European Communities (Amendment) Bill

HL Deb 12 May 1998 vol 589 cc1030-70

8.36 p.m.

Consideration of amendments on Report resumed on Amendment No. 3.

Baroness Symons of Vernham Dean

My Lords, I think in truth that what the noble Lord has presented us with is a wrecking amendment. If passed, it would prevent the United Kingdom from taking part in any decision under the common foreign and security policy until both Houses of Parliament have passed a resolution on the CFSP. That would mean that, once the Amsterdam Treaty was enforced, we would, under domestic UK law, be prohibited from participating in the CFSP, which would then be virtually inoperable. We could not in good faith ratify the treaty subject to that constraint. So it will not come as a very great surprise that the Government cannot accept this amendment.

However, as the noble Lord, Lord Moynihan, acknowledged in Committee, in an interdependent world it is important that we co-operate with our EC partners on foreign policy when we have common interests. That means pooling EU efforts where sensible and in line with United Kingdom national interests. Collectively we can exercise more weight on the world stage.

However, a single supra-national CFSP would not be more effective. CFSP is based on the will of member states to act together. That will cannot be artificially created through institutional mechanisms such as QMV. If member states do not hold convergent positions, we should not try to create a false consensus. Such a hollow common foreign policy would weaken, not strengthen, the weight of the EU on the world stage, since member states would be quick to undermine that policy behind the scenes. I believe that there is a large measure of agreement on that point between the noble Lord, Lord Moynihan, and Her Majesty's Government.

That is why the Government ensured, as we committed ourselves to do in our manifesto, that under Article J.13 no member state can be forced to act, or not to act, against its will. Member states in the Council remain in firm control of CFSP and the presidency remains in the lead in managing it.

The CFSP provisions of the treaty introduce practical steps to streamline decision-making and financing arrangements, to improve the quality of Council Secretariat advice, to improve external representation of the EU, and to enhance the armoury of instruments for action at member states' disposal. It is a good result for Britain and for the European Union.

I wish to cover each of these improvements in a little more detail. I turn first to decision making. In line with their negotiating aims, the Government preserved at Amsterdam the UK's ability to require unanimity in CFSP decision-making. Article J.13 preserves unanimity for all decisions on common foreign policy in the form of common strategies, or of joint actions and common positions not agreed on the basis of common strategies; and for any decision with military or defence implications.

Maastricht allowed for QMV for implementation of agreed foreign policy. Amsterdam makes that automatic. Further, and usefully, it adds the ability constructively to abstain when a member state does not want to be forced to act, but does not want to stop others from doing so. The decision on whether to abstain or not is for the individual member state, and that state alone. So constructive abstention cannot be used to make a member state act against its national interests if it is in a minority.

These two measures usefully streamline decision-making. The UK has for many years played a leading role in CFSP and will continue to do so. So QMV and constructive abstention are to our advantage. They allow more effective implementation arrangements for what we want. EU election monitoring, for example, could not be held up by bickering over precisely how many monitors to send. Less active member states could stand aside without blocking action by others.

However, if there is a real difference, the noble Lord, Lord Moynihan, is right: the so-called "emergency brake" provision in Article J.13(2) is an important safeguard which recognises the potential sensitivity for all member states of any such decisions by QMV. It allows any member state to require that any decision be taken by unanimity. The individual member State has independent control over whether and when to pull the emergency brake. The noble Lord asked for an assurance about whether anyone else would arbitrate. The answer to that is no.

The noble Lord invited me to say which current issues in foreign policy will be the subject of common strategies. As the noble Lord knows, the treaty does not define when a common strategy must or must not be used. Common strategies will come into being when heads of state and government recognise that there is enough common ground in their approach to a foreign policy issue to warrant agreeing a framework which can be the basis of future action. But the noble Lord went on to imply that the member state would have no power to block subsequent joint action or common policies agreed by qualified majority. The answer to that is the emergency brake mechanism, which can be applied so the national veto is retained.

If such an issue were referred back to the European Council, the member state which had pulled the emergency brake might well feel itself under some political pressure, but it will have used the emergency brake only to protect a key national interest. Therefore, it will no doubt stick to its position. It is for the member state alone to decide what is a key national interest.

The noble Lord invited us to consider what he referred to as a case study—that of Sierra Leone. Perhaps I may remind the noble Lord that a Customs investigation is under way into alleged breaches of UNSCR 1132. The Foreign and Commonwealth Office is co-operating fully and openly. There was no ministerial prior knowledge or approval of any breach of the arms embargo. It has not been established whether UNSCR 1132 has been breached or whether the Government were in any way involved in such a breach.

I do not wish to dwell on the matter in quite the excitable way the noble Lord seemed inclined to do, but the Foreign Secretary did not disown officials. The Foreign Secretary went out of his way to make it clear, as I did yesterday in your Lordships' House, that no one should rush to judgment. I said to the noble Lord, Lord Avebury, yesterday that I would write to him about the serious matters he raised in relation to Sierra Leone. It will be a sensible and considered reply. If the noble Lord, Lord Moynihan, would like a copy, I shall of course be happy to send one to him. But I urge the noble Lord to be sensible and calm about this. We have to wait for the facts. Rushing to judgment, as it seemed the noble Lord was a little inclined to do, is not the sensible course of action at the moment. We know the key facts on Iraq; we do not know the key facts on Sierra Leone. If we are looking at case studies, I say to the noble Lord that a case study needs facts and I suggest that he, like the rest of us, should have the patience to wait for those facts.

Looking at one of the examples which the noble Lord wanted us to consider, the EU agreed a joint action on how to handle the transition to democracy in South Africa. Subsequently, the Council decided on the resources which should go to that end. It is quite possible that, if common strategies had existed, heads of state and government might have chosen a particular route because of all kinds of decisions likely to be taken under it, if they were relatively uncontentious.

I hope that I have managed to answer the sensible points which the noble Lord raised and that I have encouraged him to be a little more sensible about some of the other points which he seemed inclined to draw us into.

Baroness Williams of Crosby

My Lords, I wish to make only one point.

Lord McIntosh of Haringey

My Lords, we are at the Report stage. Only the mover of the amendment can speak after the Minister.

Lord Moynihan

My Lords, I am grateful to noble Lords who have contributed to the debate. I am particularly grateful to the noble Baroness, Lady Ludford, for her initial remarks. I have never been paid so great a compliment by a colleague from another party. I am concerned that my example was not as apposite as she might have liked. She went on to develop it in some detail, picking up six threads of the argument that I developed during my speech and making interesting observations on them. Clearly, she felt it important to consider those points and I am grateful to the Minister for responding to them.

My noble friend Lord Howell, was right in airing and echoing the reservations that I made in my opening remarks, particularly the point that it was fine to adopt common positions but that there was real concern about the move from common positions to common strategies and, ultimately, the more important move from common strategies to common policies. That point and the contribution which was made by my noble friend at this stage was extremely important.

I note and appreciate, although I am somewhat surprised, that the Minister came back on the example that I used of Sierra Leone. I simply state to the House that the fundamental point that I was making in the context of this amendment is that if the Government do not know their own policy, how can they possibly influence foreign policy in Europe? There is no better contemporary example of the importance of that point than Sierra Leone and thus my detailed analysis this evening.

I agree totally that case studies require facts. It appears that government Ministers do not have them. I was putting a number of important points to this House in the context of what we have been informed by Ministers in order to develop the point that it is clear that the fast-moving, fast-shifting sands of explanation which we are having on an almost daily basis on a foreign policy issue would cause very real difficulties for Ministers going to Europe and trying to establish a common policy position on what might be an extremely important issue. Certainly Sierra Leone is an important issue and there are implications within Europe which may well lead it to become an important issue for Europe, not least in relation to European Union arms embargoes with regard to Nigeria.

That is the reason that I raise the issue. I am pleased that I gave that example. I am grateful to the Minister for placing on record yet more reflections from the Foreign Office on the important questions that I raised.

Finally, in no way was my amendment intended to be a wrecking amendment, and I would happily debate that issue. However, we have had a useful debate on this matter and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Moynihan

moved Amendment No. 4: After Clause I, insert the following new clause— BORDER CONTROLS: IMPLICATIONS FOR GIBRALTAR (". Her Majesty's Government shall not exercise the opt-in to border controls set out in Protocol 4 to the Treaty signed at Amsterdam on 2nd October 1997 amending the Treaty on European Union, the Treaties establishing the European Communities and certain related Acts until each House of Parliament has cone to a Resolution on a motion tabled by a Minister of the Crown relating to the implications for the people of Gibraltar of the voting arrangements for such an opt-in."). The noble Lord said: My Lords, this amendment relates to the position in Gibraltar at present. I say straightaway that I particularly regret the fact that it is necessary to return to the issue of Gibraltar and Britain's opt-in to the Schengen acquis. In Committee, I went into some detail on my amendment as to the implications for the people of Gibraltar of the voting arrangements for the opt-in to border controls. I did not do that because I sought to analyse policy differences between the Opposition and the Government. Indeed, as I have made clear repeatedly, this is an area of the treaty as regards which we wholeheartedly support the Government for maintaining the previous government's policy in retaining sovereignty over Britain's border controls. It was not because I sought to explore the nature of the provisions. No, indeed. In Committee, I went into detail because I sought an explanation and perhaps even an apology to the people of Gibraltar for the Government's apparent utter ineptitude and negligence in handling those negotiations. Nowhere in the treaty is ministerial incompetence more obvious than in respect of the issue of our opt-in to border controls.

As noble Lords will recall, I set out the catalogue of incompetence, conflicting views and contradictory statements from the Government regarding Gibraltar. I had hoped that in Committee, the facts would be presented to us frankly and openly so that once we were in possession of all the facts, we should be able to determine whether it was most appropriate to accept the Government's explanation or to demand an apology. But my hopes were severely disappointed. I am now in a position of having to press the Minister on this matter.

First, I sought clarification on the precise areas of the treaty to which the Prime Minister referred in his Statement of 18th June 1997. He told another place that what we have secured, which is important and is a better way of going about things, is what I call an opt-in. We have the power within the treaty to go into any of these areas if we want to. If we do not want to, we need not, but if we do, no other country can block us going in".—[Official Report, Commons, 18/6/97; col. 319.] I should be grateful if the Minister would clarify whether that statement referred only to the new Title IIIa on asylum, immigration and visas or whether it referred also to the Schengen acquis. If it referred only to the new Title Ina, why did the Prime Minister use the Schengen acquis to illustrate his point? Clearly, if the Prime Minister's statement did refer to the Schengen acquis, then it has subsequently been shown to be incorrect and the Foreign Secretary misled those in another place.

Secondly, I sought clarification from the Minister on the issue of Article 4, the protocol, integrating the Schengen acquis into the framework of the European Union. I sought to understand how the Foreign Secretary allowed a late amendment from the Spanish Prime Minister to be accepted into the treaty by default in the early hours of the morning on 18th June, meaning that any member state, including Spain, will have a veto over future opt-ins to the Schengen acquis which will be decided by unanimity rather than by QMV.

That blunder by the Foreign Secretary potentially hands the Spanish a powerful bargaining chip with which to exact concessions over Gibraltar. I welcomed the assurance of the noble Lord, Lord McIntosh, in Committee that the Government would: continue to defend vigorously the position of Gibraltar in the European Union and the Community law rights of Gibraltarians".— [Official Report, 27/4/98; col. 105.] That answered one half of the question to the Foreign Secretary from the noble Lord's colleague in another place, the honourable Member for Wrexham, which I repeated in Committee. Like me, he wanted to know whether that had happened simply because, Her Majesty's Government do not care about Gibraltar and give it a low priority, or was it just a Government cock-up? I had hoped that the noble Lord would take the opportunity to answer the other half of the question and would cut cleanly through the morass of negligence and blunder and the catalogue of confused and contradictory explanations which followed to produce a clear, consistent and coherent explanation of what happened.

