Inter-Governmental Conference: European Union Committee Report

HL Deb 29 September 2000 vol 616 cc1055-122

11.7 a.m.

Lord Tordoff rose to move, That this House takes note of the report of the European Union Committee on the 2000 Inter-Governmental Conference (11th Report, HL Paper 92).

The noble Lord said: My Lords, I feel a sense of disappointment, not, I hasten to say, in relation to the report itself, nor to the Members of the Select Committee who took part in producing the report who took on a considerable extra burden. The previous occasion when we examined an inter-governmental conference we set up a separate sub-committee to do so. However, this time that was not possible. Therefore, I persuaded members of the Select Committee to join a working group to take evidence and to produce the report. That, added to the work that they were already undertaking on other sub-committees, put a considerable strain on them. I thank them most heartily for their contributions.

The staff also undertook extra work. I thank Mr Tom Mohan, the Clerk, who, as always, made an admirable contribution to the report. As everyone knows, the Clerks make a considerable contribution to these reports. I also thank my secretary, Sarah Lappidge, who had to take on the additional task of physically producing the report.

We are also grateful to the distinguished people who gave evidence both here and in Brussels, particularly to the ambassadors of the European Union countries. One slightly amusing facet was that the German and French ambassadors insisted on giving evidence together. That moved me to suggest that British foreign policy over the past 300 years had conspicuously failed! We were grateful to receive evidence from ambassadors of the applicant countries. It was important to have their view on what the IGC should contain as they will not take part in the proceedings in Nice. I thank the noble Lord, Lord Williamson of Horton, who did not give evidence formally but spoke to us in an informal session which was most helpful to us. As everyone knows, the noble Lord, Lord Williamson, knows precisely where the bodies are buried!

I feel a sense of disappointment at the lack of progress in resolving the problems that were unresolved at Amsterdam. That is disappointing because the problems, and the possible solutions to those problems, have been known since well before Amsterdam. The situation is disappointing and, we believe, dangerous because the effect on enlargement if solutions are not found before the accession of central and eastern Europe applicant states could be catastrophic. The Select Committee's report on enlargement published last year states: It is an absolute political imperative that the IGC should be completed on schedule". We now reaffirm that at paragraph 18 on page 11 of the report. We underline the "serious and damaging consequences" which failure would have on the confidence of the applicant countries.

Noble Lords who have read the evidence will have noted that the noble Lord, Lord Tomlinson, regularly and properly emphasised the contrast between, on the one hand, the heroic efforts of many applicant countries to bring themselves in line both in a political and an economic sense, and, on the other hand, the apparent lack of willingness on the part of the existing member governments to make any progress at all.

The report fully endorses that view. We all hope that the Government will now attempt to inject an increasing sense of urgency into the proceedings and not wait until the very last minute of the very last hour, as happened in Amsterdam. We all know the consequences of that. The situation was so bad that no one seemed to know what had been agreed in the middle of the night on Schengen and we were stuck with what are now called the Amsterdam left-overs or, occasionally, the Amsterdam Triangle—which reminds me of the kind of black hole into which aeroplanes disappear. I hope that the Inter-Governmental Conference does not also disappear into a black hole.

In Part 3 of the report we examine the main agenda items remaining from Amsterdam. Those are the size, organisation and accountability of the Commission, the weighting of votes in the Council and the extension of QMV.

On the first point, we demonstrate our belief in paragraph 40 that it was the almost unanimous view of witnesses that the most likely outcome would be that in future there would be one commissioner per member state. We understand the desire of all states big and small to have one commissioner at all times. In particular we understand the fears of the smaller countries—both members and future members—that they might find themselves being treated as junior members of the Union. Nevertheless, we say that, we are not convinced that this is a desirable result". We argue—we were supported by the evidence of the noble Lord, Lord Brittan of Spennithorne—that the Commission is already large enough and that there are hardly enough portfolios to go round as it is. We say that, a larger Commission risks being neither credible nor efficient". I dare say that one or two Members sitting not far from me think that it is already pretty incredible and inefficient. An increase in the size of the Commission will certainly not improve that position.

We have heard the argument that national sensibilities can be taken into acount only by having a representative on the Commission. In paragraph 41 we firmly reject that argument. We say that, unless a break is made in this tradition now, we feel that there is no realistic prospect of it happening in the future". For all the reasons given, we consider [that the number should be limited] preferably to below 20".

We also discuss the possibility of finding ways of restructuring the work using an increased number of vice presidents to take charge of policy areas. We mention the idea of using boards or committees to prepare topics for the full Commission. However, we make it clear that we do not favour commissioners without portfolio.

The second item is the reweighting of votes in the Council. In paragraphs 48 and 50 we note that problems will arise if the present system were to be retained unchanged after enlargement; namely, that states comprising a minority of the population could outvote those making up the majority.

The Portuguese presidency report sets out a range of options for reform which we consider. They are shown in paragraph 53 of the report. They are the need to reflect the dual nature of the Union comprising both states and peoples; the need to ensure a minimum population threshold of 50 per cent to obtain a majority; and a system which should not make it more difficult for the Council to make decisions. We agree with its analysis and recommend that, in a double majority system, the first threshold should continue to be a weighted majority", but that the weights should reflect the populations of the member states. We say that if the conference decides to remain with a single majority system, it is even more important to match the voting weights to population size. Again we emphasise the need for agreement to allow enlargement to go ahead.

Qualified majority voting is an area which generates a considerable amount of heat. I hope that we can help to cool the temperature and shed instead a little light. We note that the Government's response confirms that. We are grateful to the Government for the response that we received a couple of days ago which confirms that 80 per cent of the council legislation was already on the basis of QMV in 1996. We note that 73 treaty articles and sub-articles are under examination at present for change from unanimity to QMV. We are aware that some, in particular France and Germany, would like to see QMV as the norm and unanimity as the exception but we also note that this appears to have been rejected. In paragraph 64 we state that, the evidence we have received on this topic suggests that this Conference is unlikely to achieve any significant extension". where QMV does not apply already. Indeed, the German ambassador in his evidence said that there was only one issue the 15 had agreed to move from consensus to QMV: in changes to the rules of the European Court of Justice. That makes such eminent sense that I am sure no one will object to them.

Finally, in the third section we agree in paragraph 88 with the broad consensus view that the extension of QMV should bring a parallel extension of co-decision. We see this as a means of enhancing democratic accountability. Those are the three major left-overs which, again, I emphasise must be settled if enlargement can proceed smoothly.

Among the possible additional items the one which has caused the most concern in the press, and which seems to have some genuine political pressure behind it, is enhanced co-operation or flexibility. This was not formally placed on the agenda by the Portuguese presidency. But the temperature was raised by the speech by Joschka Fischer and other politicians, the French in particular. In the midst of all the excitement our reaction is, first, that there is nothing new. Transition arrangements and derogations have always been accepted. Secondly, we were not convinced that existing provisions are in serious need of revision. It is difficult to identify any concrete proposals. We felt that there was plenty of scope within the existing treaty provisions.

Let us be clear that we must avoid confusing flexibility with the ideas of an avant-garde or pioneer group which we regard as undesirable in principle. Our evidence suggests that there is a low probability of change in this area.

I understand the view of those who suggest that it might be a good thing in itself. I draw your Lordships' attention to the amendment moved by the noble Lord, Lord Lamont, in Appendix 1 which clearly takes that position. I thank the noble Lord most warmly for the way in which he conducted his objection to that section. He made his point clearly and was happy to abide by the decision of the committee. He sincerely holds that point of view, but it was decisively rejected.

The second additional item was the size and composition of the European Parliament. We generally accept the European Parliament's proposals for reallocating seats, while maintaining a maximum of 700 members and a minimum of four MEPs per state. There is a difference between the Committee and the Government on the timing of the change, but that is not desperately significant. We believe that a two-tier move would make more sense, whereas the Government feel that it would be better to do it all at once.

There are two other items of substance that may come forward in Nice but which we did not go into in detail because they have already been dealt with in other Select Committee reports. The first is the Charter of Human Rights, which was dealt with in an admirable report by Sub-Committee E, under the chairmanship of the noble and learned Lord, Lord Hope of Craighead. That report has been debated in the House. I see this week that the French have ceased to push it as an item for the agenda and they now believe that the charter should just be a declaration rather than being put into the treaty.

The second item that may come up is the common foreign and security policy, which was dealt with in a report by Sub-Committee C that was published before the recess and will be debated shortly.

Finally, I come to an item that is not yet on the agenda but is being whispered about in the corridors of power: the possible creation of a second chamber of the European Parliament. We hear that the Prime Minister may float the idea in a speech in Warsaw next week. The Government are said to favour the creation of such a body. I do not want to make much comment on that at the moment, except to draw the Government's attention to the fact that the Select Committee considered the issue five years ago. In paragraph 305 of the November 1995 IGC report, we said: We believe that the practical difficulties of fulfilling a dual mandate as a national parliamentarian and a member of a European 'Second Chamber' … would preclude most members from making an effective contribution in both". We went on to say: Any proposal for a Second Chamber would also have to address the question of whether its members were representatives or delegates. This would entail consideration of systems of mandates from national parliaments, which might be difficult to achieve. These practical considerations led us to reject the idea of a Second Chamber. We do not in any event believe that the European Union needs more institutions".

We shall not leap to judgment today, but I trust that I can ask the Government to have the courtesy to bring the matter before Parliament and submit any proposals to the Select Committees of both Houses so that they can be discussed in detail before the Government go public with them. The time frame may be too short, but as a matter of courtesy, the issues ought to be brought before Parliament.

I conclude by reiterating our disappointment that further progress had not been made. I hope that today's debate does not get too sidetracked into certain happenings across the North Sea. I beg to move.

Moved, that this House takes note of the report of the European Union Committee on the 2000 Inter-Governmental Conference (11th Report, HL Paper 92).—(Lord Tordoff.)

11.23 a.m.

