch

I am grateful to all Members of the Committee who have spoken, especially those who supported these two amendments. Most of the debate took place on Amendment No. 13, which refers to the new Article 13 in the treaty.

Amendment No. 50 deals with Article 12 and its co-decision procedure. I am grateful for what the Minister said in that regard. It confirms the question of discrimination on grounds of nationality, whatever that may come to mean in the future. It will depend on a qualified majority vote in the Council supported only by the agreement of the European Parliament.

I was trying to look a little further into the future as to how the article might be used in view of the well-known action of the famous salami slicer of my noble friend Lord Tebbit, to which he has just referred again. I was grateful for the Minister's answer, in so far as it went, concerning the application of that principle to the common fisheries policy. I was trying to get at whether the article might not lead to the eventual disappearance of European nationalities under the Treaty of Rome. We did not quite conclude that, but I am happy to leave the fisheries aspect to quota hopping and related matters.

As to Amendment No. 13, I take the point made by the noble Lord, Lord Desai, and others that it would be nice if we could go anywhere in Europe and the world and find anti-discrimination legislation, arising from prejudice as my noble friend Lord Hamilton so rightly said, as good as it is here. Of course we cannot. There is the rest of the planet to consider. I accept that many Members of the Committee may feel that this is a first step in that direction. However, for me and perhaps many other noble Lords, that somewhat dizzy prospect is not outweighed by the fact that this is the European Union making another step forward—as my noble friend Lord Tebbit and others pointed out—into national sovereignty and that these anti-discrimination clauses are more properly the attribute of a state than a market.

Some of the questions asked concerned the difficulties of our obvious and proper tolerance, for instance, of the Moslem religion. But what do we do when we come up against some of its less acceptable attitudes towards women? The whole question of national sensitivities was not properly concluded in this debate. Also, the noble Lord, Lord Stoddart, is absolutely right when he says that the issues of race, religion, disability or age are comparatively easy to deal with as set out in new Article 13, but other issues such as sexual orientation are much more difficult.

I asked what is the difference between religion and belief. I am sorry that the right reverend Prelate is no longer in his place; I thought that he might be able to help on that matter. What about belief? That is not an easy question. The noble Lord, Lord Stoddart, made the point that people should be free to do what they want in matters of sexual activity and so forth, but so should their employers be free to employ them or otherwise.

There is no question of dividing the Committee on the amendment this evening. I am grateful to all those who have spoken and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

7.15 p.m.

Lord Stoddart of Swindon

moved Amendment No. 14: Page 1, line 13, after ("2") insert (", other than paragraph 15 (Title IIIa of the Treaty establishing the European Community (visas, asylum, immigration and other policies related to the free movement of persons)),"). The noble Lord said: In moving Amendment No. 14, it may be convenient also for me to discuss Amendments Nos. 15 to 18, 45 and 51. This group of amendments deals with the freedom of movement of persons, border controls and the implications for Gibraltar. It covers immigration controls, asylum and other matters. It also incorporates the Schengen Agreement between certain countries in the European Community and is therefore subject to the acquis communautaire.

As the protocol states in its opening paragraph, the new Schengen acquis agreements are aimed at enhancing European integration. It means that the powers now given to the European Union cannot be reversed because the intergovernmental nature of the agreements no longer applies and all new applicants for membership will have to agree to the Schengen acquis before they will be allowed to join. Thus the control of borders, except for the United Kingdom, Ireland and Denmark, will come under the control of the institutions of the European Union, constituting yet another step towards the eventual creation of a single European state stretching from the Atlantic Ocean to the Russian border—yet another big step towards the creation of a country called Europe under the suzerainty of Germany. I am sorry to mention Germany again.

If anybody believes that my last statement is rather extreme, I recommend that they read the article by Graham Turner in the Daily Telegraph of Saturday, 28th March 1998. I shall not read it or quote it to the Committee because it is too long; I shall just read the title. It says, "Tomorrow belongs to Germany" by Graham Turner: Chancellor Kohl and his allies have managed to create by the ruthless exercise of political will the empire that Hitler failed to fashion by military conquest". That is not the Euro-realist Stoddart saying that; it is Graham Turner, a distinguished journalist of long standing.

What is more, life will be made more difficult for travellers and workers from eastern Europe. The Schengen acquis will simply be a further step towards the building of a fortress Europe. Those are basic reasons for not wishing to see the Schengen acquis incorporated into the European Community even though the United Kingdom, Eire and Denmark will not be part of it, at least in the early stages. As I said, Britain has an opt-out and will retain control of her borders. She will continue to have the right to refuse entry to any citizen of a third country and, presumably, of the European Union and European Economic Area citizens, though I am not sure how refusal of entry to the two latter categories will work. Perhaps my noble friend will explain that to me when replying to the debate.