However, an embarrassing multitude of questions remain unanswered. All we know for sure is that the Foreign Secretary thought he had agreed to one arrangement—opt-in by QMV—only to discover that he had agreed to something completely different; that is, opt-in by unanimity. After that, the version of events twists, turns and spins out of control, depending on who is doing the explaining.

I shall ask those specific questions to which I did not receive a reply and perhaps this evening we shall be given some conclusive answers. Did the Foreign Secretary actually challenge the Spanish Prime Minister's late amendment, causing it to be withdrawn as he says he did? If so, why was the Dutch presidency unaware of such a challenge?

The Government have called this a "difference of historic interpretation". What is a difference of "historic interpretation" in plain English? Is it not the case that one party is telling the truth and the other party is not? In that case, who is telling the truth—the Foreign Secretary or the Dutch presidency? Either answer would have very serious consequences. It is not even clear whether the Foreign Secretary challenged the proposal for an amendment itself. The Foreign Secretary has told us that the amendment was withdrawn when he challenged it, while the noble Lord, Lord McIntosh, told us in Committee that no amendment was submitted. He told us that: During the course of the debate at the European Council, Spain proposed an amendment to the Schengen Protocol to bring in unanimity for UK and Irish participation in the Schengen acquis … At the insistence of the Foreign Secretary, there was agreement that any such amendment should be submitted in writing by Spain".—[Official Report, 27/4/98; col. 105.] He went on to say that no such amendment was submitted.

Never mind that relatively minor disparity. So far, so good in the Government's negotiations. The Foreign Secretary challenged either a Spanish amendment or a Spanish proposal. The Spanish backed down and either withdrew the amendment or decided not to submit it formally. But if, thanks to the Foreign Secretary's insistence, the amendment was not formally submitted or if it was withdrawn, why did it mysteriously reappear in the text of the treaty when the Foreign Secretary received it after the summit? Again, in Committee, we received no answer. Was it really the result of a deal done between the Spanish Government and the Dutch presidency which was kept secret from the other member states and incorporated into the treaty after the negotiations had finished, as the Foreign Secretary has claimed? Will the Minister today give the House consistent details of the secret deal? We do not even know for sure when it was concluded. Was it during the summit on the nights of 16th and 17th June, before the negotiations had finished, as the Minister of State thinks? Surely that cannot be correct since the Foreign Secretary has told us that at that very same time, the Spanish amendment was in its death throes thanks to his bold, on-the-ball challenge?

The Foreign Secretary said that this hole-in-the-corner deal between Spain and the Netherlands was concluded after the conclusion of the summit and that he found out about it a week later when he received the text of the treaty. But it seems that his Minister of State knew the day after the summit was concluded when he received a copy of the revised treaty on 19th June and not like the Foreign Secretary, after a whole week.

How come the Minister of State failed to inform the Foreign Secretary of what has happened? Perhaps that lapse is not surprising, as we have come to appreciate more recently that communication among Ministers, the Foreign Office and its officials is clearly at a low. At one point the Minister of State tried to combine both explanations when he said that the deal was done between the Dutch presidency and the Spanish Government in the margins of the summit and then discussed afterwards.

I had hoped that the noble Lord, Lord McIntosh, would throw some light on the matter; but, sadly, he failed to shed any light on the point when he told us in Committee: When the revised text was circulated after the Summit, we subsequently learnt that the unanimity requirement had been introduced into the text".—[Official Report, 27/4/98: col. 105.] Can the Minister clarify this evening once and for all when the Government first learned that the unanimity requirement had been introduced into the text of the treaty?

In alleging that the text of the treaty was changed to the detriment of the UK, are the Government in fact saying that they were effectively cuckolded by the Dutch presidency and the Spanish Government as a result of a private deal between the two member states, which was not communicated to the rest of the Council? The Government's explanations for the whole of this affair have ranged from a genuine misunderstanding between member states—largely caused by the Dutch presidency's inefficient note-keeping which meant that the Foreign Secretary's successful challenge could not be proved—through to conspiracy theories of two member states—one of which held the presidency at the time—knowingly conniving to dupe a third member state against its clearly declared wishes.

If the Foreign Secretary was so forceful in making his views known, as he says he was, it follows that Spain and the Netherlands must have deliberately fiddled the text of the treaty without the full consultation of all member states. Both explanations put the Government's negotiating ability in an incompetent bungling light. But the latter allegation of hole-in-the-corner deals between member states, following the conclusion of an intergovernmental summit, is most serious and has ramifications for the transparency of the European decision-making process, and I emphasise that point. This case is important in its own right, but it is vital in the context of its ramifications for the transparency of the overall European decision-making process.

Yet while these serious allegations were being bandied about, the Government made no representations at all to the presidency of the EU about the bilateral agreement between Spain and the Dutch presidency. I see that the Minister, from a sedentary position, is saying, "Yes, we did". That is extremely helpful. I hope that the noble Lord will clarify when he did that—if he indeed did—and why the matter was not raised as a priority at the Luxembourg summit last September. I am grateful to him for his clarification. Perhaps he can answer my question about the Luxembourg summit. If it was a misunderstanding because the note-keeping of the Dutch presidency was at fault, as the Foreign Secretary first told us, and as the noble Lord, Lord McIntosh, confirmed when he said in Committee on 27th April (Hansard, col. 105) that, It emerged that there was a misunderstanding about what had been agreed at Amsterdam", can the Minister now tell us how that misunderstanding came about? Was it because there were absolutely no provisions for minutes or a record of the meeting in question to be taken, as the Minister of State has claimed?

The Foreign Secretary has made very strong criticisms of the Dutch presidency. He has effectively accused the Dutch Government of inefficiency by criticising their note-keeping. He has effectively accused the same member state of not telling the truth about whether a challenge to the amendment was made. Moreover, he has effectively accused them of cheating by colluding in a secret deal. Not surprisingly, the Dutch Government have clearly been concerned by these extraordinary allegations and they subsequently wrote to the British Government as long ago as 16th July last year.

Despite the Government's commitment to open government and transparency, they have refused to publish that letter on the grounds that it is not normal practice for intergovernmental correspondence of that kind to be published. Similarly, it is not normal practice for one member state to accuse two others of cheating at intergovernmental summits; nor should it be normal practice for that member state to prove unable to provide a coherent and consistent explanation for a provision contained in a treaty to which it has agreed, which could have serious implications for the citizens of a dependent territory. The only consistency that the Government have demonstrated in this sorry saga is their repeated failure to provide a clear explanation for what happened.

The noble Lord, Lord McIntosh, said in Committee that, the important thing is not the process of what happened on a particular night, however late, in June, but the result".—[Official Report, 27/4/98; col. 106.] I do not agree that in this case what happened on a particular night has no importance, given the Government's prevarication. However, I do agree that the result of this confusion and its implications for the people of Gibraltar are of paramount importance. It seems that the result referred to by the noble Lord, which is supposed to rectify the whole situation, is the fact that the Government secured Declaration 45 which is attached to the final Act of the treaty. It sets out that the UK's admission to existing provisions of the Schengen acquis will be on the same basis as an Opinion of the Commission, which calls upon other member states to use their best efforts to enable the UK to participate.

However, the Minister omitted to mention that, had the Government done their job properly in the first place, Declaration 45 would never have been necessary. Similarly, the Minister did not answer the question of whether the declaration is legally binding in the same way as an amendment to the treaty. I invite him to do so now, especially in the light of the opinion of Mr. Peter Caruana, the Chief Minister of Gibraltar: we in Gibraltar have no doubt whatsoever that Spain will deploy her veto unless the UK agreed to exclude Gibraltar from the application of the Schengen arrangements". Our fears and concerns about the use of the Spanish veto on a future British entry into the Schengen arrangements are not imaginary. Spain will exercise the veto, just as it did in relation to the application for air liberalisation to Gibraltar, from which we are still excluded; just as it threatened to veto the external frontiers convention unless Gibraltar was excluded from it. As far as concerns Spain, the very same issues arise in respect of Schengen.

Finally, the noble Lord, Lord McIntosh, reiterated that, in practice, the Government have no intention of signing up to the Schengen acquis in full on the grounds that that would be inconsistent with our determination to maintain frontier controls. From these Benches, it will come as no surprise to the Minister that we welcome that assurance and support this seamless transition of policy.

In Committee I sincerely hoped that we would not receive yet another unsatisfactory explanation from the Government and that the questions that I put would be answered at that time. But an unsatisfactory explanation from the Government is precisely what, regrettably, we were given. The latest interpretation of events, apparently compiled from a mishmash of the different strands of the conflicting statements of the Foreign Secretary and his Minister of State, did nothing to refute in a satisfactory way the accusation that the Foreign Secretary's negotiation was negligent. It cleared up none of the lingering doubts about the Foreign Office's competence or its ability to protect and enhance British interests in all future negotiations, and it failed to sweep away the suspicion of gross dereliction of its duty. In this context when I refer to the Foreign Office, I refer to Foreign Office Ministers; I do not refer to the officials.

This has simply added to the confusion of an already messy situation which has made a mockery of the Government's claim to be respected as a constructive partner with which the other countries of Europe can do business. It has made a mockery of the Government's claim to have got a better deal for Britain as a result of their new, co-operative approach. This is an example which totally undermines the claims that their approach to negotiation in Europe is successful and brings benefits to both the people of this country and to the people of Gibraltar. I beg to move.

Lord Hardy of Wath

My Lords, I shall speak briefly. First, I should declare an interest in that I returned from a visit to Gibraltar this afternoon. A number of other noble Lords accompanied me on that visit. I feel that this should be a relatively short debate and that it should deal with some of the questions which the noble Lord, Lord Moynihan, has posed. However, I was worried by his speech as he seemed to be firing widely directed broadsides at the Government. I minded less his criticism of other member states. I believe that my noble friend and his colleagues in the Government have been striving mightily to assist Gibraltar. It ill becomes someone who was connected with the government who were responsible for international matters and for matters connected with Gibraltar for almost two decades to be so extravagant in his criticism of the present Administration. Indeed I believe the noble Lord mentioned a date that was only a matter of a few days after the present Government took office.

Nevertheless the questions posed by the noble Lord are serious. I am confident that my noble friend will respond to them adequately. I believe that in this debate we should concentrate on the Schengen Agreement. However, during the discussions that I and other noble Lords had with our hosts in Gibraltar over the past 48 hours, little was said about Schengen but much was said about the wider anxiety that exists. I believe the House will have to consider that. I would deeply regret it if the noble Lord's extravagant attacks on my noble friend led the House to consider this debate as a platform for the wider debate which will have to take place soon; namely, as regards the dominant, overwhelming interests of the people of Gibraltar who believe that they ought not to be the only part of the European Union which is not democratically represented within that body.

My noble friend should not forget that there is widespread appreciation of the efforts of the previous Labour government which provided Gibraltar with the constitution which it enjoys today. I look forward to hearing my noble friend's response to the noble Lord. I certainly hope that this debate will not become a substitute for the debate that must take place before long.

Lord Monson

My Lords, the noble Lord, Lord Moynihan, has made some serious allegations of incompetence and of possible bad faith on the part of the Dutch presidency. It will be interesting to hear how the Government respond to that. I, too, declare an interest in that like the noble Lord, Lord Hardy, I returned from Gibraltar this afternoon having spent 48 hours as a guest of the Gibraltar Government.