Lord Grenfell

My Lords, the passage oft he summer months has in no way diminished the importance and timeliness of the report. On the contrary, its central message—that the Nice Summit cannot afford to fail if enlargement of the Union is not to risk derailment— has become even more urgent and cogent. I applaud the foresight of the noble Lord, Lord Tordoff, in instigating the inquiry and guiding us with a sure hand to the report's conclusions. It was a privilege to participate in the inquiry. The task of agreeing the text was greatly facilitated by the excellent drafting of our clerk, Mr Tom Mohan.

In opening the debate, our chairman has just given a comprehensive and persuasive overview of the report and its conclusions. With an eye on the clock, I shall limit my comments to our conclusions on the Amsterdam leftovers and on flexibility.

The much-noted speeches of Joschka Fischer and Jacques Chirac earlier in the summer, setting out their by no means identical visions of the Union's future, have sparked a lively debate across Europe. However, at the informal meeting of EU Foreign Ministers at Evian on 2nd and 3rd September, the French presidency rightly insisted again that a debate on the Union's longer-term future must not deflect member states from pursuing the immediate priority of gaining agreement on the items on the IGC agenda.

That does not imply that a parallel debate on Europe's future is neither timely nor desirable. As France's Foreign Minister, Hubert Védrine, has said, with so much reaction to the Fischer and Chirac speeches, it would be "intellectually impossible" for there not to be such a debate. After all, as he insisted, the debate is not the property of France and Germany alone. I am sure that we all agree that it would be unthinkable for Britain to be absent from the debate. I am therefore much encouraged that my right honourable friend the Prime Minister will enter the debate in a speech in Warsaw next week, when I understand that he will set out, inter alia, his ideas for an enhanced role and greater authority for the European Council. Like the noble Lord, Lord Tordoff, I earnestly hope that your Lordships will be given an early opportunity to examine the proposals formally.

On the first of the Amsterdam leftovers—the size and composition of the Commission—the evidence that we took suggested that the likely outcome would be one Commissioner per member state. One might call that the politically least painful solution. However, that solution flies in the face of the member states' declared intention to make the functioning of the Commission more efficient.

We well understand the ambitions of the applicant states and accept that the promotion of national interests is not their overriding motivation in calling for one Commissioner per state. However, a rotating Commission of no more than 20 members could work with far greater efficiency. Indeed, only in a Commission limited in size can real collegiality be achieved. Despite the overall high quality of the Commissioners, such collegiality is too little in evidence. That would make it a sufficiently weighty and influential body to balance any enhanced authority for the European Council, which my right honourable friend the Prime Minister, among others, appears to be advocating.

All may not be lost. On 22nd September, Chancellor Schrõder and Prime Minister Giuliano Amato jointly and explicitly called for a Commission consisting of a number less than the number of member states. They said: Italy and Germany believe an influential and efficient Commission is necessary". I therefore ask my noble friend the Minister whether the Government will press for a similar solution at Nice. I earnestly hope so, but if the 15 instead settle for the line of least resistance, they must, as we insist, formally commit themselves at Nice to changing the Commission's working methods to accommodate such a large college.

Our views on two mooted changes that might work well, and on one that almost certainly will not, are set out in the report, as the noble Lord, Lord Tordoff, has reminded us. In the meantime, I trust that the Government will insist on a commitment to make workable changes as forcefully as I know that they will insist on a satisfactory reweighting of votes as a precondition for losing one Commissioner.

Reweighting the votes is profoundly important, as without agreement on that, agreement on the other two Amsterdam leftovers will be virtually impossible. However, I fear that we are heading into just such a deadlock.

As the report says, we need a transparent and easily understood voting system, but also—and let this be said again clearly—one that best reflects the dual nature of the Union, which is a union of states and of populations. That is why we favour the dual majority system. We are disappointed that the Government prefer a simple reweighting.

The Foreign and Commonwealth Office has told us that some medium-sized and smaller member states were joining the larger states in arguing for a simple reweighting and that the negotiations were now heading towards that conclusion. Well, perhaps the Foreign and Commonwealth Office will be proven right. However, anyone who is aware of the strength of the opinions which still divide France and Germany on what their respective votes should be under a simple reweighting must surely have some doubts. Germany is clearly worried that a failure to take fully into account her demographic preponderance over France will appear undemocratic to the German people and will encourage Euro-scepticism in that country.

France, for her part, has always argued that demographic weight is never the sole criterion in international organisations. And with a presidential election approaching in France, neither of the two leading contestants—neither M Chirac nor M Jospin— will want to have to tell the electorate that they have had to settle for a voting weight inferior to that of Germany. The Franco-German partnership, the French argue, cannot be based on unequal strength in decision-making.

My understanding is that, at least up to the time of the Franco-German closed-door brainstorming session at Rambouillet, Germany, unable to move France off its position, saw some form of dual majority system as the only face-saving way out of this impasse. If that view still stands, it may be premature for anyone to assume that the dual majority option has been swept from the negotiating table. Until France and Germany have sorted out their problem, obviously there can be no overall agreement among the 15 on this crucial reform. Perhaps my noble friend the Minister has more recent and more reassuring news for us on that.

I come now to the last of the Amsterdam leftovers: QMV. The IGC quite rightly decided that the articles and sub-articles which are still subject to unanimity should be examined on a case-by-case basis. In mid-June, Michel Barnier, the Commissioner responsible for the IGC, who had earlier given evidence to the committee, gave an interview to the Financial Times in which he reported that at least half the EU states were agreed on shifting half the policy areas still subject to unanimity to QMV but that different countries were supporting different areas. In other words, there was little progress to report. The most that one can make out of all that is that there will likely be no broad switch to QMV and that we, the committee, will be justified in having concluded in our report that any increased use of QMV will likely be in relatively technical and uncontroversial fields.

However, that is scarcely an encouraging situation in a Union of shortly more than 20 and eventually close to 30 members. In his evidence to us, my honourable friend Mr Keith Vaz, the Minister for Europe, said that the Government would be keeping the unanimity ring-fence firmly erected around tax, social security, borders, treaty change, defence and own resources. So be it. However, I urge the Government at least to take as positive a view as possible where a shift to QMV is being considered in areas outside their ring-fence, limited as those areas now are.

Surely there is an important political argument here; namely, that those who see efficient intergovernmental decision-making as the means of preventing a united Europe of states from becoming a "United States of Europe", to borrow President Chirac's happy phrase, cannot but support reforms which reduce the risk of paralysis.

I come now to enhanced co-operation or flexibility. As we all know, flexibility in one form or another has been a feature of the Union for a long time. Schengen and the single currency are simply recent and prime manifestations of it. We concluded that there appeared to be no serious need to amend the Amsterdam Treaty's provision governing its use in the first or third pillar areas. At the same time, we concluded that the removal of the emergency brake mechanism—that is, the veto provision—should pose no threat to the United Kingdom's interests.

We know that the Government remain to be persuaded of the need to revise any of the current provisions. However, they are "relaxed", as my honourable friend the Minister for Europe put it, about the debate on this issue and are aware that a compromise may be necessary. That is as well because only through compromise will any agreement on enhanced co-operation be reached at Nice.

In the course of our inquiry, we searched for evidence that the fact that the flexibility mechanism in the Amsterdam Treaty had not so far been used could be attributed to the conditions set upon its use. We were unable to prove such a link. However, I remind your Lordships that when states such as France and Germany call for revision, they are motivated less by a concern that resort to flexibility in the past may have been inhibited by the conditions than by their belief, which seems to me a logical one, that in the enlarged Union of the future there will be a far greater need for flexibility and that access to the mechanism will therefore need to be subject to less restrictive conditions. That is why their aim and that of the Commission is not simply to get rid of the emergency brake but also to reduce the participation threshold from a majority of states to one-third.

We know that the governments of Denmark, Sweden and Spain, as well as our own Government, fear that that may open the door to a two-speed Europe. However, to my mind the immediate question is: which is closer to the United Kingdom's interests? Is it the relaxation of the restrictions on enhanced co-operation, keeping flexibility still circumscribed by treaty provisions, or the refusal of any revision and facing the near certainty that France and Germany will do what they have said they will do, which is to seek more radical solutions outside the treaties for those states which are willing and able to move ahead faster? That would lead indubitably to a two-speed Europe with the brake well out of reach of Britain's foot. We cannot say that we have not been warned. Therefore, I urge Her Majesty's Government to be prepared for some reasonable compromise on flexibility to ensure that any further integration by groups of co-operating states is an orderly process conducted within a commonly accepted framework.

Can, then, the Nice Summit succeed? As late as the beginning of this month when the Foreign Ministers met at Evian, one was hearing that member states were still camped on their respective positions and that movement towards meaningful agreement at Nice was minimal. If that really was the case and, worse, if that is still the situation when the IGC Ministerial Conclave is reached on 3rd December, the Nice Summit will face extraordinary difficulties. We should recall the French presidency's repeated insistence that just any agreement in Nice simply will not do. That is no empty warning. As M Védrine told the Financial Times recently: An absence of significant reforms or an agreement just for the sake of appearances would both signify failure". But that is the possibility—even the likelihood—that we face if national intransigence wins over common sense, ensuring that poorly adapted institutions will bedevil and undermine an enlarged Union.

However, let us hope that common sense and a sense of common purpose will prevail. If, happily, it does, what then? In his Berlin speech, President Chirac suggested launching after Nice a process of further reflection over a number of years on the EU's future, involving governments, parliaments and the people of both the existing 15 and the applicant countries. That process, he hopes, will lead eventually to the drafting of a constitution which would include, most importantly, a clear definition of the division of powers between the Union, its member states and their regions so that, as Andrew Duff, a Member of the European Parliament, put it succinctly: everyone knows how they are governed, by whom, and from where". The process advocated by President Chirac depends, of course, on a Treaty of Nice which really delivers the goods. If it does, to my mind the process is not unrealistic provided that it is not hurried'. I cannot say the same for Chancellor SchrÖder's announcement on 4th September that he would propose at Nice the convening of a new IGC by 2004 devoted to what he describes as "the big issues" in the Union's future. That is clearly too soon since an attempt to negotiate agreements on far-reaching constitutional reforms without at least the first wave of new members being a party to it would be quite wrong. The Italian Prime Minister endorsed the German proposal just a week ago, but I am very happy that my right honourable friend the Foreign Secretary has made perfectly plain our Government's objection to such a plan.