Britain and the other opted-out countries will have the right, at some future stage, to apply to join the Schengen acquis, though I hope I can be assured that the present Government will never make such an application. But any such application will have to have the unanimous consent of existing members—a condition smuggled in by Spain, no doubt with some ulterior motive concerning the future of Gibraltar. As we all know, the Spanish authorities make endless difficulties for Gibraltarians and others wishing to go to and from the Rock. They do so with a blatant disregard for the principle of free movement of people enshrined in the treaty of the European Union to which Spain is a party. The noble Lord, Lord Moynihan, will no doubt wish to elaborate on the position of Gibraltar when he speaks to Amendment No. 45, so I shall not say anything further about that aspect.

The claim is made for the Schengen aquis that it will make it easier to catch criminals, but I have to say that the reverse would seem to be the case. Surely the fewer the border checks, the easier it will be for criminals to extend their criminal activities and the more difficult it will be to catch them. That is the conclusion I would come to, but apparently some people believe the reverse. I should like to know the reason for that. The Italian Mafia have already made a killing out of fraud in the European Union and they must be licking their lips at the prospect of a Europe-wide bonanza for themselves and other criminals out of this arrangement and when the border controls are loosened further.

There are many questions arising from the Schengen aquis which need to be answered. For example, what will be the position regarding asylum? Will the United Kingdom be able to reject mass applications for asylum when people travel through the European Union from such places as Slovakia or Kurdistan, or anywhere else for that matter? Will this country be able to exercise its full authority to reject applicants for asylum under such circumstances without making special agreements with the various countries of the European Union, as has previously happened in relation to Albanians who came here through Italy? We had to make a special arrangement and agreement with Italy before we could return them to that country. Perhaps my noble friend would be kind enough to deal with that point when he speaks.

I come back to the issue of European Union citizens wishing to enter the United Kingdom. Will British immigration officials be able to examine the official identity documents of any entrant—his passport or any other document he may have such as an identity card? Will immigration officers be able to search his person? Will immigration officers be able to examine his belongings or detain him temporarily for further inquiries? Will they be able to detain him for longer periods if that is thought appropriate? I am talking here about citizens of the European Union.

This is undoubtedly an important issue. Although the United Kingdom will not be part of the aquis in its early stages, there are implications for this country, especially in the long-term and even more especially if we foolishly decided at some future date to accede to the Schengen aquis. On that point, I should like to ask my noble friend a final question. What would be the position of Parliament if the Government decided to opt into the Schengen aquis? Would such a decision require parliamentary approval through primary, or even secondary, legislation, or does Parliament's ratification of the Amsterdam Treaty through this Bill give the Government full authority without further reference to or decision by Parliament? Would the Government be able to accede to the Schengen aquis provided all the other member states agreed to such accession, which of course is implicit in the Bill?

Those are very basic questions and I hope that my noble friend will be able to answer them this evening. If not, I should like him to study the matter and perhaps write to me as and when he can. I beg to move.

Lord Chesham

I should like to speak specifically to Amendment No. 45 on the position of Gibraltar. For nearly a decade the status of Gibraltar has been an obstacle to agreement among the member states on a convention to control third country immigration into the EC/EU. A common visa format and a policy for crossing the EC/EU's external frontiers has not been possible to agree.

In 1993 the Spanish Government refused to ratify a draft external borders convention because of its application to Gibraltar and insisted that the southernmost external frontier of the Union should be at La Linea, on the southern tip of Spain. Recognition of Gibraltar as an EU frontier would give Gibraltar a status unacceptable to the Spanish Government because of the Spanish objection. The draft convention has not come into force and has to a certain extent been superseded by Schengen and other EU developments.

In his evidence to the Foreign Affairs Committee in November 1997 the Chief Minister of Gibraltar, Mr. Peter Caruana, identified incorporation of the Schengen agreement into the Community pillar in the Amsterdam Treaty as one of the main areas of concern. Schengen was in fact an earlier agreement than the external frontier draft. It was agreed in 1985 by France, Germany, Belgium, the Netherlands and Luxembourg. When it came into force in 1995, those countries had been joined by Spain and Portugal. By mid-1997 there were 13 full Schengen members—all the EU member states except the UK and Ireland, with associated status for Norway and Iceland as members of the European Economic Area. Should the British Government decide to join the Schengen aquis in the future, the unanimity requirement in the Amsterdam Treaty could mean that entry by Britain, and by extension Gibraltar, would be blocked by the Spanish Government unless Britain agreed to exclude Gibraltar, which could result in further obstacles to free movement to and from the Rock.