I wish to move slightly away from Schengen while sticking closely to the ideal of freedom of movement. The Gibraltarians have been members of the EEC—as it then was—since 1973. The Spanish are relative newcomers; they have been members only since 1986. Yet despite their seniority in terms of length of membership, the Gibraltarians are treated as second class, or indeed third class, EU citizens by the Spanish. As I have said on other occasions, time and time again the Spanish behave in a totally non-communautaire manner, not only in regard to Gibraltar but, for example, as regards vetoing the admission of Austria, Sweden and Finland to the Community until the Spanish receive extra money from some source or other, or additional fishing rights—I cannot quite remember which. Anyway it was a blatant act of blackmail. For some reason they are never criticised for their behaviour.

The specific aspect of freedom of movement that I wish to raise relates to identity cards. The European Commission has accepted the Gibraltar identity card as a document valid for both travel and residence purposes under the terms of EU law. It has written to all member states seeking confirmation that the respective authorities will accept the Gibraltar identity card. Yet not only does Spain not recognise the card, it is also putting pressure by the back-door on other EU countries to refuse Gibraltarians entry if they carry merely a Gibraltar identity card. Some—commendably for example Finland—have refused such pressure and allow Gibraltarians in. Others, unfortunately, have succumbed. It will be good to hear what the Government intend to do.

9.15 p.m.

Baroness Park of Monmouth

My Lords, I strongly support what the last two speakers said. I recognise that we cannot widen the debate. I welcome the idea that there should be an early debate on Gibraltar. However, perhaps now is the moment to ask what the Government are doing inside the EU to make clear their strong disapproval of the pressures which Spain is bringing to bear on a fellow member. It is a fellow member for whom we are responsible and which has no vote of its own and cannot speak for itself. Whatever the explanation as regards what happened in June last year, it is necessary for Gibraltar to see that we are using our position in the EU actively to protect her interests.

I realise that a great deal of the best negotiation goes on behind the scenes. Nevertheless, it is well known publicly that the Spanish have proposed a joint sovereignty package. That must have greatly alarmed the Gibraltarians. I do not know the Government's position on that. When I last asked, I was told that the matter was under consideration, or that discussion was taking place. I accept that. But from Gibraltar's point of view it becomes increasingly important that we are seen to take a position of concern publicly in the EU for a member of the Community which is being harassed by another member.

Baroness Williams of Crosby

My Lords, the noble Lord, Lord Moynihan, raised some important issues which no doubt the Government will address. I do not wish to pursue them. They relate to what has happened, and are correctly on the record. They are serious allegations which need to be cleared up. However, I wish to address the issues referred to by the noble Lord, Lord Hardy, and referred to in Committee by the noble Baroness, Lady Park.

A critical issue is that Gibraltarians feel that their point of view is not taken fully into account. The problem does not lie solely with the Spaniards. It lies in part with the previous government of the United Kingdom. One could forecast the impact of the Schengen agreement on the borders between Spain and Gibraltar—a country of 30,000 adults, which has therefore a great degree of dependence upon free movement rules within the EU agreement.

One of the great problems—it is a fair point about which Gibraltarians feel sour—is that effectively they were not consulted in the run-up to the IGC. Nor have they been adequately consulted over many recent years regarding European legislation which directly affects them. If Gibraltarians are concerned about European legislation, it has been left for them to raise the issue. It has been left for them to pursue the matter through all the highways and byways of Whitehall. There has been no clear channel by which they can make their feelings known. The point is not addressed to the present Government but to the previous government. Therefore the previous government are not in the strongest position to criticise the present Government about what happened in June. That does not mean that the present Government should not respond to those criticisms.

A serious issue relates to the future position with regard to Gibraltar, a country which has no representation in an EU of which it is part and which is not part of any Euro-constituency, despite the fact that everyone else in the United Kingdom and in other member states has some form of representation through the European Parliament which they can use.

During Committee stage, in response to representations by the noble Baroness, Lady Park, and others, understandably the noble Lord, Lord Whitty, pointed out the extreme difficulties of trying to amend European election law. Perhaps it is a pity that no one thought about Gibraltar at the time that that law was drawn up. That is not the responsibility of the present Government. But it leaves Gibraltar in an anomalous situation: an area—a "statelet", if you like—which is bound by the laws of the European Union yet can in no way influence them through any democratic process.

I therefore have a suggestion for the Government, if they are temporarily blocked—as they are—by the difficulties of amending European election law. If I am correctly informed—and as was pointed out by the noble Lord, Lord Whitty—it would require every single member state of the European Union to ratify an amendment, and that is unlikely to happen for reasons that are well known to the House. So what other steps might be taken to enable the people of Gibraltar to he heard?

There are obvious ways in which the Foreign Office and other government departments could make themselves open to representations by Gibraltar. However, I suggest that the Government should examine closely the possibility of using the existing, extremely good, process of the Select Committees. The noble Lord, Lord Bruce of Donington, has often pointed out how effective they are. That could enable the Prime Minister of Gibraltar and his government to indicate their belief that a particular piece of European legislation might have substantial consequences for the people of Gibraltar. Such a matter could then be brought to the attention of the Select Committee on European Legislation. The committee would then consider whether the matter was in its view of sufficient importance to be referred to one of the sub-committees for further investigation, including the hearing of evidence and the acceptance of papers—which same evidence might include representatives of Gibraltar's Executive. In that way, at least the people of Gibraltar could feel that their representations were taken very seriously.

I share the view of the noble Lord, Lord Bruce of Donington, who continually reminds us of the importance of democracy. It puts us in an extremely vulnerable position to argue that Spain has no rights in Gibraltar, when we ourselves recognise no democratic rights for the people of Gibraltar in this House and the other place, on which they are solely dependent for making representations at a European level.

That may not be the right approach; it is simply one thought among others that has occurred to me. There may be other ways in which we could give the people of Gibraltar a voice in this House and through parliamentary procedures. But that we need to move—and to move recognising that we have effectively ignored the concerns of the people of Gibraltar to give them a feeling that there is a democratic channel—is of the greatest importance.

My party and I believe that, in the long run, it is worth exploring the issue of some form of dual sovereignty. The Northern Ireland treaty has clearly indicated that the bedrock of any form of acceptance that Spain has the right to be heard on certain issues must be the self-determination of the people of Gibraltar. That self-determination means, for as far ahead as one can see, that the people of Gibraltar will opt by any democratic method to remain within the orbit of the United Kingdom. So be it. I believe that self-determination is a profound rock upon which democracy rests. I see no great fear in relation to listening to Spain on such issues as border controls, epidemics and so forth. I do not see that there is any great objection to that, provided—and I underline this point—that the self-determination of the people of Gibraltar is the central base on which we approach this question. It might actually help to ease our relations with Spain.

Having said that, let me return to the suggestion I made. Perhaps at some stage the noble Lord or the noble Baroness the Minister will write to me. I believe that there is a way forward, and that it should be taken. I recognise that it is not the best way forward; however, since the best way forward is blocked—namely, European elections including the people of Gibraltar—it is incumbent upon the Government and those of us who serve in this House and another place to find some legitimate channel by which the views and opinions of the people of Gibraltar might be heard.

Lord Stoddart of Swindon

My Lords, I, too, was invited to visit Gibraltar last weekend. However, knowing that this item of business would arise, I was unable to accept the very kind offer of the Gibraltar Government. However, I am pleased to support the views expressed in the debate so far in relation to Gibraltar's problems and rights and its right to be considered.

The noble Baroness will be pleased to know that I agree with much of what she said. However, before I develop that point I wish to say this. My right honourable friend the Foreign Secretary has enough on his plate at present and I shall not go along the lines of criticising or questioning what he has done. Indeed, I wish to express some sympathy for him. The way in which matters are arrived at within the European Community and within the discussions seems to me, quite frankly, to be chaotic. That was revealed by the BBC2 programme called, I believe, "The Money Changers". It was about EMU and so on. It showed just how chaotic the decision-making process appeared to be. I can quite understand why Ministers cannot always be on the ball about every single item and every single detail.

I believe that in one way or another we must arrange that the decision-making process is open and is slowed down so that Ministers, and not merely their officials, know what is happening, it is Ministers who take the decisions and it is known what decisions are being taken by all the member states, not just a few. That needs to be done.

As regards Gibraltar, it has the sympathy of the whole House. There is no question about it, that has been shown in the debate tonight. That is why I am on my feet to bolster that support and to say to the Gibraltar people that we understand their difficulties. We believe that their interests have not been properly looked after, whether or not in the European Union. It is about time that their loyalty to this country was recognised and rewarded.

One of the ways in which it can be recognised and rewarded has been mentioned by the noble Baroness and other noble Lords: we should ensure that they have some representation in the European Union. It ought not to be beyond the wit of our Government, our Parliament and the European Union to ensure that that happens. I hope that it will be so.

The noble Baroness raised the question of dual sovereignty. A whisper from my noble friend Lord Hardy of Wath leads me to ask a question about it. I understand that, unless Britain retains full sovereignty, the Treaty of Utrecht becomes null and void and sovereignty passes to Spain. That is important, bearing in mind the discussions we had about sovereignty earlier this afternoon. I hope my noble friend will be able to give an answer to that and tell us that we are safe and we retain full sovereignty over Gibraltar. If we do not, it would be a serious matter.

In conclusion, I reiterate my support for the Gibraltar people. They are being treated badly by Spain in particular and we have a duty to protect their interests.

Lord Islwyn

My Lords, I associate myself with the observations made by the noble Baroness, Lady Williams. The point I wish to make is that Gibraltar has always indicated that it wishes to be associated with this country.

I have been a member of the Transport and General Workers' Union for over 40 years. It is interesting that the Transport and General Workers' Union has organised, and organises, the workers on the Rock at the present time. Recently, it produced the Prime Minister for Gibraltar. In the case of Spain, in some senses it is a question of the pot calling the kettle black. Spain has two enclaves—two colonies it could be said—in Morocco. We do not hear much about that from Spain or about any possibility of withdrawal.

I have always felt that Gibraltar should decide its own destiny by democratic means. As I said earlier, it has so far indicated that it wants to be linked to this country. We should certainly give it a voice in the European Union. As the noble Baroness, Lady Williams, said, there should be a democratic channel and it is up to us in this House to speak up for Gibraltar.

9.30 p.m.

Lord McIntosh of Haringey

My Lords, there can be no doubt about the universal concern and sympathy expressed in the House this evening for the people of Gibraltar—a sympathy and concern which the Government share, as I hope to show in responding to the debate.

Let me put the issue in context before I come to the specific questions raised. It must be said from the outset—it was said in the context of a wider debate on freedom of movement at Committee stage—that there is nothing in the provisions of the Amsterdam Treaty which erodes the Community law rights of Gibraltarians, in particular existing rights of free movement in the European Union. Nor is there anything which gives Spain any additional rights over its border with Gibraltar. We will continue to defend the position of Gibraltar in the European Union. Where a measure that the United Kingdom would like to opt into is particularly relevant to Gibraltar, our approach will be to give due weight to the interests of the United Kingdom and to the interests of Gibraltar as to any other European measures. Where the UK opts in, it will negotiate in good faith, taking into account the interests of Gibraltar.

The noble Lord, Lord Moynihan, in what I recognise was a deeply-felt speech, criticised the alleged failure of the Government in their negotiation of the provisions for UK participation in existing Schengen agreements. I hope to show, without making the assertion myself, that my noble friend Lord Hardy was right in describing the speech of the noble Lord as "extravagant". However, the record is rather different from that which he implied.