As this report states: The contrast between the efforts being made by the applicant countries and the lack of progress by the present Member States on EU institutional reform is striking". I hope that the European Council at Nice will correct that shameful imbalance. However, on present form, I fear that it may not.

Lord Bruce of Donington

My Lords, before my noble friend sits down, will he give the House any information as to the detailed consideration of the new qualified majority rule? As my noble friend is well aware, QMV is applicable to the distribution as between member states and other interests on the sums made available ultimately by the Council itself. Is he satisfied that the existing qualified majority rules in regard to the distribution of funds provided to the European Community do not need some little improvement, which may take some time?

Lord Grenfell

My Lords, all I can say is that I have never been one to say that there is no room for improvement in any of the procedures used in the European Union on the subject of QMV and on the distribution of funds. Of course there is room for improvement.

11.40 a.m.

Lord Howe of Aberavon

My Lords, I suspect I am not the only Member of the House to have a sense of dèjávu about more than one of the topics before us today. Another Danish referendum, for example, and I shall say something as to that later. I shall also speak to the items on the agenda of the IGC.

The first substantial IGC took place in 1985, when I and my noble friend Lady Thatcher, accompanied by the noble Lord, Lord Williamson, were hijacked by Messrs. Craxi and Andreotti into convening the first IGC. Astonishingly in retrospect, we completed the agenda of that IGC in Luxembourg within six months, in December 1985. Oddly enough even that far back—and this is my other example of dèjávu—some items, described as "part of the Amsterdam left-overs", were already there, for my noble friend Lady Thatcher had circulated a document to her fellow heads of state. It was a document entitled Europe, the future and it expressed our willingness to concede our second commissioner as part of the reform of the entire structure. So the phrase "Amsterdam left-movers" substantially understates the antiquity of that item on the agenda.

The other point that one has noticed before, although it has not not yet been mentioned in this debate, is the continuing gap, not just in this country but throughout Europe, between rhetoric and reality—high flown rhetoric of the most high-falutin and frightening kind. I think that gap between rhetoric and reality goes a long way towards explaining the Danish vote. Happily—and totally unsurprisingly— there is no such gap in the report before the House; nor indeed in any of the reports produced by the House's committee and sub-committees on European matters. As someone who has always been a consumer rather than a producer of these splendid documents, I must pay the warmest possible tribute to the work done by colleagues and by the respective chairmen of the committee and sub-committees.

I well remember M. Jacques Delors, as he then was, saying to me that no other parliament, no other institution in the European Community, produced documents of the same quality, and that remains so.

The first illustration of the gap so far as this agenda is concerned is to be found in the discussion of the Charter of Fundamental Rights. I entirely agree with the noble Lord, Lord Tordoff—to whom I extend the warmest thanks for his contribution to this debate and elsewhere—that it would be a good thing if that plays no part in the agenda of the IGC.

In that respect, I believe that we should make the institutions of the European Union subject to the Strasbourg European Convention on Human Rights in order to give us one single integrated legal code covering all these matters. The windy draughtsmanship of charter after charter—I refer, for example, to the Stuttgart Declaration, the so-called Genscher/Colombo Act of 1983—and other similar documents with aspirations and ambitions litter the community, causing confusion as to their enforceability and thus do no good. Charter-mongering, not just in this field, leads only to confusion.

The second example of the gap between rhetoric and reality is in relation to the Common European Strategic and Defence Policy—that is its new name, I believe. The sub-committee's recent report makes admirably clear the gap between the rhetoric and the reality. Thus "headline goals" (quite rightly described as headline goals) of 50,000 to 60,000 people available to deal with emergencies at short notice, are miles adrift from reality. The sub-committee has rightly emphasised the need for, capabilities not institutions … military capabilities not symbolism", and at paragraph 103 it warns, We cannot express too strongly our anxiety at the danger of the CESD turning into a damp squib and consequently into seriously deteriorating relations with the US". It is not just across the Atlantic that the institutions of the European Union risk having their credibility put under threat.

Alas—and it is with regret that I have to say this to some of my colleagues on this side of the House—there are gaps between reality and rhetoric as well much closer to home and they have been perpetrated by members of my own Conservative Party. I never thought to read this comment from a respected commentator like Timothy Garton Ash writing in the Daily Telegraph on the latest Conservative Party policy document: The whole thing is warped by an almost delusionist vision of our place in Europe and the world". His comments are not unjustified because the text on this matter—and there is much that is good, as he recognises, in the rest of the document—highlights the prospect of: a fully integrated superstate with nation states and the national veto disappearing". It suggests that Britain is "drifting to its own destruction" because we are being: Guided by people who believe that Britain cannot survive as an independent nation—and should instead become a small part of a regional bloc". Who are these people who believe these things and who are meant to be guiding us? Are there any such people, for example, in France or Germany who share these beliefs and who are therefore joining together in treating France, Germany and Britain as "small parts of a regional bloc"? I have never met such people, either in this House or in another place, or even in Brussels or Paris. I am not surprised at, though regret very much, the comments of Timothy Garton Ash in what is otherwise a very respectable document.

It is exactly that kind of rhetoric that has so gravely misled the people of Denmark, and could so easily do the same here, with far more serious consequences for us. The Danish currency is already tied to the deutschmark. They think they can forgo influence over wider policy. Denmark has never had and could never hope to have the wider political influence which the European Union enables Britain to develop to our advantage.

If the "No" arguments, which we have heard in this country on that issue, prevailed, my real fear is that the pound sterling would become a "punch-ball" currency, tossed on the sea between the dollar and the euro. This goes back to the days when the noble Lord, Lord Lamont, and I were in government together and we saw the pound fall from approximately $2.45 to just above parity. That is the fate that I regard it as most important to avoid. There would also be the resultant diminution of our influence over foreign policy.

Nothing I have said implies that no change is required as regards the present European Union, still less that there is nothing wrong with the present Government's approach to the European Union. But the realistic prospects for the IGC have been well set out by the noble Lord, Lord Tordoff, and his committee, and it is essential for the IGC to complete the central business for which it has actually been convened: it is essential for enlargement to go ahead, for the credibility of the Union.

It would be misleading and mistaken, however much others might enjoy the distraction, for Nice to begin looking at other longer-term, wider issues. The noble Lord, Lord Grenfell, was right to say that those are matters not just for two or three years ahead but for many more years than that, after a widespread and serious debate.

On QMV we forget that since the Single European Act some 80 per cent of the decisions have been taken by qualified majority voting. The implication is that we should not be too frightened of it but equally that we should not be too anxious to extend it to other areas. The detailed approach now being applied by governments throughout the European Union, where it is thought that the prospect of "progress" is limited so far to one or two items out of 25, is the correct way to proceed.

Regarding the number of Commissioners per state, I agree with everything that the two noble Lords have said. I too should much prefer a smaller Commission: fewer than 20 if possible, but that may be a distant prospect and I regret that.

Regarding the reweighting of votes, again, the committee's analysis and conclusions cannot be faulted. On the whole I would be more prepared than the noble Lord, Lord Grenfell, to accept the change of simple reweighting, but he is right to draw attention to the Franco/German arguments on that topic.

As regards enhanced co-operation, which hovers just beyond the agenda, many proposals have now been put forward. There has been a positive feast of rhetoric from almost every statesman one likes to name. M. Barnier seems to believe that we should move towards a destination of deeper integration throughout the larger Community across the board; that we can take a comprehensive federal advance to deeper integration in that way. I do not believe that that is either possible or desirable. On the other hand, Foreign Minister Fischer takes the opposite view and articulates more clearly than did President Chirac the pioneer in-group proposition to which they are both attached.

The odd thing is that, again, my own Conservative Party seems to join in the same chorus. My noble friend Lord Hurd, who is not here today, in a pamphlet recently produced for the Action Centre for Europe, points that out: that the Conservative Party proposals are, in a sense, facilitating the pioneer group approach. While Joschka Fischer wants to see the pioneer group steaming ahead, the Conservative Party risks making it easier for non-pioneers to fall behind, to lag behind, almost deliberately, on an increasingly selective basis, so that the pioneers will be less inhibited in their steaming ahead.

So, in my judgment, all three approaches would be bad for Europe, bad for Britain and bad for the European Union. The real risk is that they could lead to disintegration, rather than integration, not least, for example, in the field of defence where Britain is playing a crucially important role in trying to secure enhanced European co-operation and, where Britain has the largest interest, perhaps, in achieving that.

So all those changes, including, I fear, the approach within my own party's draft manifesto, risk diminishing, and not strengthening, the influence of Britain in the Union and, therefore, retarding our role in advancing our case.

Finally, I deal with the approach of Her Majesty's Government to the IGC. On the substance and the detail of the matter, I believe, as the committee does, that they are making broadly the right points and they must sustain their efforts to achieve the right result. But I am convinced that their efforts to persuade our colleagues in that direction are inhibited and hamstrung, and will remain so, by continued prevarication on their part over the firmness of this country's potential commitment to economic and monetary union.

I know that the noble Lord, Lord Owen, argues a selective case on that and seeks to be "yes" on the one hand and "no" on the other. I say no more about that except to express my belief that it is serious that so often his group seems to align itself on this issue with the more intemperate advocacy and rhetoric which actually jeopardises one half of his own case.

The truth is that common sense and history alike tell us that we cannot lead on the general front unless we are leading on one of the central propositions of the Union—the single currency—which would, as I believe, be in the interests of this country.

The Government's response to that challenge is simply not robust enough. As the Danish referendum should surely underline, the Government must argue the case for the adoption of the single currency if that is indeed their belief. They have begun at least acknowledging that more clearly. So let them handle the nuts and bolts of the Nice IGC along the lines which the committee has analysed so clearly. But beyond that, let them summon up the courage to argue a more convincing case for the wider future in which they claim to believe.