The Conservative Government did not intend to join Schengen because it was considered incompatible with the UK's policy on the need to retain border controls. The Labour Government have expressed similar views and have said that they have no intention of joining. The Gibraltar Government, on the other hand, are for economic reasons extremely keen to join Schengen and be free of both official and unofficial border controls.

The Schengen aquis and provisions to build on it were included in the Amsterdam Treaty as a protocol integrating the Schengen aquis into the framework of the European Union. The UK will not be a party to the Schengen aquis, as provided by Article 4 of the protocol, but, may at any time request to take part in some or all of the provisions of this aquis". Shortly after the Amsterdam summit the Minister with responsibility for Europe was asked what arrangements had been made for Gibraltar to enter the Schengen area if it decided that it was in its interests to do so. The answer given was that it was up to the United Kingdom to decide and that since Gibraltar is part of the UK for most EU purposes there could be no question of unilateral decision-making in this area by the Gibraltar Government. That could have interesting ramifications when we come to the Committee stage of the European Parliamentary Elections Bill.

In evidence to the Foreign Affairs Committee in another place, the Foreign Secretary, Mr. Robin Cook, discussed the treaty protocols and declarations in relation to the possibility of future British membership of Schengen and insisted that there was nothing in the treaty that altered the status between Gibraltar and Spain or gave Spain power to impose border controls on Gibraltar. There were reports of a misunderstanding at the time of finalising the Amsterdam provisions on Schengen which have added some confusion to the nature of the opt-in arrangements. Apparently, Spain did propose an amendment to have the effect of bringing in unanimity for UK participation in the Schengen acquis. There was an agreement that this should be submitted in writing by Spain, which was not done. The subsequent change to the treaty, we are advised, was a bilateral agreement between Spain and the Dutch presidency.

The position of Schengen in the Amsterdam Treaty remains somewhat confusing. According to Mr. Cooke, Spain had not deposited its proposal in writing with the presidency to be agreed by all member states, and yet it was written into the treaty allegedly as a result of a bilateral agreement between the Spanish Government and the presidency. I believe that Amendment No. 45 would clarify the position as far as the United Kingdom and Gibraltar are concerned. I support it.

Lord Monson

My Lords, I put my name to Amendment No. 18 and I meant to put it to Amendment No. 45 but because of some oversight I failed to do so. So the noble Lord, Lord McIntosh, will understand that I, too, am very concerned about Gibraltar. As the noble Lord, Lord Stoddart, reminded us, Spain has caused endless trouble for both Gibraltarians, British visitors and British residents at the frontier, totally contrary to the Treaty of Rome, which has nothing to do with the Schengen agreement and ante-dates it by decades. As the noble Baroness, Lady Symons, said when speaking to Amendment No. 13 a half hour or so ago, discrimination on the grounds of nationality has always been banned.

I complained at Question Time some weeks ago about one serious incident involving very senior British personnel. The noble Baroness, Lady Symons, was good enough to write to me. May I take this opportunity to say how impressed I am by the way in which Ministers of this Government always do write to one when they say that they will do so. They write at length and promptly. That is most commendable. She wrote to me at some length explaining that the British Ambassador had complained to the Spanish authorities, who had apologised and promised not to do it again. As we know, that sort of thing still does happen, but perhaps the incidents are not quite so serious. I hope that, whatever happens, pressure will continue to be brought to bear on Spain to behave in a civilised manner, as the Treaty of Rome should compel it to do.

The other aspect of this article which concerns me is that there is a danger that, by abolishing all the internal borders of the Community and strengthening the external borders, it will make the probable introduction of a Europe-wide identity card more likely, which for anyone with libertarian tendencies is worrying. Another aspect is that it will make life for our Commonwealth friends who fought for us in World War II even more difficult. It is already humiliating for ex-servicemen and others to have to queue for hours at immigration to enter, although those from Guadaloupe, Macao and elsewhere apparently get in without any problems. All this is a matter of worry. For that reason I support the amendment.

Lord Hoyle

I beg to move that consideration of Amendment No. 14 be now adjourned and that the House do now resume.

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

House resumed.

Lord Hoyle

My Lords, I suggest that the Committee stage begin again not before 8.35 p.m.