First, the noble Lord made explicit allegations of prevarication. That is nonsense. The subject has been raked over in the greatest detail in another place, in addition to exhaustive discussion in Committee and at other stages of the Bill both in another place and here. Ministers have answered over 40 parliamentary questions on every aspect of the issue. All of those questions have been fully answered.

The Opposition appear to be trying to weave a great mystery by selecting different words from different places to try to cover up our efforts to explain the events with the greatest clarity possible. It is necessary therefore for me to repeat the statement of the sequence of events which I set out in Committee, and if there are any gaps in it—the noble Lord, Lord Moynihan, asked specific questions—I shall try to deal with those gaps as well as with the fundamental facts.

During the course of the debate at the European Council in Amsterdam, Spain proposed an amendment to the Schengen protocol to bring in unanimity for UK and Irish participation in the existing Schengen acquis. At the insistence of our Foreign Secretary, there was agreement that any such amendment would be submitted in writing by Spain. No such amendment was submitted.

The noble Lord, Lord Moynihan, asked whether an amendment was withdrawn, but there was no amendment on the table to be withdrawn. All we know is that at the end of that session, no amendment had been submitted in writing as had been agreed. When the revised treaty text was circulated after the summit, we subsequently learned that the unanimity requirement had been introduced into the text.

The noble Lord asked me to be more precise about when we knew of that additional unanimity requirement. The answer is that we knew when we received the text on the 19th. The noble Lord has invited me to make all sorts of speculations about what happened between the end of the debate and the time when we received the revised text and the unanimity requirement. We do not know. We cannot know. These matters had been put forward by the Spanish Government and were considered by the Dutch presidency. It does not lie in my mouth to accuse either the Dutch presidency or the Spanish Government of bad faith, and I have not done so. We could not know other people's motivations when we were not involved in the process that took place.

What we could do—and what we did do—was to take the matter up with the presidency and with a number of member states. It emerged that there had been a misunderstanding about what had been agreed in Amsterdam. If that is not clear enough, "misunderstanding" means that some people understood one thing and some people understood another thing. Again, I cannot impute motivations to those who understood something different.

We not only took the matter up with the presidency and with other member states, but we obtained a declaration. That was Declaration 45, which provides protection for the interests of the UK in this area. The noble Lord, Lord Moynihan, asked whether that declaration had legal effect. It is a declaration of the intergovernmental conference. It is politically binding on member states. It invites the Council to seek the opinion of the Commission before it decides on a request by the United Kingdom to participate in any measure in the existing acquis. Moreover, under the declaration member states undertake to use their best efforts to enable the UK to participate.

The noble Lord asked me what parts of the opt-in to the Schengen acquis are involved. Clearly, the Schengen acquis is involved because that is what the declaration is about. Clearly, also, provisions under the new Title IIIa are also involved, but they do not require the declaration because they are not affected by the unanimity provisions.

The second question of the noble Lord, Lord Moynihan, began by being about Article 4, but it was also about the process which I have now described. I forget the exact words he used, but he described it with an embarrassing multitude of different descriptions. If he will look back at the record, I believe that he will find that we have never done anything other than set out the situation as far as we know it and as far as we understand it. There are gaps in our knowledge. Those are gaps which took place in a period when we were not involved. The noble Lord asked me what is meant by a difference of historic interpretation; what I mean is that what came out in the text of the debate was different from what we understood would go into the text of the debate. It is as simple as that.

The noble Lord asked me again about the Dutch presidency letter of 16th July. I can only repeat what is commonplace and, indeed, normal in diplomacy. Letters of this kind between sovereign states are not part of political debate and we do not release such letters for political debate. I did not, as the noble Lord, Lord Moynihan, appears to think I did, accuse the Dutch presidency of cheating. I must repeat that I do not impute motives to other member states. I simply describe the discrepancies which took place.

In all of this I do not doubt the sincerity and seriousness of the noble Lord, Lord Moynihan, on these issues. But his concern is with a process of what happened in a very by short period of time and for which the remedy has been achieved by the addition of Declaration 45 at the end of the process. I suggest that we should now turn from the history of those few days to the wider issues which were properly raised by other noble Lords in debate.

Both in Committee and in debate today noble Lords have addressed the nature of the relationship between the UK and Gibraltar more generally. We work together on all issues which affect Gibraltar. We attach particular importance to ensuring that the Government of Gibraltar are consulted on and kept fully informed about all relevant developments. Gibraltar is consulted extensively, if I may say this to the noble Baroness, Lady Williams, on European Community legislation because we have made great efforts to make that so. We have very close links with both policy makers and legal draftsmen in Gibraltar responsible for European Community legislation. Mr Caruana was in Brussels only a few days ago for talks with the Commission and the UK representation. He also led discussions on EU matters in London immediately afterwards. A Foreign and Commonwealth Office official dealing with EU matters was in Gibraltar in the past fortnight. We expect shortly to have another visit by Gibraltar officials dealing with EC matters. That is typical of what goes on under this Government. It is a process of careful consultation on EU issues which affect Gibraltar.

Baroness Williams of Crosby

My Lords, I thank the noble Lord for giving way. Is there any consonant parliamentary structure which would enable the actions of the Executive to be considered in Gibraltar as they are in this country?

Lord McIntosh of Haringey

Yes, my Lords, I was about to refer to that point. I have more to say about our relationship with Gibraltar, but I may as well say now that we find the noble Baroness's suggestions very interesting. I do not think I can reply off-the-cuff. But if she will allow me, I shall write to her on the subject.

I wish to pay tribute to the Gibraltar Government for their newly opened office in Brussels and the links which have been established between that office and our own permanent representation in Brussels.

Gibraltar is unique not only because of its historical links with the United Kingdom—it was correct to refer back to the Treaty of Utrecht—but also because it is the only UK overseas territory within the European Union, as part of UK membership by virtue of Article 227(4) of the Treaty of Rome. Gibraltarians are rightly proud of the European identity. They are committed to being part of the European Union in the future, and we welcome that. Last year the Government of Gibraltar—representing 30,000 people—spent £1 million on bringing up to date implementation of European Community legislation in Gibraltar. They put into place effective regulatory mechanisms, which met UK and EU standards, to join in the international fight against money laundering.

Being part of the EU brings rights as well as responsibilities. As I have already said, we will continue to defend the position of Gibraltar in the EU as well as the Community law rights of Gibraltarians. A fundamental right which Gibraltarians enjoy within the EU is that of freedom of movement. The Spanish Foreign Minister has given an assurance that Spain has never questioned the right of Gibraltarians to freedom of movement in the European Union; nor will Spain do so in the future. We shall hold Spain to that assurance.

The noble Baroness, Lady Park, asked me about Spanish proposals for joint sovereignty, as indeed did the noble Baroness, Lady Williams, who made a similar point. We have agreed to study those proposals carefully. But the Foreign Secretary made clear to the Spanish Foreign Minister at their meeting on 10th December that there can be no compromise on sovereignty against the wishes of the people of Gibraltar. So it follows that any Spanish proposal would have to win the approval of the Gilbraltarians in order to prosper.

The noble Lord, Lord Monson, asked me about Spain's refusal to accept Gibraltar-issued identity cards. The Government notified the Commission in October 1995 about Spain's refusal to accept them as valid travel documents. In July 1996 the Commission accepted the cards as valid. The matter of whether or not formally to initiate infraction proceedings against Spain remains under consideration by the Commission. Commission infraction proceedings are confidential. However, contrary to press reports that appeared last August, Spain has not succeeded in closing the case and the Government continue to stand up for Gibraltar's rights in this matter. We wrote to the Commission in March and underlined that we looked to it to ensure compliance with EC law, and we remain in touch with it on that issue.

The final issue to which I have to refer was raised in particular by my noble friend Lord Hardy of Wath—voting in European parliamentary elections. Concern has been expressed both here and in another place. It has been suggested that the Government are ignoring the wishes of the people of Gibraltar. We understand the strong feelings and that this is an important and sensitive issue. The Foreign Secretary has been in touch with the Chief Minister on this issue and has requested a thorough legal review of the situation. That legal advice is consistent and clear: to extend the European parliamentary franchise to Gibraltar by changing UK law alone, as has been suggested by some Members in another place, would put the UK in breach of European Community law; namely, the European Community Act 1976 on direct elections which has treaty status.

I can spell all that out in detail, but I believe that your Lordships will really want to hear only the conclusion. The only legally secure way to extend the EP franchise to Gibraltar is to amend the 1976 Act. That would involve the agreement of all member states. I do not want to speculate on the likely views of other member states, but at the same time I would not underestimate the difficulties, which my noble friend Lord Whitty spelt out in Committee, of a process which requires treaty amendment. The prospect of securing that is uncertain, to say the least. It is not clear to us that risking the possibility of a veto on Gibraltar's inclusion in the European Parliament franchise would benefit the people of Gibraltar or further the wider and long-term interests that the UK is pursuing on Gibraltar's behalf.

As I said at the beginning, I recognise the genuine and deeply felt concerns which noble Lords have expressed and I share them. I believe that we are doing the right thing, and have been doing so, to protect the people of Gibraltar. I invite the House to reject the amendment.

Lord Stoddart of Swindon

My Lords, before my noble friend sits down, I did ask him a question about the Treaty of Utrecht. I understand that he may not be able to answer it off the cuff, but I shall be most obliged if he will write to me.

Lord McIntosh of Haringey

My Lords, my understanding is that the Treaty of Utrecht is as my noble friend described it. It is dependent on UK sovereignty. That is the reason why there has been no move towards independence for Gibraltar.

Lord Moynihan

My Lords, I tabled a very tight amendment concerning the implications for the people of Gibraltar of the voting arrangements for an opt-in. In the light of earlier interventions this evening, not least about my use of the important example in the context of common foreign and security policy as regards Sierra Leone, I was interested to note the exchange on the Labour Benches on the much wider issue of voting in European elections. That is not covered in my amendment and it will be the subject of much more detailed debate at a later stage in another Bill coming before this House.

That said, I am grateful to the Minister for answering some of the questions that I have posed. He referred to "embarrassing multitude". For the record, an embarrassing multitude of questions remained unanswered. This evening many questions remain unanswered. The purpose of this specific amendment was not to cover the wider issues affecting the people of Gibraltar. The fact that I have not tabled an amendment to do that does not mean that I dissociate myself from the extremely important points made by the noble Lord, Lord Hardy, the noble Baroness, Lady Williams, and others, about the importance of having a wider debate in future—indeed, the sooner the better—the vital necessity of ensuring that the views of Gibraltarians are taken into account and the degree of cross-support for the many concerns expressed very clearly in correspondence to your Lordships by the people of Gibraltar.

I should like to pick up one or two points for the record. The noble Lord, Lord Monson, said that I had made some important allegations about the Dutch presidency. The noble Lord, Lord McIntosh, believed that I had laid those allegations at his door. I did neither. The important points that I sought to make related to the Foreign Secretary's strong criticisms of the Dutch presidency and his accusations that the Dutch government had been inefficient in its note-keeping, not to mention the accusation that the same state had effectively not told the truth about whether or not a challenge to the amendment had been made and also that it had colluded in a secret deal. Those were three very important allegations, all of which are clearly on the record, not least in the evidence of the Foreign Secretary to the Foreign Affairs Select Committee on 4th November last year and in other places.