11.53 a.m.

Lord Thomson of Monifieth

My Lords, I join with the noble and learned Lord, Lord Howe of Aberavon, in expressing gratitude to the noble Lord, Lord Tordoff, and his colleagues on the Select Committee, together with their staff, for a further admirable report. Over the years, those reports have always shown a high level of quality of information, thoughtfulness, and constructive recommendations. That is certainly true of the present report.

When the European Union faces enlargement, it faces, probably, the most difficult of the tasks that it has ever undertaken. It is an historic and massive challenge for both the member states and the applicants. The noble and learned Lord, Lord Howe, has commented perceptively on the gap between rhetoric and reality as an ongoing part of the European debate over the years. It takes many forms. In this particular case, for enlargement, it requires, paradoxically, that we maintain an inspiring vision of what role a united Europe of 27 countries could play for its citizens and in world affairs alongside the need for a stubborn step-by-step pragmatism about the immediate way forward at any stage. That was never truer than it is of the present situation, with the infamous Amsterdam triangle facing the Nice IGC. I noted the warning from our permanent representative in Brussels, Sir Stephen Wall, that a failure in those matters in Nice would cause a serious political crisis.

On the size of the Commission, I am not totally in step with the thinking and tone of the comments made by the Select Committee. From my own experience— although, goodness knows, that experience is almost prehistoric now—of service on the Commission, I do not believe that it is either practical or desirable to abandon the habit of each country having a Commissioner. After all, under present arrangements, the Commission still enjoys the sole power of initiative of policy proposals under the treaty. In those circumstances, I tend to agree with the description that appears somewhere in the report that having a Commissioner from each member state is not for the protection primarily of national interests but so that there is someone on the Commission who understands each national position in the College of Commissioners.

When I served on the Commission all those years ago, a nice euphemism was generally employed where you talked about "the country which I know best" when you wished to draw the attention of your colleagues to the fact that some of the proposals they were making were utter nonsense as far as the United Kingdom was concerned. As the Union enlarges, the smaller countries in particular will be at a disadvantage unless they feel that they are in that position. It is rather easy for the larger member states like ourselves nobly to say that we are ready to give up one of our Commissioners so long as we remain absolutely sure that we still have someone who will be in the college and able to talk about the country that he or she knows best.

But I very much agree with the committee that the corollary to having to resign oneself to a very large and cumbersome Commission is that there should be radical structural change in the internal workings of the Commission. The committee is absolutely right in the linked matter that it is essential to alter the balance of voting arrangements in the Council. For my part, I believe that it is right to say that there will be great advantage in maintaining the double-majority system to reflect the fact that we have a European Union which is a Union both of states and of peoples. That needs to go alongside a significant reweighting. The present pattern simply cannot be sustained very much longer, as the reports points out.

As a Scot, I was interested to read that the combined population of the three Baltic states is comparable with the total population of Scotland. Scotland has a population of 5 million or 6 million within a United Kingdom of around 50 million. It is really absurd that the combined votes of those three Baltic states, when they remain in the Union, should remain comparable to that of the United Kingdom.

Finally, at Nice, no doubt, there will be discussion of that new term of art, "enhanced flexibility". I say simply that I agree with the comment of the committee that there appears to be plenty of space for flexibility within the treaties as they stand. But I argue that as areas of enhanced flexibility develop, and develop they certainly will—the powerful euro 11 group is only an example of developments which lie ahead of us—it seems to me that it is in Britain's interest, as a major player in the European Union, to be inside and not outside those events of enhanced flexibility, shaping any enhancements to take account of our own interests.

That is why I believe that it would be foolish for us in this country to over-react to the negative result of the Danish referendum. We live in a world of global communications, but it seems to me to carry globalisation too far to argue that because the citizens of Denmark have said "No" to their government on this matter, Britain, with an economy that is 10 times the size of the Danish economy and with world-wide interests that are much greater and more varied than those of Denmark, should simply fall behind Denmark in this matter.

This morning I was astonished to hear Mr Portillo argue that, instead of seeking to be alongside France and Germany in the main European league, Britain, perhaps with Sweden, should be bidding proudly to lead a second division, along with Denmark. In the world that lies ahead of us, I believe that Britain has a duty to do better than that for its citizens.

I end by echoing the words of my colleague Andrew Duff, a Member of the European Parliament, who gave evidence to the Select Committee. He remarked that Britain is in danger of being marginalised at a critical juncture in European integration. He went on to say that, the indecision over the single currency … is increasingly thought of as a contributing factor for the euro's comparative weakness". and is enfeebling British influence in the European Union.

The sooner Her Majesty's Government—I echo what the noble and learned Lord, Lord Howe, said—put their backs into convincing the British people that the euro will be good for the citizens of this country, the better it will be for this country.

12.2 p.m.

Lord Owen

My Lords, the Select Committee is to be congratulated on its report. It is extremely helpful to have this type of detailed analysis because the Inter-Governmental Conference in Nice is an extremely important one. First, it will have a considerable bearing on the pace of enlargement. I am frankly shocked by the delays in the enlargement process, particularly in relation to political matters over Poland, and, in fairness to the changes that they have made in their economy, to Hungary and the Czech Republic. Those three countries have come out of communism, made striking changes in democratic and market reforms, and to rebuff them continually risks a backlash in public opinion that we are beginning to see emerge already.

That is such a marked contrast to the way in which the Community of Nine faced up to the political need for speed in enlargement when Portugal, Spain and Greece came out of fascist dictatorships. One of the proudest moments in my life was when we had the presidency of the Council of Ministers for the first time and we took the key decisions to enlarge, and to enlarge at considerable speed, in the summer of 1977.

I believe that such constitutional issues are becoming of crucial importance. I shall not dwell on the Danish referendum. I am very pleased that the Danes have made that choice, but that is their choice; it is their democracy; and, in my view, they have made a perfectly valid distinction between committed membership of the European Union and a decision not to join the euro currency.

Many of their politicians have said that they will not be put into a cul-de-sac by saying never, but they want to retain their right to examine, not just the economic matters, but as we saw in the debate in Denmark, increasingly the political, democratic and constitutional implications of the euro. In this country we would be extremely foolish if we did not also examine those matters.

To take one major issue, personally I accept that we shall have to have one commissioner per country in the European Union. Eventually that will lead to a large Commission. I doubt that we shall be able to reduce the Commission to 20 from 30 plus, but if we could I would not object. We must now reweight the voting system and there will have to be compromises.

In the Select Committee examination there was no discussion of the extremely important defence implications inherent in the Treaty of Nice. I hope that this Select Committee or another one will examine that matter. How many Members of the House are aware that if the present Title V of the common foreign and security policy goes through, with the addition of this new element of defence policy for the first time, and if the language is not amended, we shall be giving the Commission and the European Parliament a locus on defence? That is a major constitutional decision. The St Malo agreement or declaration, which I supported, was meant to be purely inter-governmental. Unless we change the language of Article 21 of Title V there will be a responsibility on the Commission to repot t to the Parliament on all aspects of CFSP. That will include new military aspects and new functions in the military committee.

Over many months I have been in correspondence with the Prime Minister on this matter. He accepts that on purely military matters in the new military committee the Commission should not be there. It seems to me that the person who should report to the Parliament, in addition to the President of the Council, is the new high representative for CFSP, appointed by governments, who at present is Javier Solana. He is extremely well equipped to do that in view of his past experience and distinguished record as secretary-general of NATO. It would not be appropriate for the Commissioner of external affairs to make a report to Parliament on military matters in the new area of defence.

If we allow this, it will not be long before the European Parliament questions the inter-governmental nature of defence. That is the way in which the incrementalism of the constitutional creep in the European Union works. We must examine this issue with extreme care. We know that there are serious anxieties in the Congress, the Government and particularly in the military of the United States about the new European defence initiative.

I believe that, if properly and carefully judged and if examined in great detail, it can be a helpful addition to the common foreign and security policy and even a helpful addition to NATO when there are instances in the European sphere of influence where the United States does not want to commit itself to a military operation but is ready to use the resources of NATO to help EU countries. I am not against it in principle, but the Commission has absolutely no role in that at all. To allow it in through the back-door would be a classic mistake.

Already within the CFSP treaty there is language that military decisions are exempted from qualified majority voting, and quite rightly so. Also in this new area of military decision-making we have exempted it from the power of the Commission over financial arrangements. That has been done deliberately to try to ensure that this new area of defence is treated differently. In my judgment it certainly should not be allowed under the present Article 21 for the Commission to report to Parliament in this defence issue and for Parliament to have a locus on this matter. You cannot exclude the Commission from common foreign and security policy, which is predominantly inter-governmental, if for no other reason than that it has a locus on development policy. We all know how development policy and foreign policy can merge.

This is a substantive issue of extreme importance. If we get it wrong, we shall seriously threaten the credibility and the effectiveness of this new defence initiative.

Lord Tordoff

My Lords, I am grateful to the noble Lord for giving way. It may set his mind somewhat at rest, though it does not answer all the points that he has been so wisely making, that our new Sub-Committee C is devoting its activities to CFSP and has already produced a report on the integration of WEU.

Lord Owen

My Lords, I am pleased to hear that. I hope the committee will look at these questions and the detailed wording of Articles 21, 23, 18 and 27. I hope also that a debate in this House will take place in time to influence the Government's stance at Nice. People in this country have not begun to understand how crucial this question is and of what importance it is to NATO.

I turn to Article 43 of the Amsterdam Treaty on enhanced co-operation or flexibility. I was shocked to hear the speech of the noble and learned Lord, Lord Howe. As a Foreign Secretary he spent much of his time, like myself, in negotiating inside the European Union. He must know that when we have a veto in those small hours of the night when some crucially important wording is under dispute, we are taken seriously. If we do not have a veto and are having the matter dealt with by qualified majority voting or enhanced qualified majority voting, the nature of the discussions and the dialogue is that our representations will carry less weight.