I sought to highlight those points for one extremely important reason. In the context of this Bill the House has been allowed to look closely at the serious process of how decisions are made within the European context, particularly in the negotiations over this treaty. It is because of the ramifications for the transparency of the European decision-making process and the need to focus upon that that I have tabled this new clause.

I am grateful to the noble Lord, Lord McIntosh, for recognising that the comments that I made were deeply felt. They were as deeply felt as the comments that I made earlier this evening on the common foreign and security policy. I believe that his choice of words was more accurate in reflecting the tone of my delivery than that of his noble friend the Minister earlier this evening. But in the light of his answers and genuine desire to answer a number of questions—he has answered a considerable number of additional questions, but not all, the answers to which I should like to study in further detail—I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Inglewood

moved Amendment No. 5 After Clause 1, insert the following new clause— BROADCASTING (". Within six months of the passing of this Act a Minister of the Crown shall lay before both Houses of Parliament a report on the meaning of "public service broadcasting" set out in the Protocol on the System of Public Service Broadcasting in the Member States annexed to the Treaty of Amsterdam."). The noble Lord said: My Lords, as a preface to moving this amendment, I thank the noble Lord, Lord McIntosh of Haringey, for his letter to me of 5th May, which answered one of the questions that I raised when this matter was considered at Committee stage. He pointed out that the primary principles guiding the legality of the public funding of public service broadcasters remained the existing treaty state aid rules.

The protocol on the system of public service broadcasting in member states which is annexed to the treaty is drafted on the basis that broadcasting will continue in the future in very much the same form as today. However, to put it no higher—I do not want to overstate my case—there is a real possibility that this will not necessarily be so in the future. The traditional distinction in this area is between broadcasting—which is the transmission of material over the radio spectrum on a point-to-multi-point basis—and telecommunications—which is the transmission of a similar type on a point-to-point basis. This is a simple and clear distinction.

However, in the era of digitisation, convergence, digital compression, the interleaving of programme material and spectrum abundance, as opposed to spectrum scarcity, the concept of a broadcast channel is rapidly becoming redundant. Instead, with the development of video on demand and near-video on demand, the viewer or listener is able to view or listen at the time of his choice rather than that of the programmers. When at the same time we are seeing a number of cable companies, which were originally conceived as broadcasters, increasingly carrying on a business which is telecoms and, in particular, telephony-based, which incidentally carries some television material, which in turn itself may be linked to interactive services, the distinction between telecommunications and broadcasting starts to look very blurred.

What this protocol spells out is that state aids to public service broadcasters for the purpose of public service broadcasting will not be considered unfair state aids. This, in itself, is an uncontentious principle. However, what we are concerned about is the reality in the commercial world of contemporary Europe of the distinction upon which it is based. Can it truly be said that public service broadcasting will stand apart, separate and distinct from commercial broadcasting, commercial telecommunications or commerce conducted interactively via a return path?

There are two particular aspects of that which I should like to draw to the attention of the House. First, public service broadcasting, not least if it is also funded by advertising—that is sometimes the case on the Continent and, as your Lordships will know, with Channel 3, Channel 4 and Channel 5 in this country—may be linked to interactive services and can be a commercial rival to commercial broadcasters for viewers and for advertising.

Given that the acceptability of public money or subsidy of some kind or another going to a particular broadcaster is that the service it provides is defined as being public service, can the Minister confirm that the particular remit that a member state may give to its own public service broadcaster must fall within a wide European Community definition? I should like to invite the Minister to confirm that is the case, not least because it would appear to be in accord with the teleological approach to the interpretation of Community law. Can he also give us any indication of the definitions of public service broadcasting which are employed in each of the member states and confirm that the Government are happy that they are acceptable within their view of what constitutes public service broadcasting?

The risk here is that if we are not careful it is possible that this protocol can very easily become a device for unscrupulous member states to protect their own broadcasters through the mechanism of attaching the words "public service broadcasting" to a hidden or open subsidy that they may be inclined to give. Can the Minister therefore confirm that the European Commission intends to look behind whatever words may be employed in these circumstances to examine the underlying reality of what is involved and that it is prepared to act, where appropriate, if abuse can be established on the facts?

The second point I should like to draw to the attention of the House is that because public service broadcasters, commercial broadcasters and telecommunications frequently employ the same networks, would he therefore not agree that the presence of a particular public service broadcaster on any particular network will be a significant commercial advantage to the owner of that network?

That, in turn, could be a very easily disguised means of subsidising one network at the expense of another and/or favouring the users of one particular network at the expense of the users of another network. Again, can the Minister confirm that the Commission recognises that possibility and thereby the means that could exist of conferring unfair advantage in the single market; that it will be on its guard for that kind of abuse and that it will act where on the facts of any particular case, it will be appropriate to do so? I beg to move.

10 p.m.

Lord McIntosh of Haringey

My Lords, I am grateful to the noble Lord for setting out the reason for the amendment. Perhaps the House will forgive me if I rapidly recapitulate on how we have reached this position and on the debate on broadcasting in Committee.

The debate in Committee was based on the attempt principally by the Competition Directorate to restrict subsidy by member states of public service broadcasting on the ground that it would be in commercial competition with unsubsidised broadcasting. The thrust of the debate from the Opposition Front Bench was to see what was meant by Protocol 4 and the concept of public service broadcasting.

In response to the debate, I attempted perhaps in a foolhardy fashion to set out what we meant by "public service broadcasting". It is relevant because it affects my answers to the noble Lord's question about whether the definition is too wide and whether risks were involved. I suggested that public service broadcasting could be defined not in a single definition but by a number of shared characteristics. First, focus on the audience—in other words, for the benefit of viewers and listeners. Secondly, quality programming. Thirdly, diversity and choice, including programmes for entertainment, information, education and programmes for minority audiences. Fourthly, accessibility; that is, the geographical coverage of services and broadcast programmes which many people find enjoyable and interesting. Fifthly, editorial independence; that is, decisions about programmes being taken by broadcasters or broadcasting authorities, not by government or other interest groups. Finally, the concept of national identity—public service broadcasting reflecting the national interests and cultural traditions of the audiences.

I did not attempt a definition in terms of the way in which public service broadcasting operates. As I explained, public service broadcasting in this country operates under a number of different regimes; the BBC with its charter, Channel 4 and S4C in a different way and the regulatory role of the ITC having a different effect.

I understand the noble Lord to be asking me in what way the protocol will work. It might be useful if I put on the record the fact that I wrote to him—unfortunately, the letter reached him only today—setting out the Government's view of that. I am happy to repeat it on the record tonight. The primary principles guiding the legality of public funding of public service broadcasters remain the existing treaty state aid rules, in particular set out in Article 92.3(d).

Any company claiming that a public service broadcaster was receiving funding that contravened state aid rules would take its complaint to the Commission as guarantors of those rules. The Commission would then investigate whether the complaint did indeed amount to a breach of state aid rules, as it is doing now with the complaint by the Portuguese commercial company, SIC, against the public service broadcaster, RTP.

Once the treaty is in force, the Commission will take the protocol into account in its investigations. The aim of the protocol is to give a strong indication to all interested parties—the Commission, member states, public and private broadcasters—that a public service remit can carry onerous and possibly unprofitable obligations which are in the public interest and therefore require public moneys in one form or another.

That final sentence enables me to respond to the specific questions of the noble Lord, Lord Inglewood. I do not believe that the definition is too wide. In Committee, the general tone was one of welcome for the fact that our existing way of subsidising the BBC is not under challenge from the European Commission or under competition rules. I thought it was agreed generally that the protocol was helpful in relation to protecting those benefits of public service broadcasting which I have set out and which clearly involve obligations which can justify the use of state money.

I do not know how other member states will define "public service broadcasting" but I know that the protocol will make it easier for the Commission to make a proper balance between competition rules and the protection of public sector broadcasting.

DG.IV of the Commission is extremely experienced in state-aid cases. It will no doubt apply the protocol carefully so that where there could be unfair competition, the new provision will be applied.

The Government see this provision and the protocol as a protection for quality broadcasting and for the whole ethos of public sector broadcasting in this country and in Europe as a whole. We are not afraid of the implications of the protocol for this country and we believe that they will stand up to scrutiny both in Brussels and throughout the member states. I invite the House to reject the amendment.

Lord Inglewood

My Lords, I am most grateful to the Minister for his remarks. One of the difficulties that we have in considering public service broadcasting is that, rather like the elephant, it is very difficult to define it in words but we all know it when we see it.

I wish to make two points arising from the Minister's response. First, many of the characteristics which he ascribes to public sector broadcasting are, if not the characteristics, then frequently the aspirations, of those in the commercial broadcasting world.

Secondly, I return to the comments I made at the beginning of my remarks. The form which public service broadcasting is now taking may well change, and change quite rapidly and significantly—I do not say it will, but it might—in the very near future with the changes arising from the digital television systems which we shall see.

Against that background, we need to be on our guard against the possibilities of abuse—and, of course, alert to the possibilities of good features which may arise from those changes. I am merely anxious to be sure that the European Commission shares the Government's present view as to what that particular protocol means.

The crucial factor in all this will not be what the Government of the United Kingdom or any other member state believes is the appropriate interpretation, but what the Commission believes is the appropriate interpretation. In theory, the matter may then go to the European Court. However, clearly we cannot have a determination in advance of an actual case.

However, I wish to reflect on the helpful remarks of the Minister and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Rawlings

moved Amendment No. 6: After Clause 1, insert the following new clause— CONDITIONS FOR ENLARGEMENT OF THE UNION (". This Act shall not enter into force until a Minister of the Crown has laid before both Houses of Parliament reports on the measures agreed between the Member States of the Union to—

1. (a) reform the Common Agricultural Policy;
2. (b) reform the structural and regional funds; and
3. (c) streamline the institutions of the European Union, including the re-weighting of votes in the Council,

and such reports have been approved by resolution of each House."). The noble Baroness said: My Lords, I strongly believe—it is a belief which I have held for some time—that enlargement and the institutional changes of the European Union must go hand in hand if we want the Union to succeed.

We have just witnessed the official birth of the euro. That is an historic step whether or not we become part of it. Without counting the euro forerunners of the snake and the EMS, the birth of the euro took seven long years. Yet nine years after the fall of the Berlin Wall, the European Union is still not ready for enlargement which the Amsterdam Treaty failed to address.

Enlargement is the present historic challenge. It is a real dream, as my noble friend Lord Howell of Guildford expressed it so eloquently earlier this evening. It is desirable not only for strategic, political and economic reasons but also for moral reasons. Based on the principle of democracy, fraternity and the need to heal the deep scars left by the Communist era, it will unite a continent that historically and culturally should be one. It will add 28 per cent. to the Union's population and 34 per cent. to its area. As a consequence, it will fundamentally change the nature and functioning of the Union.

Major institutional changes and enlargement will have significant geopolitical consequences. I am not a great one for sketching scenarios for some 10 years hence. As was said in your Lordships' House only recently, it is dangerous to make predictions, especially about the future. However, it is obvious that relations between the European Union and its neighbours, both to the east and to the west, will be affected. These historical developments should, in no way, detract from our continuing relationship with the United States and the Atlantic alliance. It is for that reason that I would support the proposals of Sir Leon Brittan for a new transatlantic market place. These are not just proposals for a far-reaching trade and service liberalisation; they are intended to give a new political momentum to US-EU relations.

Sir Leon's proposals represent a further step in adapting that relationship to the post-Cold War period, building on the 1995 new transatlantic agenda. Our close ties with Europe should not preclude our relationship with our natural ally, the largest democracy in the western world; namely, the United States of America. I have always felt this, so much so that the purpose of my last report in the European Parliament was to further EU and US cultural relations.