I happen to believe that the flexibility clause is a good clause. But in the treaty of Amsterdam—it was only ratified a year ago—there is a veto. I see it now has this rather strange name of the emergency brake mechanism. But let us not talk in euphemisms; that is a cover for a veto. The issues on flexibility could be of fundamental importance. We know that some people want to use the flexibility clause on the issue of defence. I challenge the noble and learned Lord. There is no way that we should concede that enhanced co-operation on defence over and above that which we are now tentatively spelling out and moving towards should be able to be introduced if we in this country, with our strength and our commitment, felt that it was challenging our national interest. That is not paranoia; it is not suspicion. We know the French aspirations on defence. The noble and learned Lord knows them extremely well. They do not share our view on defence and the way our successive governments have safeguarded, over a number of decades, NATO's position on this delicate question.

Lord Howe of Aberavon

My Lords, I thank the noble Lord for giving way. He must have misunderstood my position, or I failed to make it clear. I do not wish to see any change in that position. Indeed, it is my anxiety that inadvertently the Conservative Party proposals would allow selective opt-outs from future changes and might diminish our influence in the overall role, even in the area to which the noble Lord referred. Clearly, any changes in the Amsterdam position should require unanimity and I hope I reassured him on that point.

Lord Owen

My Lords, I am grateful and apologise for misinterpreting what the noble and learned Lord said. Whatever honest and genuine differences of opinion we may hold about the euro, I respect his contribution over the years. I know that his attention to detail as a negotiator has often saved us from adverse wording. He knows it is the detail that matters. This is not a time for talking in grand, general phrases. The detail is everything in this whole area.

Those are my two major issues. There are some other questions associated with the treaty, but perhaps I may come to the more general question as to the way we handle the politics of the European Union. I woke up this morning to be told that the Government felt that the Danish referendum was irrelevant. That is a strange way to behave for a government who have been telling us for the past week that they were a listening government. The first test seems to have been lost at the first hurdle.

There are important implications to be drawn from the Danish referendum. Of course our countries a re different. Denmark has been content to sit within the ERM. It has not had our disastrous experience. The size of our economies are different. But the nature of the debate which took place was that it was an open and democratic one. There were certainly lessons for all of us to learn about that and the way that it went into the constitutional and democratic implications. After all, this is a country with which we have had centuries of deep friendship; it is a country whose judgment we do not want to dismiss merely because it is a small country. Denmark is a country which has been our ally and our friend and at the very least this Government owe it to themselves to re-examine their policy.

Mention was made of the German and French demand for a constitutional conference in 2004. Somebody tended to dismiss it. Experience shows that when those two countries set their head at holding a governmental conference on EU constitution, they will succeed. It may be pushed off to 2005 but I suspect that it will be 2004. I cannot see how any country can make a rational choice on the euro when hanging over it is an EU constitutional conference of that importance.

I am no longer what I call a party politician; I am not bound by having to make a decision as to whether we have a referendum in the next Parliament or the one after that. But I look at the landmark decision points in the European Union, and that constitutional conference will be a landmark. It is only after we have looked at that and seen the outcome that we will be in a position to make a rational, sensible, national decision about whether or not we should go into the euro. It would also have the advantage of giving us more economic space to see how euroland succeeds. It will give us time to assess the relevance of our previous economic cycle, with its greater alignment with the North American continent than that of the Europeans.

This is not the time to discuss the euro and I do not wish to do so. But I for one wish to say that I believe the democracy in Denmark was shown to be working at an extremely effective level yesterday and I certainly do not wish to disparage its democratic decision. This Government will be wise to listen carefully to that debate. We in this House ought to remember that the parties do not represent public opinion in this country. There is a solid view—69 per cent plus—of people who are making it quite clear that they wish to be members of the European Union. There are very few who wish to pull out. But they do not wish to join the euro or do not wish to be hurried into a decision on the euro.

This House owes it to the country to try over the next few years, following the model of the Select Committee, to go into these deeper political, constitutional and democratic implications and not accept the Government's position that this is predominantly an economic decision; that the constitutional implications have already been weighed and a decision has already been taken. The Government and all of us have barely begun to weigh the profound constitutional, democratic and legal implications of membership of the euro.

12.18 p.m.

Lord Tomlinson

My Lords, I am sure the noble Lord, Lord Owen, will forgive me if I do not follow him too far in his arguments, because there are a number of points I want to make about the IGC report. But I will just follow him on one small item in relation to the Danish referendum.

Of course it is an important Danish decision. But before we read too much into it, we should also recall that there are substantial differences with regard to a decision made in a country that already ties its currency to the German deutschmark and accounts for 2 per cent of European GDP and ourselves. Therefore I do not feel inclined to follow him too much in his argumentation, my instincts and sympathies being much more in line with those of the noble and learned Lord, Lord Howe, in that respect.

I congratulate my noble friend Lord Tordoff on his sterling work in steering what was very much an ad hoc working party through its difficult task to its conclusions. IGCs—call them inter-governmental conferences if you will—sound boring, technical and routine. Yet the reality is that this inter-governmental conference is both highly political and deeply divisive but at the same time essential. It is highly political in all those aspects he has described to the House. I do not propose to rehearse all the arguments relating to the fight over the size of the Commission, the weighting of votes in Council and the extension of qualified majority voting—those highly political arguments which are taking place in the build-up to decisions which must be made.

However, the conference is deeply divisive. That is shown by the fact that the issues have been on the agenda since Amsterdam, following a failure to agree at Amsterdam, and the power struggle between small and large member states continues.

Boring and divisive such conferences may be but they are essential, because those three problems, or rather their resolution, are the essential precondition of a successful enlargement of the European Union. We have said to the countries of central and eastern Europe that they have duties and obligations laid out in the Copenhagen criteria. My noble friend Lady Scotland in an earlier debate stated that the Government would insist on those Copenhagen criteria being fulfilled.

Our side of the bargain was to reform our institutions so that we were a community capable of working with possibly 25 member states. That enlargement is not a process to be entered into lightly, but to many of the applicant countries the fulfilment of our obligations looks exactly that. The process of democratisation has, with our help and assistance, unleashed hopes and expectations of the roles of previously oppressed peoples to join the community of democratic nations through membership of the European Union. We created such hopes and expectations. We, the member states of the EU, nurtured them. We widened the range of countries which we encouraged and if we fail them now the consequences will be dire and the political price incalculable.

The governments and peoples of the EU have obligations and if we fail them on the basis of failure to agree the Amsterdam leftovers, that would be seen as such a dereliction of duty that our hopes and aspirations for a new millennium of peace, prosperity and security could be dashed.

Yet not all the omens are good. We have only to look at the banner headline in this week's European Voice, which reads: France risks plunging treaty talks into crisis That reflects the kind of arguments which took place last week during the meeting of foreign ministers. Perhaps I may quote from Simon Taylor's lead article in the European Voice, where he quoted a diplomat as saying: If they want to provoke a mini-crisis for Biarritz, they are going the right way about it". Normally, my instinct concerning reaching agreement is that it is better to get it right than to get it quick. Between the special council at Biarritz and the inter-governmental conference at Nice, we do not have the option of vacillating further. Getting it right now involves getting decisions quickly. Since Amsterdam, too much time has been lost to too little purpose, other than to foster a feeling in the applicant countries that our ardour and enthusiasm for the process of enlargement is on the wane.

If governments fail to agree, what message does that send to Yugoslavia as it shakes off the shackles of Milosevic? What message does it send to Poland, Hungary, Slovakia, Slovenia, the Czech Republic, the Baltic states and everyone else whose aspirations have been encouraged? The European Union encouraged those ambitions and fuelled them at every stage. The EU has not settled its internal reforms to allow an enlarged community to work. That is the simple but historic duty of the IGC.

All those other questions which have been talked about as possibly for inclusion on an IGC agenda, whether it is the organisation of the European Court of Justice, the charter of fundamental rights or common foreign and security policy, may be important, but if at any stage we are a party to allowing other governments to use them as diversions from the obligation of reaching agreement on those three fundamentals, we will have seriously failed the enlargement process. Those other items cannot be used as diversions from the imperative of agreement on the basic questions, basic to enlargement.

Therefore, the report of the Select Committee is timely. I believe that the Government's response is reasonable, bearing in mind that no government should fully reveal their negotiating position. However, I am sure that we shall hear from my noble friend Lady Scotland, when she replies to the debate, that there is no way in which any British Minister proposes to return from Nice without those essential treaty reforms being agreed so that we have fulfilled our obligation. I am sure that my right honourable friend the Prime Minister needs no reminders about the imperatives of the agreement being fully secured. That is why I so much welcome the Prime Minister's impending visit to Poland and look forward to his speech in Warsaw, a speech which I hope shows a pragmatic way forward without getting too far into unnecessary diversions such as European constitutions, second chambers or legalistic arguments about charters of fundamental rights when we already have a perfectly good Article 6.2 of the Treaty of European Union which is already fully justiciable; and without drifting into flirtations with extensions of inter-governmentalism at the expense of community decision-making processes.

On that basis, I welcome the report. Again, I congratulate the noble Lord, Lord Tordoff, on his work. I welcome the broad outline of the Government's response and I look forward to being able to welcome a successful resolution of our duties to all the applicant countries by our work towards the securing of an agreement at Nice; an agreement which might not be the most exciting in the world but which is one of fundamental and basic necessity.

12.28 p.m.

Lord Lamont of Lerwick

My Lords, it is a great pleasure to follow the noble Lord, Lord Tomlinson, who has a deep and profound knowledge of European matters based not least on his membership of the European Parliament. I agreed with his strong comments about the necessity of accelerating, and taking a more urgent approach to, enlargement.

I was pleased to be able to participate in the discussions and working of the committee. It was a most pleasurable experience. I join others in paying tribute to the noble Lord, Lord Tordoff, for the way he chaired the committee. He subtly directed us towards the right questions and defused disagreement on occasions. I want to thank him in particular for the indulgence he showed towards myself, who sometimes had jarring views compared with the rest of the committee. I fear that I may have to ask the whole House to exercise similar indulgence towards me today, too.