Both Euro realists and those who would like to see the European Union's demise, agree that enlargement is desirable, and they say so; as, indeed, we heard from my noble friend Lord Beloff. I greatly respect him, but cannot agree with him on this matter. Enlargement is the acceptable—dare I say it? —politically correct stance on the European Union, yet rhetoric alone will not make enlargement happen. If it is not followed by consistent action, it will fail. At worst, enlargement could stagnate and degenerate into hollow talk. For example, the President of the European Parliament, José Maria Gil-Robles, said to the Romanian Parliament: Enlargement must be carried out smoothly, without creating new divisions or blocs in our continent". It seems unreasonable in these circumstances that the Commission is still insisting that Hungary should impose visa requirements on Romania. What would any noble Lord say if he were the man on the proverbial down-town Bucharest bus?

Much as we may say we want enlargement, it cannot happen without reforming the European Union and, in particular, its institutions. That is the main reason behind the amendment that I am introducing this evening. It is not a wrecking amendment; it is intended to raise the pressure to bring about reform. By and large, Amsterdam failed to prepare the institutions for enlargement. The Government acknowledge that fact. However, I differ with them on two grounds: first, the institutional issue is more important and more difficult to resolve than I believe the Government are prepared to admit. Unless the institutions are right, the policies that the Minister considers of the uppermost importance never will be right. Moreover, would it not be fairer to settle the institutions first so that the applicant countries knew what the club rules were before they joined?

From my experience as an MEP, I learned what a cumbersome, rough beast the institution of the European Union and its procedures can be. I have also learned that trying to solve institutional and procedural issues can be wildly frustrating, time-consuming and complex. I remind the Minister of the interminable, on-going discussions on the site of the European Parliament, which I believe we shall discuss later.

I am not reassured by Article 1 of Protocol 11, even though it puts into place a specific mechanism. At the date of entry into force of the first enlargement, each member country will have only one commissioner, provided that the reweighting of the votes has been satisfactorily solved. As the accession of the first wave is likely to take much longer than the Commission predicts, the article in effect just delays reform. Reform is clearly necessary now and by the completion of the first wave accessions will be well overdue.

Secondly, I beg to differ on the degree of progress achieved at Amsterdam. I accept that capping the European Parliament's size and transferring most policy areas, subject to co-operation procedure, to the co-decision one is a significant change. In Committee the Minister gave the impression that the only outstanding issues of those originally on the table were the size of the Commission and the reweighting of the votes in the Council of Ministers. That simply is not the case.

There is also the reform of the Council presidency which appears to have dropped off the agenda. Even though I know that the discussion on the institutional matters dealt with by the Amsterdam Treaty cannot be reopened, there are, however, other institutional issues which need to be addressed quite urgently. I shall mention just two problem areas. Ten days ago the appointment of the president of the European Central Bank degenerated into a disgraceful squabble. This is the most recent of the melodramatic rows over top appointments to a European Union institution. It is imperative that the European Union looks at how the top posts are filled. This is presently done by unanimous decision by the heads of government. Surely some solution could be found and surely there is a more effective way to do this while still representing the rights of the member states.

There are now 15 members and 11 official languages. In a European Union of 26 there are likely to be 22 official languages. Can you imagine the nightmare: stacks of paper, armies of translators, interpreters and legal advisers? Can you imagine the dreary delays and the monster misunderstandings that could occur? It would be the ultimate babel. The number of official languages has to be drastically reduced. I anticipate the Minister's answer; namely, that these matters will be taken care of by Article 2 of Protocol 11. The article requires that the comprehensive review of the institutions is carried out at least a year before the Union exceeds 20. However, I have the impression that this is just another ruse further to postpone the necessary reforms because it is clear that enlargement must take longer than is officially claimed.

In Committee I asked the Minister a series of specific questions which I am afraid he did not answer. I do not, of course, expect him to disclose any details which would undermine his negotiating hand. The extent of his silence, however, perturbed me. Could it be that the Government are not particularly focused on the institutional issues? Will the Government give their full backing to the committee proposed by the president of the European Parliament, Gil-Robles, to make proposals for the reform of the European Union's decision-making system? Will the Government make an announcement about the next IGC to resolve the institutional issues in Cardiff?

The purpose of the latter part of Amendment No. 6 is to put pressure on the European Union not to dodge the issue any longer. It makes the entry into effect of the Amsterdam Treaty conditional on the reduction of the Commission's size, which in turn is conditional on the reweighting of the votes. The Minister stressed the importance of getting our policies right. I agree entirely with that. We cannot admit more members without reforming the European Union's main policies as well as its institutions. Otherwise, as the Financial Times concisely put it, Enlargement would bust the Union's budget". That brings me to the first part of Amendment No. 6. It would make entry into force of the Act conditional upon reforms of the CAP and of the structural fund. Last month the proposals were outlined in Agenda 2000 embodied in a Commission package. The European Union has been slow in developing these proposals and it is doubtful whether they amount to a coherent strategy.

Some 75 billion ecu are expected to be transferred to the applicants between the year 2000 and 2006. These are not spread evenly. The second wave of countries, by and large the poorer countries, is expected to receive from the EU less money than the five front runners—400 ecu and 900 ecu per head each year respectively. The Minister disputed those figures. They have been taken by the Royal Institute for International Affairs from the agenda and confirmed by the Commission. Why is there that discrepancy between the first and second wave of applicants? I am not persuaded by the argument that the applicant countries cannot absorb more money.

Our response, however, appears to be inadequate, in particular towards the poorer countries. I have just been in Bulgaria and have seen the amazing recent improvements in a relatively small town, Blagoevgrad, outside Sofia, the site of the American University of Bulgaria, which is housed in the old Communist party headquarters. It is quite remarkable.

I fear that enlargement will require more money than the Commission estimates. However, it is imperative that the European Union stays within the own resource ceiling of 1–27 per cent. of the European Union GDP. That leaves us to square the circle. The Commission believes that a sustained rate of growth between the European Union and the applicant countries will solve the problem. I feel it may be over optimistic. If it is over optimistic, as I believe, it will only increase the pressure to find additional funds by reforming the existing policies.

If we wish to provide the applicants with the necessary funds, we shall have to face very tough decisions. This is particularly the case for the CAP. Far from reducing the CAP budgetary expenditure, the Commission proposals increase it. That is totally unacceptable. As regards the appropriateness of the proposals towards enlargement, I wish to refer to the damning opinion of the Agriculture Committee of another place on the outline proposals of Agenda 2000. The committee believes that the proposals are fraught with problems and therefore unacceptable. The proposals for the structural and cohesion fund also appear unsatisfactory. The criteria for distributing the overall allocations appear to be fundamentally flawed. They lead to an unfair distribution across the existing Union members and between those and the new applicants.

The decision to limit funding to 4 per cent of GDP has a perverse effect. En short, the richer you are the more you get. Yet the main purpose of the fund is to reduce the disparities with the Union. Furthermore, in all the applicant countries, the GDP per head is below that of Greece and Portugal. It is estimated that in 1999 Greece and Portugal, the poorest Union countries, will receive from the structural funds 400 ecu per head. It is also estimated that between 2002 and 2006, according to the Commission's proposals, the first wave applicants will receive 120 ecu per head, and a second wave group only 23 ecu per head. Moreover, the decision to maintain the cohesion fund in the present form, albeit with minor changes, flies in the face of fairness. It helps the relatively less poor countries and leaves the poorer ones out in the cold.

Perhaps we are not talking about the same Community or the same Union. We are not. It is increasingly clear that several countries are queuing outside the door. Some people ask, "What are the applicants joining?" Some people say, "A Community or a caste system?" Enlargement rightly developed almost as a natural response to the end of the Cold War. I hope that under the UK presidency the Government will make some real progress towards what has been described many times today as the central point of the Amsterdam Treaty; namely, enlargement. I beg to move.

Lord Grenfell

My Lords, the noble Baroness has spoken eloquently of the vast complexities of reforming the CAP, the structural funds and the institutional arrangements in the European Union. In doing so, she has revealed the true intent of this clause. That is simply that it would be far better to use this argument as an argument for delaying the ratification of the Amsterdam Treaty on the grounds that clearly these reforms will not be completed very fast. So the cat is rather out of the bag on this one. To put it charitably, the framers of this clause may have been seduced by the wishful timetable that one reads about, which basically states that the CAP reforms should be in place before the world trade negotiations start next year; that the reform of the structural funds must inevitably be completed before they in effect run out in 1999; and that the institutional reforms must be in place before the enlargement actually happens.

I certainly agree that the institutional reforms, CAP reforms and reforms of the structural funds need to be in place before the enlargement can take place. That is perfectly clear. However, let us not underestimate the amount of time that it will take, first, to get the reforms through, and, secondly, to complete the enlargement process.

Agenda 2000 sensibly stated that it did not want to use the enlargement as the vehicle for driving through these reforms. It was smart enough to realise that these are complex reforms and that they need to be made in any case, whether or not enlargement takes place. The overhauling is absolutely necessary. Whether the enlargement is to 20, 25 or whatever the number may be, the reforms must take place.

It would be a tremendous pity if we were now to say in accepting this amendment that the very sensible measures proposed in the Amsterdam Treaty should be held hostage to a dual process of agreed reform to the CAP, the structural funds and institutional reforms, and the extremely complex negotiations on enlargement. They will simply not come about that quickly. If for a moment we could divorce in our minds the reforms that we want to see achieved from the process of the actual enlargement of the European Union, and concentrate on the reforms, get them through and then move on to the enlargement process, that would be the sensible approach. The reforms have to come about before the enlargement.

As I said in Committee, we should remember that the reforms that we want to see put through are necessary to the enlargement. But they cannot be hurried. We have waited a long time for them; however, their complexity is such that they must be handled properly. Many of the applicant countries that want to enter the European Union—both those that are on the accession list and those that are not—are in my view gravely underestimating the amount of time that it will take for their negotiations with the European Union to be completed—we have only to read in today's Financial Times the reports of the tremendous difficulties that Poland is having with the European Union over the use of aid funds made available to that country so far. If that is any indication of what the problems are to be in the negotiations, the process will be much more drawn out than those countries unfortunately believe.

However, it gives us time to get proper reforms through. What one must not do is to hold up the ratification of the Amsterdam Treaty until the reforms have been agreed. There is no reason to do so. As we have said so many times on this side of the House, the Amsterdam Treaty is not highly controversial. There are sensible measures in it to try to get the European Union to work more efficiently. Many of the measures put forward are those which meet many of the interests and requirements of this country. So let us not try to hold up the Amsterdam Treaty and simply wait until the long drawn out and complex series of negotiations on reform have been completed.

As the noble Baroness rightly said, there are very tough decisions, fraught with problems. That is absolutely right. So let us take the time to get them right and get the solutions through and not hold up the Amsterdam Treaty.

10.30 p.m.

Lord Howell of Guildford

My Lords, since the Committee stage, events have marched on on this front as well as the others we have discussed today. I am grateful to my noble friend Lady Rawlings for the amendment which gives us the opportunity to review the situation again. It is changing fast.

Enough has been said by the noble Lord. Lord Grenfell, by my noble friend Lady Rawlings and by others in earlier speeches this afternoon to remind us what an appallingly drawn out process this has been, is being and will be. It is amazing to reflect that it will probably be 15 or 16 years after the fall of the Berlin Wall before the new democracies, who thought they were rejoining Europe when they got rid of the Soviets, come to be likely to get into the European Union. That is assuming that no new obstacles are raised against them, which is quite a tricky assumption. That is for the fast track, whereas the prospects of the other five of the 11— the five plus one plus five—those who are considered not yet properly prepared, are disappearing into the blue yonder of the never-never land. I can see no hope for them at all at the moment and it seems to be getting less all the time.