I had not intended to speak in today's debate, but I was recently reminded that I had disagreed with one of the recommendations of the report. That is the point to which I want to direct my remarks.

The report is about the institutional consequences of enlargement. I strongly support and believe in enlargement. As a Eurosceptic, I believe that the main value in the European Union is the enlargement process. If it must exist, that is what the European Union is there to do.

I spend a good deal of my business life outside this House in eastern Europe, in particular in Romania. The goal of enlargement is the basis of reform, change, and the restructuring of institutions in those countries. If enlargement was not possible, it would be a disaster for those countries. To have European institutions that covered only half of Europe would be a denial of the meaning of the term "Europe". I share the views expressed by other noble Lords about the slow progress on enlargement.

When we started our discussions I was worried that on a large number of issues I might not be able to agree with other members of the committee. I was particularly worried about qualified majority voting. Three or four days ago, I wondered whether I had signed up to something with which I did not really agree. Would I have to go along to the House of Lords and say that I shared collective responsibility? I decided to say that I adhered to collective responsibility, in the same way that Clare Short supports the Dome. I thought that perhaps I should say something similar about qualified majority voting. However, on reading the conclusions, I find I am in agreement with them, which is a great relief.

Like the noble Lord, Lord Tordoff, I agree that any extension of QMV will be extremely marginal. I am not a supporter of qualified majority voting on a wide basis. I do not accept the argument that enlargement means that of necessity there must be more QMV. We were always being told—for example, by M. Santer in his term—that Europe should do less, but Europe never does do less. One way of forcing it to do less is to make life a little more difficult for it by having no extension of QMV after enlargement.

I agree with what has been written and said about the proposed European Union Charter of Fundamental Rights. A better route would be to try to get the European Union itself to become a signatory to the charter. We are now told that the charter will be merely declaratory, but it is difficult to believe that it will not strongly influence courts and be taken into account by judges. There seems to be little point in having yet another charter when we already have the European Convention on Human Rights and the instruction to the working parties on the proposed EU charter is, "Do not go beyond it. Incorporate the same rights but please put it in slightly different language". That is utter nonsense.

As to enhanced co-operation, I took a different view. I was outvoted nine to one but was highly encouraged that there was one abstention. I believe that I made some progress. I agree with the noble Lord, Lord Tordoff, that when we listened to the German and French Ambassadors it was difficult to see specifically in what areas they wanted enhanced cooperation. But we delude ourselves if we believe that the French and Germans are not serious about it. I very much agree with the observations of the noble Lord, Lord Grenfell, about Germany and France having enhanced co-operation outside the institutions of the European Union.

If a group of countries wishes to press ahead with faster integration, we should not prevent it. I remember having this argument with Eurosceptics at the time of the Treaty of Maastricht. A number of people whose views on Europe in general I shared nevertheless strongly argued that when I was involved in the negotiations on Maastricht I should have vetoed the whole thing to try to stop Europe moving at all towards a single currency. First, it would not have worked; secondly, I do not believe that it is the right thing to do. We do not have the right to stop other countries integrating in more detail at a faster rate if they wish to do so.

The whole idea of a convoy in which everybody moves at the same speed and in which eventually there must be agreement merely means that we end up agreeing to things that we do not want to do. However, because we must have agreement, we agree to those things because we are part of the convoy which is moving at the same pace. I believe that that philosophy, which is deeply embedded in the Foreign Office, poisons our relationship with Europe. In this country as a whole there is a different view from that of continental Europe as to where we should be going in Europe. There are differences between ourselves, but as a whole this country has a different view of where it wants to go and the kind of Europe that it seeks to build. That view is very different from that which pertains, for example, in the Benelux countries.

I strongly disagree with the observations of my noble and learned friend Lord Howe about the Conservative Party's draft manifesto on flexibility. I believe that it is an excellent proposal. The way ahead for Europe is more flexibility, variable geometry, multi-dimensions and multi-speed. One can draw subtle distinctions between these jargon terms. I believe that that is the correct approach to Europe.

For that reason, I very much welcome the outcome of the Danish referendum which I believe is a brave decision. The Danes have rejected a lot of scare tactics. I saw some of the propaganda put out about Denmark being marginalised and a massive loss of jobs. There was much debate in Denmark about what life would be like outside the euro but in the European Union. The probable effect of the Danish referendum is that there will not be an immediate referendum in Sweden. There will now be a group in the EU comprising Sweden, Denmark and the UK, with Switzerland and Norway outside it, that is not part of the euro.

I was rather interested in the comments of the noble Lord, Lord Thomson of Monifieth, about the second division. He did not appear to like the company that we would be keeping. I hope that he will not think me impertinent if I say that the tone of his remarks reminded me of the observations of J K Galbraith about Winston Churchill when he was Chancellor of the Exchequer and the latter's views on the gold standard. Galbraith observed that Churchill appeared to be more impressed by the imperial quality of the gold standard than by its economic consequences. It does not much matter with whom one keeps company in a currency zone; what matters are the real consequences; for example, freedom to set one's own appropriate interest rate. That is why I am puzzled by the comments of my noble and learned friend Lord Howe about the stability of the euro compared with the volatility of sterling. I do not see great stability in the euro now; nor do I see lasting stability in Ireland with its utterly wrong interest rate which will lead to considerable boom and bust in that country.

The Danes have seen the euro as the political project that it is. The Danish Government have made exactly the same mistake as our Prime Minister in believing that the debate can be confined purely to an economic discussion when it has very profound political consequences. I agree with the noble Lord, Lord Owen, that we are some way along the road to the creation of a kind of European federation which increasingly has the characteristics of a state. My noble and learned friend Lord Howe asks: who are the people who believe in this? I have met plenty of people who believe in it and say so quite openly. I have never met a Benelux politician who does not believe in it passionately. Signor Prodi and M. Delors believe it as, I believe, did Chancellor Kohl.

Europe already has a supreme court, a kind of passport and foreign policy and a currency. It is well along the road towards many of the characteristics of a state and yet it does not have proper constitutional arrangements for its government.

I was amused to be told that Danish voters have no importance; they represent only 2 per cent of EU GDP, so what do they matter? But I thought that the point about being in the EU is that it gives one more influence. Apparently it gives one influence only if one agrees with what everyone else in the EU is doing. I think that the argument about influence in the EU is one that can be overstated.

I was very interested in what Sir John Coles, a former permanent secretary at the Foreign Office, wrote about that. It seems to me that the argument that in the EU you increase your influence—you gear it up—applies only on the assumption that you always have the same objective. People often say to me, "Oh, we have more influence in the GATT negotiations because we are a big group". You do not have more influence if you are disagreeing with the group all the time about what you are trying to do. In the last GATT negotiations in which I was involved we spent more time arguing with the French than we did with anyone else. At the end of the day our position was an approximate position, not necessarily one that reflected entirely our own interest.

I remember my right honourable friend Peter Lilley once going to a discussion in Paris about agricultural policy. It was a meeting of the EU and other countries. When he returned, I asked him, "What was the meeting like?" That was before Sweden joined the EU. He said, "Well, only Sweden had any influence because Sweden is not a member of the EU. Sweden could say what it thought". The argument about influence is very overstated. We ought to think in a clearer way about it. I do not wish to digress too much. I agree with the thrust of the report. I agree with the conclusions. I even agree with most of the comments of the Government in reply to it.

12.41 p.m.

Lord Shore of Stepney

My Lords, we are discussing very great issues today. The fact that we are discussing them is in itself a very valuable contribution, particularly when—I say this with great regret—the Nice conference is early in December and the Biarritz predecessor conference will have taken place before the House of Commons has reconvened. It is above all in the House of Commons that the fate of the nation is decided. But the issues that are emerging at Nice are certainly important to the future of this country.

I should like to say a few words about the events that occurred in Denmark yesterday. I am very pleased indeed, and not just because of a jolly sort of partisan feeling. I have great respect for the Danes. They have a sense of identity and of independence and they value democracy in a way that none of us should in any way seek to disparage. I really felt that the noble and learned Lord, Lord Howe, fell below his normal standards of performance when he indicated that in his view the Danes had simply been taken in by rhetoric and had not understood the reality. If we had had a five-month referendum campaign I think that we would be entitled to be somewhat enraged if after the most mature consideration and debate we were told that we had fallen for rhetoric. It is particularly inappropriate when I think about the British experience with Europe and the one referendum that we had. I remember the whole campaign that preceded our membership of the common market. It was one in which the noble and learned Lord played a very conspicuous part. At the end of the day people felt that they had not been told the full truth about the implications of the treaty and the legislative surrender that was then involved.

I have probably said enough about the Danes, except to say that they have once again given us an additional breathing space, as they did at the time of the Maastricht Treaty when the result of their first referendum was a no vote. We then had an extended debate in the House of Commons, which would otherwise not have taken place. It was a long slow process of going over the content and implications of that treaty, which in my view was one of the most important educational experiences that we have had in our Parliament. It was particularly educational for the governing party at the time, the Conservative Party, which experienced the simultaneous expulsion of sterling from the exchange rate mechanism. It went through a profound and, for many of its members, agonising reappraisal, which led to a party with a different posture and position. I think that the value of debate has been fully demonstrated.

We have the substance of the report—the particular focus on the so-called leftovers from Amsterdam. I do not in any way say that they are unimportant. The three issues were the Commission, weighted voting on the Council of Ministers and the possible extension of qualified majority voting into areas where the veto still stands. Apart from the third of those, they do not seem to be issues of paramount importance. What I think is of paramount importance—it is my main criticism of the report—is how the question of—it is unbelievable that so important a matter is expressed in such innocent words—closer co-operation or enhanced cooperation is to be treated and is treated by the Select Committee. Like others, I always welcome Select Committee reports because they add to the sum of our knowledge. However, on this central issue I believe that the Select Committee missed a trick and indeed came to a fundamentally wrong conclusion in stating that there was no reason to worry about the potential removal of the emergency brake.

As we all know, closer co-operation is surrounded by a number of rules in the Amsterdam treaty. Those rules are important. They include the fact that you have to have a majority of countries in favour of a closer coming together. The essential power that we have is that we can veto that through the so-called emergency brake. Where the committee has failed hopelessly to judge its importance is in how it has in a way failed to understand what the Franco-German thrust, and indeed that of the founding six and a few others, is all about. It is about closer political cooperation and the formation of a semi-state.

I am glad to follow on from the noble Lord, Lord Lamont. He is of course right. We delude ourselves, and worse still we delude our people, when we deny that this is in fact the end game. The bargain that France and Germany will insist on at Nice is that if enlargement is to take place, they are given this veto bypass, this lifting of the veto on the emergency brake so that they can go ahead and form that far closer integrated political union which otherwise would be hindered and delayed and might even be prevented by the admission of another 13 states and with others coming up behind. Enlargement is the link for them. That is what the Nice treaty is basically about.

I understand the ethical case for enlargement. I welcome it and have argued for it ever since I came into Parliament. In fact, in 1964 I formed a group called The Wider Europe, so I am not a newcomer in that respect. Yes, of course, I want to bring those countries in, but we must not put ourselves in a position where we can be blackmailed into surrendering our interests at Nice in order to get the agreement of the French and the Germans, who are not necessarily very keen on enlargement, to make that possible. It is important that we bring those countries in, but the whole range of issues and complications involved with the doubling of membership, with the effects of that on the institutions, mean that it will not work. Of course it will not work if we have 30 or 40 members. One must take account of the fragmented Yugoslav states which are yet to join and of a number of the countries of the Commonwealth of Independent States around Russia itself.

Lord Grenfell

My Lords, I am grateful to my noble friend for giving way. Does he not agree that the maintenance of the veto would deter France and Germany from closer co-operation on their own? If that veto were removed, surely one would have a better chance of France and Germany continuing to cooperate within the terms of the treaty. If one keeps the veto, it will be such a deterrent to them that they will then co-operate outside the treaty. That is what needs to he avoided.

Lord Shore of Stepney

My Lords, there is not the slightest worry in the minds of France and Germany about the present veto. What they want is to have a freedom of manoeuvre, which they certainly will not have under the existing rules and as long as we have the veto. It is our major bargaining chip. If we want to get changes to the treaty, which does not seem to have arisen in the minds of those taking part in the debate, it is indeed a major card to play.

The whole game will change with 15 or more applicant states. The present system cannot work. One cannot have an ever closer union of some 30 European states. One will have something more like the United Nations. We had better start looking at the institutions of the United Nations—a representative council, made up partly of permanent members and partly of elected members, with some no doubt having the right of veto. That would make far more sense than thinking that one could manage with 30 or more states voting on every issue affecting us. We should be calling for a very different agreement at Nice in order to help the countries outside. There is no reason why they should not be allowed a two-stage negotiation. In stage one, they should be allowed free access to trade with the European Union. That is what they need and it is the greatest help that we could give them in terms of economic co-operation. In addition, I would make the only initial requirement that they conform to the Copenhagen principles in terms of democratic life and commitment. We would then have the time seriously to consider all the constitutional implications, which no one has yet done, of doubling the membership of the European Union.

A number of people have referred to the French and German initiatives—the Fischer initiative and the Chirac initiative. We would be very foolish indeed if we did not understand their seriousness. Perhaps I may remind colleagues of the actual proposals put forward by President Chirac when he made his historic address to the Bundestag in Berlin a couple of months ago. First, he called for a pioneer group, which simply reflected what Foreign Minister Fischer had sought for Germany. We are talking about the two most powerful states in the European Union. Secondly, he called for the setting up of a secretariat to promote the thrust towards this much "closer co-operation". What words those are! He then called for the European Union to launch what he called a process—an IGC or a special forum such as that assembled for the charter of fundamental rights—which would then consider it. It would be something to carry forward all the remaining constitutional issues affecting Europe's government in the future—even the frontiers of Europe are to be defined. When the IGC or forum had finished reporting—in, he would hope, around 2004—he would then, present the results as the first European constitution to the governments and peoples of Europe for adoption". Is that just rhetoric? They come from the second or perhaps the first most influential man in continental Europe. No, that is self-delusion on our part. That is what is for real, and it will start the moment the Nice treaty has been launched. We have to widen our horizons and think far more deeply about all the issues involved.

That brings me to my final point which I cannot stress too strongly. I am committing the deadly sin of running over time, but it will be my very last point. What has been brought out so clearly is that we have to have a two-tier or multi-tier Europe. We are faced with countries with different objectives. The original six had their objective of an ever closer union. The neighbours of Germany had a special reason for getting ever closer together. They are creating a quasi-state. We blind ourselves if we do not recognise it. The idea that everyone else should be forced against their will, against their interest and against their history to climb in with the French and the Germans in that arrangement is wholly repugnant and we should reject it.

12.58 p.m.

Lord Williamson of Horton

My Lords, it is an excellent tradition in your Lordships' House that those who have had first-hand experience in various fields should make their contribution to the general debate. I do myself have such experience of at least the last three inter-governmental conferences and thus have some practical knowledge of how they work and, in the graphic phrase of the noble Lord, Lord Tordoff, where some of the bodies are buried.

First, I should like to express my appreciation of the Select Committee's report. It is indeed excellent. I agree with a great deal of it; not quite all of it but a great deal of it. I agree also with almost all the points made in evidence by the noble Lord, Lord Brittan, on the basis of his long experience at the highest political level and, in particular, as a distinguished vice-president of the European Commission. I very much endorse his view that certain issues at this intergovernmental conference are "politically necessary" for the enlargement of the Union. That point was made with great force by the noble Lord, Lord Tomlinson. In my view, it is the crux of the matter. Technical and administrative matters do not count as much as the political necessity to move forward.

However, there are of course certain technical and administrative reasons for improving the working of the Union, as is now being discussed in the IGC and in its margins; but above all, it is politically important to demonstrate to the applicant countries that we have settled questions such as the voting weights and the number of commissioners which will affect them as well as the rest of us. Furthermore, we must demonstrate that the enlargement process is not being held up on those grounds.

Despite what is often said, the heads of states and governments were close to settling these points at Amsterdam. Let us hope that they can settle them satisfactorily at Nice.

Secondly, I should like to emphasise that, whatever the content of the matters discussed, every intergovernmental conference is important. Frankly, I am not too sure that the public and the media have fully understood that an IGC is fundamentally different from a meeting of the European Council or the Council of Ministers discussing political proposals or policies which can of course be changed when circumstances change. An inter-governmental conference is quite different. It is directed to possible amendments of the treaties which determine the allocation of powers and responsibilities between the national member states and the European Union. Only the member states can decide on such changes. They decide by unanimity. They submit the changes for ratification to their own parliaments or to their people. It is an exercise of sovereignty by the member states.

Various references have been made in the report to the agenda of the current Inter-Governmental Conference. I very much hope that this IGC will stick to and decide a number of points which have already been identified, but we need to treat the word "agenda" with a certain caution. These are meetings of sovereign governments and any member state can propose any amendment of the treaties and ask for it to be discussed. The agenda is not fixed; these are sovereign governments in a meeting. Past experience has shown that new proposals from member states can suddenly appear like leaves in autumn. They fall to the ground and then coalesce into packages and the results are not necessarily for the best. I hope that we have learnt this lesson and that the number and nature of the amendments of the treaties at this Inter-Government Conference will be prudent.

The contrast with practice in the United States is indeed interesting. Speaking from memory, I believe that the United States constitution has been changed 13 times since the abolition of slavery. However, within the last few years, IGCs in the European Union have produced massively more changes in the founding treaties of the Union.

I shall turn now to the substance of the IGC. First, the voting weights. This is an issue where clearly we need to promote our national interest—and what could be of greater national interest than the number of votes we hold within a union? It is self evident. Viewed from the perspective of national populations, at the present time the voting weights are of course more favourable to small member states. In practice, I do not think that this has proved to be a significant problem in the current Union—apart from one famous episode in agriculture some decades ago. I was present in the Council at the time. When is the United Kingdom outvoted in the Council? The answer is: practically never. But we have to bear in mind that enlargement of the Union will bring in many more small member states, so we should make some correction now in order to take better account of national populations.

We should also bear in mind that many votes are taken at levels below that of the Council. We tend to discuss only debates and votes in the Council. When I was a Deputy Director-General in Brussels in the 1970s, I presided over many such votes and authorised many hundreds more. Indeed, I believe that I authorised over 900 votes in total during my period in office. When we approach the matter of voting, we must think "national".

The Select Committee has rightly identified that there is more than one way of amending the voting system better to reflect population. This point is important as regards the United Kingdom. I have never forgotten that, before German reunification and based on demographic trends at the time, the United Kingdom was expected, in the fairly near future, to be the largest member state by population in the European Union. We are an extremely large member state, although of course Germany has now increased as a result of reunification. The simplest way to deal with the issue, as the Government hope to do, is to amend the voting weights in a straightforward manner—by adopting a straightforward British approach to the issue. That is one way and I have no difficulty with it. We would then carry that approach through into the post-enlargement situation.

However, if that cannot be negotiated—I am not too sure that it can be—we should at the least establish a second and additional voting requirement which states that at least 50 per cent of the Union's population must be in favour if a qualified majority vote is to succeed. Perhaps we could even consider the possibility of following the example of the Danes and set the minimum majority at 53.1 per cent. In this as in other matters, we need to be conscious, not only of the defensive element—we are always keen on that in this country; namely, the capacity of the United Kingdom to block a decision—but also of the offensive element, because many cases arise where we would like to see the United Kingdom in a position to achieve a majority for the decisions it wants to see in its own interest.

Secondly, I turn to the number of commissioners. This question has been discussed at great length, perhaps even over-discussed. That is not surprising because it is apparently so simple. I believe that the best solution would be to form a Commission of, say, 15 members. As an aside, it may have been forgotten that at the Amsterdam Inter-Governmental Conference, the French proposed only 10 members. However, that is most unlikely to happen. We are left, therefore, with a situation where the first step will be the "five in, five out" proposal; namely, the replacement of the second commissioner of each of the live biggest member states, including the United Kingdom, by a commissioner from each of the first five new acceding countries. In that case the total number of commissioners will remain unchanged.