We have not discussed this evening—and I do not want to give any time to it because the hour is late—the question of the handling of Turkey. It was mentioned earlier, I know it is difficult: many people in Europe do not want Turkey in the European Union. They talk of involving millions of Moslem people in the Union. So their feelings were expressed in, I thought, an extremely clumsy exclusion of Turkey from the whole process. I know Turkey was supposed to come to Lancaster House and did not turn up, but the country was more or less told that it was not on the list. That has caused great ill feeling in Turkey, there are very dangerous undercurrents and we shall all pay a frightful price for it in due course.

As we know, the official position on enlargement is set out in Agenda 2000, to which the noble Lord, Lord Grenfell, referred. I think on the surface it sounds reasonable. The five plus Cyprus will be negotiated with: negotiations are already supposed to have started. The other five will be left on the slower track. But if one wants to understand the real approach, the real philosophy driving enlargement, it is better to look at the pre-accession strategy rather than the Agenda 2000 document, which contains some high flown aims for reforms. None of them has got under way. But the pre-accession strategy was clear in numerous councils and European summits. The new applicants were told two things precisely. One was: "Marketise your economies, turn them into free market economies. Get rid of the remaining barriers and create the conditions in which you can trade fairly with the existing European Union". The second was to accept the acquis, lock, stock and barrel. The difficulty which many of the east and central European governments have been pointing out ever since, rather mournfully, is that those two diktats, or requirements—perhaps "diktats" is too crude a word—are contradictory.

It so happens that the eastern European economies are rapidly emerging as the most dynamic, free-market economies on the European continent. They are moving ahead of many parts of western Europe. They have liberalised at a fantastic rate. Perhaps it is because they started under Soviet authoritarianism. But they have now leap-frogged to the point where a country like Estonia has no tariffs at all—none—with anybody in the external world.

They are highly liberalised countries. Poland is racing ahead; Hungary has done brilliantly; the Czechs have had a hiccup over some of their privatisation difficulties; but those are already market economies. Yet now they are being told to adopt the acquis and the acquis is not by any means totally informed by market economics. It has got all sorts of requirements for new regulations and new standards said to be part of the necessary arrangements for trading with the existing European Union but which in effect raise barriers, raise costs and remove the very advantages which those countries have exploited so well so far—being highly skilled countries, with low labour costs, and having considerable dynamism and the ability to attract enormous outside investment, which they are rapidly doing, both portfolio and direct investment.

One can therefore see that from the western European point of view it is essential to make sure that the acquis is accepted, though the price that will otherwise be paid by the interests and lobbies of western Europe will be extremely high and that is a price that they do not want to pay. I find all that understandable. As the amendment says, it is a question of structural and regional funds. But if one is in the existing Union enjoying those benefits, one does not want to see them go east. If one is in the existing Union, one does not want to see direct foreign investment—private investment which is poured into the Iberian Peninsula and into some of the Mediterranean countries—diverted, as it is being diverted, into the gigantic new motor manufacturing electronic works in Poland, Prague, the Czech Republic and Hungary.

One can see what the real forces in this game are. Many people in western Europe are anxious that enlargement will take away the enormous benefits that have been enjoyed. And that is not all. Western Europe is reeling under the impact of Asian competition, which is about to get much worse, of course, as much lower cost, devalued currency imports pour into Europe. As the Berliners rather sadly say, "We are threatened with Asia only 40 kilometres away, behind our backs". At the Polish border we are going to be dealing with Asian levels of competition; labour costs one-tenth of those in western Germany, or indeed in Germany as a whole, because of the unification procedure, and very high quality goods as well, all of which are a direct threat to western Europe.

One must therefore be realistic in recognising that the motivations for pushing for enlargement are extremely limited and not at all at the root of popular opinion in western Europe. On top of that, we have the problem of the common agricultural policy. Eastern and central Europe are dominated by agriculture, much of it extremely competitive. Hungary alone could probably feed the whole of western Europe; certainly Poland could. That creates the ultimate impossible dilemma, as was outlined brilliantly in a House of Lords European Select Committee report two years ago. The dilemma is perfectly simple: if the present levels of subsidy are to be maintained and applied to eastern Europe, then the entire budget will blow up. We are talking about trebling or quadrupling the budget, or more.

If the subsidy levels for the new entrants are reduced, then we are creating a two-tier system, with the poorer farmers of eastern and central Europe having to compete with the richer farmers of western Europe who will be receiving larger subsidies. It is hard to think of a more divisive formula for undermining the sense of European unity, which many of us thought we were supporting.

Finally, there is the question put so eloquently by my noble friend Lady Rawlings that if one is sitting in eastern Europe wondering what they are doing in the treaty reforms to accommodate and prepare, and we look at the Amsterdam Treaty—I am not arguing with the noble Lord, Lord Grenfell, about delaying the treaty—we find it is, in the words of my noble friend Lord Moynihan earlier this afternoon, blind. It has nothing to say at all in the way of institutional preparation for enlargement. That is not very encouraging if we look at it from Warsaw or Prague.

No changes in procedure therefore are contemplated, and there are no changes in the law-making procedures, which my noble friend Lord Renton, in a brilliantly perceptive article in the Statute Law Review two years ago, said were absolutely essential before we could begin on the serious and bona fide process of enlargement.

One is therefore left feeling a little downcast about the whole enlargement story, and I fear grave disillusion ahead on this entire matter. These are small nations. They say yes to being in Europe of course; that is perfectly understandable. They want to be reassured by being part of the European family. But they are not so keen on losing their national identity, which they have only just got back after a hideous 40-year struggle. They are clearly not going to qualify for EMU because their economies are not convergent. There is, therefore, a real set of difficulties ahead, on top of the fact that there does not seem, under the surface of rhetoric, to be very much enthusiasm in western Europe for enlargement at all.

We have much in common in this country with these small countries, and they look to us with great respect. We helped bring some of them into being. We brought Estonian independence into being through the Royal Navy in the 1920s; Hungary sought British leadership between the wars; we went to war for Poland in 1939. We were seen as the champion of these countries and, in my view, we should resume that championship, and it is not a moment too soon to do so.

Baroness Williams of Crosby

My Lords, I listened with great attention to both the noble Baroness, Lady Rawlings and the noble Lord, Lord Howell. I do not want to detain the House for more than a few moments, but I do believe that the interpretation of the noble Lord, Lord Howell was somewhat too pessimistic. Also, while I accept many of the comments made by the noble Baroness, Lady Rawlings, I do not believe that the amendment would be helpful in bringing about enlargement at the earliest possible date.

Perhaps I may say a few words about each of those matters. The process of enlargement is a process of iteration between the existing members and the would-be new members, and it is a process which is continuous and ongoing. It does not have to be wholly sequential; it can be conducted at the current time. Obviously, there are elements in the Treaty of Amsterdam that become part of the acquis once the treaty is ratified by all member states. That, in turn, becomes one of the preconditions of membership. Therefore, with respect to the noble Baroness, Lady Rawlings, I agree here very much with the noble Lord, Lord Grenfell, that it would only delay the process of enlargement if the acquis in concluding the Treaty of Amsterdam were to be delayed, as the amendment suggests, until a resolution had been passed on each of these complex areas of reform, probably for a number of years. It would simply mean that the negotiation of the new member countries in accepting the acquis was put off until such time as all those reforms were completed. I do not believe that that would be helpful to the potential new members.

Secondly, among the list of issues that the resolution of the noble Baroness raises, at least one of the proposed changes is already being initiated—I refer by that to the reform of the regional and structural funds. It is my impression that the reform involved in extending these to the new members and in passing through the political difficulties associated with reducing the present scope of the structural funds has already been embarked upon with considerable political courage.

The appropriate director-general of the Commission responsible for regional policy has already indicated that regional assistance must be more concentrated on the poorer parts of the European Union, and has indicated that there should be a reduction in the recipients from about 49 per cent. of the population of the existing European Union to about 31 per cent. in order to reduce the claims on the funds sufficiently to allow a substantial sum to be targeted towards the new would-be candidate countries.

That involves painful political choices because, as the noble Baroness implied—and she was right to so imply—nobody is suggesting a substantial increase in the proportion of the gross national product that is to be spent on the European budget, which continues at the relatively modest sum of 1.27 per cent. of GNP. Incidentally, in my view, that is a figure that is not consonant with some of the wilder charges about moving towards federalism and may be compared to something like a 30 per cent. figure for the US federal budget in comparison to the budgets of the states. This 1.27 per cent. is not going to allow huge generosity with regional funds. Therefore, it does involve a redirection of regional funds and it is quite clear that this process is being embarked upon.

It is understandable that countries that will lose as a result are fighting very hard against that, including, incidentally, our own Government—that is what one would expect and in no way would I criticise or censure them. But it is worth saying that this process has been embarked on and that the Commission has been clear about the change in targeting involved. It will he of great benefit to the new members to receive the approximately 19 billion ecus a year which will emerge should these proceedings continue and succeed.

Secondly, in the area of institutional change, we all recognise that there was a deep reluctance at the Amsterdam Treaty negotiations to address this issue. That deep reluctance—I in no sense try to defend it—was not assisted by the fact that the United Kingdom herself was going through a difficult period of change, from one government to the other. Neither the government who were leaving, nor the government who were coming, were particularly anxious to grapple with this extremely difficult issue. We all understand that the issue has to be addressed before enlargement can take place because we simply could not run the Union on the basis of the present institutional structures. That has to come. But there is no need to delay the rest of the process until the institutional changes have been completed. Indeed, in many ways, continuing the process will speed up the pressures for institutional change.

I turn to the common agricultural policy. This is where I found the remarks of the noble Lord. Lord Howell, to which I always listen with great care and attention—it is always worth doing so—to be more pessimistic than they needed to be. Surely we already know that the common agricultural policy, for good or for ill, will not be extended to the new candidate countries. That has been made plain. It is also clear that in consequence of that there have to be substantial changes in the common agricultural policy, moving towards systems of rural management rather than systems for protecting prices. I would suggest to the House—and here I may differ from other noble Lords—that the pressure on the common agricultural policy to change arises precisely out of enlargement. Enlargement has actually spearheaded the difficult process of reform of the common agricultural policy and that process would not have gone so far unless enlargement had been embarked upon. It is an instance of what one might call constructive synergy, which I believe has occurred as a result of enlargement.

Finally, with regard to that, perhaps I may turn to one aspect of the acquis that is not in the field of economics, which the noble Lord, Lord Howell, so clearly described, but rather is in the sphere of politics. It seems to me that the central achievement of the Amsterdam Treaty, which was to put respect for human rights hack at the centre of the whole of the unrolling European Union development, is of crucial importance to the new countries. The single most important political contribution we can make to them is to put this at the core of their constitutions as much as at the core of the European Union's own structures. In that respect I believe that the extension of the acquis to these areas of human rights, including Article F.1, which says that a country that does not accept fully human rights cannot continue to be a full member of the Community, is a wholly constructive development.

Perhaps I may say a few words about Turkey. I happen broadly to share the views of the noble Lord, Lord Howell, on the issue of the importance of Turkey, which plays an increasingly significant part in central Asia, in the former republics of the Soviet Union and well beyond. Turkey is a key player in a very unstable part of the world. She has been consistently friendly towards Europe, towards the West and towards the United States, and she is a member of NATO. We have to consider carefully not to alienate her. However, it is not unreasonable that one might expect and hope that Turkey could evolve somewhat further in respect of her attitude towards human rights and her attitude towards constitutional and democratic practices. That, to my mind, although certainly not to all members of the Union, is the major difficulty and one we would be more than ready to see overcome. We would do everything we could to encourage Turkey were she to address those issues.

Baroness Park of Monmouth

My Lords, I would like to add my support to the amendment for rather different reasons. I am concerned about two things. The first is that it seems to me that the priorities have gone wrong. An organisation which is working out a common defence policy and planning to have an operational one, as well as contemplating administrative costs in that regard, and also intending to work with and through the WEU, will cause great confusion to the unfortunate people who are to join under enlargement.

They are already dealing with the question of joining NATO, and that is well worked out: everybody knows where they stand. If they are also to find themselves members, without quite knowing where they stand, of a new defence organisation (for lack of a better phrase) which is going to be responsible for peace-making and humanitarian tasks, essentially that is going to require a military organisation and troops. I cannot see where they are coining from at the moment except from us.

It is unfortunate. There should be a sense of priorities. It is important to get the institutions clear first. Until it is quite clear what the relationships are going to be in the end between NATO the WEU and the new defence organisation and how that will affect the new entrants to the Union, there is everything to be said for reforming the institutions first and getting that aspect of it quite clear before enlargement can proceed.

I support enlargement and believe that it is one of the most important things that we are considering. It is even more important that there should be a new set of priorities in the European Union. It should begin by sorting out exactly how everything is going to work before plans are made for "adventures"—I can only call them—in the military sphere.

Lord Whitty

My Lords, a wide range of interesting points has been made in the course of this debate on enlargement, many of which are apposite to the subject. But I am not entirely clear that they are apposite to the amendment. I shall pick up points which noble Lords have made, but I believe that I should address the amendment.

It is slightly bemusing. Possibly it has been overbilled: the slightly ambiguous title calls it "Conditions for enlargement of the Union". As I recall, a similar amendment at Committee stage did indeed refer to preconditions for enlargement, but this amendment does not deal with that but with preconditions for the ratification of the Amsterdam Treaty on the CAP. As my noble friend Lord Grenfell pointed out, we should not ratify the treaty until we have resolved the problems on the CAP, the structural funds and the institutions.

It would have been strange if this House, of all places, had tried to put preconditions on enlargement in order to slow down the process. I believe that we were all moved by the first intervention this evening by the noble Lord, Lord Howell of Guildford, in particular in describing the challenges of enlargement. The whole process of the reunification of Europe is the most important political challenge and difficult project for this generation of politicians. It would have been wrong to put a brake on the progress of enlargement as a result of consideration of this treaty. Therefore, I am grateful that, by and large, noble Lords have not quite said that.

Nevertheless, the almost retrospective preconditions for ratification of the treaty which this amendment raises are unacceptable. This new clause would prevent the United Kingdom from ratifying the treaty for some years. Surprisingly, the new clause has been tabled by the noble Baroness speaking for the official Opposition. I confess that I find it highly disingenuous coming from the party which was in government for the vast majority of the time we were approaching the intergovernmental conference.

I accept that there is genuine disappointment for noble Lords of all parties as regards subsection (c) of the amendment; namely, the failure to secure full agreement on the question of institutional reform, specifically on the reform of the Commission and on the re-weighting of votes in the Council. The House will address those issues on Thursday when it turns its attention to Amendment No. 12.

The Government believe that these issues can be resolved in a relatively simple IGC process, not one that re-opens the whole range of institutional questions as the noble Baroness appeared to imply or involves a changed relationship between the EU and NATO, as the noble Baroness, Lady Park, suggested. We have made quite clear—it is reflected in the treaty—that NATO remains the bedrock of the security of Europe. That will not change in the period that we are considering before enlargement.

We do not believe that a whole range of institutional rearrangements must be faced, but obviously the issues left over from Amsterdam about the Commission and the reweighting of votes in Council must be addressed. I was slightly bemused by some of the implications raised by the noble Baroness. For example, she referred to the appointment of the president of the central bank. She appeared to advocate by implication a significant extension of QMV. I recall that that was not exactly the position of the previous government about senior appointments. They caused a degree of discomfort among our partner member states when as a minority of one they vetoed the appointment of a widely supported candidate for the presidency of the Commission. I was interested and slightly bemused by the change of tack of the Conservative Party on this matter. However, I welcome its openness to the extension of QMV, if that is what it represents.

It is breathtaking for the Opposition to suggest that we should not ratify the treaty until we have delivered reform of the agricultural policy and structural funds. At this time of night it is probably not sensible to go into great detail on the problems that face us on both fronts. In responding to this point I simply ask the noble Baroness to set out for the information of the House the detailed steps that her party took when in power to secure policy reform of this kind in the context of the Intergovernmental Conference which ended in Amsterdam.

The reality is that in the run-up to the election last year the Conservative Party made all kinds of conditions on the signing of the Treaty of Amsterdam. They threatened to veto the treaty in a number of areas ranging from reform of the European Court of Justice to resolution of the issue of BSE, quota-hopping, which the House will again debate on Thursday, amendment of Article 118a in relation to working time and opposition to any extension of qualified majority voting or the powers of the European Parliament. Those threats were made all the way through the approach to the Intergovernmental Conference and we deplored most of them. But at no time was any mention made by the previous government of a condition to secure reform of the CAP and the structural funds before the treaty could be agreed. As the noble Baroness and her colleagues in government at that time are aware, that was never part of the run-up to the Intergovernmental Conference.

In the context of enlargement and the problems faced by the European Union in the coming years, the House will be aware that the Government are fully committed to reform of the key policies that have been mentioned. This is imperative if enlargement is to be successful. But that process must proceed in parallel with the negotiations for enlargement, as the noble Baroness, Lady has said. It cannot proceed retrospectively in parallel with the negotiations on the Treaty of Amsterdam. The United Kingdom Government favour radical reform of the CAP, in particular the reduction of supports. That will need to be done not only in preparation for enlargement but also as a result of the WTO negotiations in the year 2000. We are also in favour of some of the proposals which the Commission has already tabled, but they do not resolve the problem of the full reform of the common agricultural policy. We are in favour of reform of structural and cohesion funds which are fair both to existing EU states and to future EU states and are affordable and durable.

As the noble Baroness, Lady Williams, has already pointed out, the Commission has made proposals some aspects of which are acceptable to us, but we have severe reservations about others. We are also in favour of providing help during the Agenda 2000 rejigging of the budget in order to provide for applicant countries. The noble Baroness, Lady Rawlings, raised the question of whether we were damagingly differential in our support for potential applicant countries. The disparity between payments to those who are in the first wave and those who are in the second wave is relatively small when measured in terms of the relative wealth of the two waves of applicants, and that is logical. There are real limits to the ability of relatively poor economies to absorb large sums of assistance. But the big disparities which I think she was calculating only arise when you take into account post-accession transfers to the first wave. We are continuing to meet the continuing problem of all the applicants—the first wave and the second wave—through the transfer of funds which the Commission includes within the Agenda 2000 programme.

We too are in favour of tight control on total EU spending in the coming period 2000–2006. We will also attempt, as I have said, to make progress on as many as possible of these issues, including institutional reform, in the coming year. We hope to make some progress on budgetary changes by the Cardiff Council. But the reality is that no significant improvement in these budgetary areas will take place at least until we are into the Germany presidency next year. Some of the fundamental issues, particularly relating to the CAP, will go well beyond that.

We are therefore, as noble Lords have said from various points of view, engaged in a quite lengthy process. We are engaged in a process which runs in parallel: improving the situation on institutions, on the budget and on the way the budget is allocated by the existing members of the EU, while at the same time helping the applicant members to meet the acquis, to improve their economies and, in some cases, as the noble Baroness indicated, to enhance the democracies of those applicant countries over that period.

I shall not, tonight, put a timescale on these negotiations. My noble friend Lord Grenfell was right in saying that some of those negotations will take considerably longer than has perhaps been suggested by the rather heightened expectations in some of the applicant countries. Nevertheless, we are committed to an intensive period of negotiation over that time.

We have already started that during the British presidency. We held the successful European Conference on 12th March of all the applicant countries; we have secured agreement to the accession partnerships; we have launched the accession process and we have launched the formal accession negotiations with the six first wave countries on 31st March.

The noble Lord, Lord Howell of Guildford and others referred to Turkey. It is our intention that as far as possible Turkey, through all diplomatic efforts, should be persuaded to rejoin the European Conference process as early as possible, recognising all the difficulties. However, I have to say, in agreement with the noble Baroness, Lady Williams of Crosby, that before Turkey becomes a serious candidate for formal negotiations to join the EU, there are certain severe human rights problems which have to be addressed within that country. Turkey is not being judged by different criteria from the other applicants but the human rights problems are more deep seated in that country than they are with any of the other 11 countries.

The launch of the enlargement process has represented real progress. Those negotiations will take some years. So will the negotiations on the CAP, although there may be some decisions in time for the year 1999 or 2000. The full reform of the allocation of the budget will also take some years to negotiate.

The amendment, if it were passed, would set back the process not only of enlargement but also of budgetary and institutional reform. If we were at this point required before we ratified the treaty to achieve significant progress on CAP reform, on the structural funds and on the institutional areas which were not dealt with by Amsterdam, we would be setting back all these ambitions considerably.

The Treaty of Amsterdam made a number of institutional reforms which help the enlargement process. We should not dismiss the Treaty of Amsterdam as failing to provide for enlargement, as I think was the implication of some of the comments from the noble Lord, Lord Howell of Guildford. It did not make sufficient institutional changes, but, as I have said, believe those institutional changes can be made relatively easily and certainly in time for the medium-term period of negotiations over enlargement.

Given our commitment to enlargement and to a positive future for the European Union, I hope that the noble Baroness recognises the problems which her amendment raises and will feel able to withdraw it.

Lord Pearson of Rannoch

My Lords, before my noble friend rises, I appreciate the—

Lord McIntosh of Haringey

My Lords, we are at Report stage. After the Minister has spoken there should be no intervention other than by the mover of the amendment.

Lord Pearson of Rannoch

My Lords. I ask for the forgiveness of the House.

Baroness Rawlings

My Lords, this has rightly been an interesting debate and I thank noble Lords who have participated. The noble Baroness, Lady Williams of Crosby, made two good points which need stressing. She pointed out that enlargement has superseded the necessary change to the CAP, which has been worrying us all for a long time. Secondly, she made a valid point relating to Turkey, about which we do not usually hear, and I fully support that.

The comments of my noble friend Lady Park about enlargement with regard to NATO were most important. My noble friend Lord Howell of Guildford was right in saying that applicant countries are moving rapidly from command to market economies. However, they still have serious structural problems and the change will take a long time. I am not sure that the picture is as rosy as he depicted.

I am most grateful to the noble Lord, Lord Grenfell, for stressing the reasons for the reforms. The amendment was an exploratory amendment and I agree with the noble Lord that there are not sufficient reasons for delaying the final ratification of the treaty. Enlargement is one of the most important issues. I beg leave to withdraw the amendment, but I may return to it on Third Reading.

Amendment, by leave, withdrawn.

[Amendment No. 7 not moved.]

Baroness Ramsay of Cartvale

My Lords, I beg to move that further consideration on Report be now adjourned.

Moved accordingly and, on Question, Motion agreed to.

House adjourned at seven minutes past eleven o'clock.