Then comes the problem: either the number of commissioners goes up to perhaps 27 as further new member states accede; or we establish a revolving system, as is used in some other international organisations, with member states taking turns. For myself, I would not object to a system by which some of the member states might agree that a commissioner from their country would serve for two-and-a-half years; namely, for half of their term. Incidentally, this would help to reshuffle some portfolios after the two-and-a-half year term. When I have suggested this idea in the past, the general reaction has been that it is an idiotic idea. This leads me to believe that its chances of success can only improve.

I should say that, for myself, I am not in favour of increasing the number of vice-presidents. Indeed, I recall that we decided to decrease their number during a past inter-governmental conference. After profound reflection, and over time, other member states agreed to ratify that proposal. I am of the view that more vice-presidents tends to devalue the currency.

Perhaps I may turn briefly to the question of qualified majority voting. The member states went as far as they were able at Amsterdam and I do not see any significant change in their negotiating positions. I expect that the extension of qualified majority voting will be very small, but in my view it is important that the United Kingdom negotiators should give particular attention to those cases where it may be proposed—and I believe that it will—to revise certain articles so that part of them may be subject to unanimity and part to qualified majority voting. That kind of tinkering with long-established texts is not always a formula for clarity. This point will require careful attention.

Finally, I turn to flexibility—or whatever may be the latest term. In general I endorse the conclusions of the Select Committee. The texts are new, only recently ratified after Amsterdam by all member states, and there is no reason to consider them unsatisfactory.

I shall now give joy to the noble Lord, Lord Shore—which I do not often do but I shall do so today—because, unlike the Select Committee, I do not see any reason to remove the so-called "emergency brake". There are two reasons for that. The first is that it is, if I may say so, a part of a deal on a past occasion not very long ago; it gives assurance to some member states and was their condition for agreement to the present text. The second reason is that it is genuinely an emergency brake. It is not a brake; it is not something that will operate time and time again. Only in circumstances where a member state has a peculiar or particular difficulty will it launch this method of blocking action—and, of course, there could be discussions at the highest levels in the European Council in such circumstances.

Finally, I turn to the charter on human rights. It is difficult to say that one is not in favour of charter rights—I am in favour—but the question is whether it is the right way forward at the moment when the European institutions are not subject to the European Convention on Human Rights. I share the view of the Select Committee that that would be the best way forward. I do not think that the European institutions will object to it. I cannot understand why we do not bring them within the European Convention on Human Rights and take a little more time to examine the other question of a separate charter on fundamental rights, perhaps outside the context of the general discussions in Nice.

1.11 p.m.

Lord Harrison

My Lords, the forthcoming IGC at Nice is just that—an inter-governmental conference; one where sovereign governments decide what advances are to be made under the umbrella of the European Union. I make this point—which has just been better made by the noble Lord, Lord Williamson of Horton—to remind ourselves that nothing has been done in the name of the European Union which has not received prior agreement in principle from ours and from all other member states' governments. The notion of a European superstate is the figment of the overwrought imagination of Eurosceptics, who divine in every sensible step forward made by nations working together for their mutual advantage, evidence of a conspiracy to undermine the British state.

Yet every British government contemplate each succeeding IGC as unwelcome as a phone call from the undertaker. Even our current Government, who have demonstrated such intelligence in affairs European, understandably recoil at the thought of the misrepresentation of the issues and the Eurosceptic heckling they will receive from certain parts of the media for their policy of constructive engagement on Europe.

It is time for a revolt of common sense; a time for us to assert that not only is nothing underhand being envisaged by the Government in their IGC preparations, but that failure to develop the European Union and its institutions will represent a crashing betrayal of British interests. In making that case shortly, as I hope to do, perhaps I may congratulate the Select Committee on its report, which I believe represents the quintessence of the sensible way forward for Britain.

How then to prevent the debate at Nice becoming internecine? How can we make some Nice bubble and squeak out of the Amsterdam leftovers: the questions on the size of the Commission, on the reweighting of votes and on the extension of QMV?

Perhaps I may start with qualified majority voting. Does the existence of 14 separate vetoes held by the other 14 countries of the European Union present an advantage or an obstacle to Britain? I suggest that it is the latter. Anyone who has impartially examined the working of the single European market will note that it is still an imperfect market-place. Obstacles remain which clog up the free movement of goods, people, capital and services, concealing protectionist positions by our neighbours and competitors and restricting British entrepreneurs from successfully operating new markets. An example is the European companies statute which has had Methuselahian longevity in gestation. German intransigence prevents the smooth setting-up of cross-border companies benefiting British enterprise. Yet, by clinging on to the nurse of the British veto because we fear something worse, we lose countless gold medal chances for Britain. It is time to veto the veto as an instrument of protectionism. Its sole purpose should be to defend vital—I emphasise "vital"—national interests.

I refer secondly to the size of the Commission. It goes without saying that the UK should trade off the reduction of two Commissioners to one, with a reform of weighted voting, ensuring that countries with large populations such as Britain receive proportionately increased voting powers. If that happens, radical changes in the number of Commissioners can take place to sharpen up the workings of the Commission. We are grateful to the noble Lord, Lord Brittan of Spennithorne, for his insights into the intricacies of the debilitating tour de table method of debate practised by the current college of 20 commissions.

I make two further points. First, it is time for us to dispense with the fiction that the Commissioners have no national representative function. They do—tacitly, and often explicitly. Moreover, applicant countries will hardly contemplate their voices being excluded from the Commission's Wednesday debates unless they feel that their national interests are protected at the top table.

Secondly, the Commission is already too large at 20. It needs to be reduced. My suggestion is that natural groupings such as the Benelux countries, the Scandinavians, the Iberians and, yes, even the British Isles, might provide the basis for identifying the single Commissioners who could combine de jure impartiality with de facto territorial responsibilities. In Britain's case, working with the Irish Republic might give some practical expression to the concept of the Council of the Isles foreshadowed in the Good Friday agreement. The advantage of this formulation is to create a commission that is small and capable of being both efficient and effective in its working habits while avoiding the introduction of first and second-class Commissioners, which would be anathema to smaller member states and to applicant countries. I hope that my noble friend the Minister will be able to respond to this idea when she replies to the debate.

Perhaps I may say a word about the applicant countries. Many of them have worked extremely hard to ready themselves for EU membership, not only in preparing to embrace the acquis communautaire but also to conform to the Maastricht convergence criteria with respect to adopting the single currency. Those who revel in last night's Danish referendum should be reminded that a further 12 European countries are applicants to join the European Union with the ambition of joining the single currency.

I wish that I could report a matching urgency demonstrated by the EU 15 in reforming ourselves so that the rest of Europe can fulfil their legitimate ambition of joining us. The Nice IGC has as its central purpose the theme of reform to prepare for the admission of the central and east European states. I wonder whether your Lordships share with me an anxiety that the EU 15 need to come clean with the applicants about welcoming them in. With the honourable exception of the current British Government, who showed great warmth to applicant states during the 1997 British presidency—including, rightly, encouragement to Turkey about eventual membership—other states and commentators have shown a diffidence bordering on hostility concerning the broadening of the EU. This is manifestly unfair to the applicant countries. Let us say now and in clear tones that the Union welcomes with open arms the rest of Europe.

Of course, in this process of incorporating new member states, it will be vital, as in all earlier examples, to have a period of transition. The principle of all member states adopting in time the complete acquis communautaire is the bedrock of the development of the Union. I mention this because another item that may feature on the agenda of the

Nice IGC is the question of so-called reinforced cooperation and flexibility. Indeed, as mentioned by the noble Lord, Lord Tordoff, an amendment was moved by the noble Lord, Lord Lamont, in Select Committee, the effect of which would have been to create a "jungle Europe", making the EU a banana republic where each country would slip on the banana skins of its own choosing and making, as the laws of the Union were flouted, ignored or bent.

Thankfully, that bad idea was roundly defeated. It is interesting to observe that, in moving his permissive amendment, the noble Lord, Lord Lamont, nevertheless wanted the rules of the single market to remain intact. As I suggested earlier, British interests are being diluted by the failure strictly to enforce the rules of the market. This ambition will hardly flourish if we attempt to adopt a free-for-all in the workings of the European Union as the permissives want. I believe that the Select Committee is right, in upholding Community law, to support the approach of derogation, not dereliction.

Perhaps I may conclude with one final thought. Just as it is important to observe the rules of any club that you join, it is equally crucial to be enthusiastic members of that club—otherwise, why join it? What is the point of being semi-detached? Yet, for too long under the previous administration, Britain maintained that stance with Europe: in it, but not of it. We were season ticket holders, renewing our membership on an annual but qualified basis. Too often, as with the reprehensible behaviour of English football fans on the Continent over summer, we have suggested that we are here only for the beer. For too long we have been ready to party but not to participate in fashioning a dynamic Europe serving all its people.

The current Government recognise only too well the penalties that this country suffers for exhibiting such nationalistic arrogance towards our EU partners and competitors. Nothing is better constructed to put off British business from engaging energetically in the single market than the pall of anti-EU sentiment cast by large sections of the media and the Official Opposition; nor should we be surprised that, in indoctrinating some young Britons with a diet of anti-Brussels sentiment in this country, such youngsters behave so disgracefully on the Continent. The thugs of Brussels' bars and Eindhoven's streets were made here in Britain.

This IGC is a turning point for Britain and Europe. With it, we can take one more step on the way to deepening peace in Europe, securing the rule of law, promoting free and fair markets, improving our environment and observing the highest standards of human rights, while preserving, enhancing and celebrating the unique cultural diversity of Europe that is its most enduring characteristic. I encourage the Government to continue down the road that they have set themselves to achieve that practical and noble goal.

Lord Monson

My Lords, before the noble Lord sits down, I wonder whether he will accept that he made a Freudian slip just now. He referred to our "EU partners and competitors". Is there not a certain inconsistency between being both a partner and a competitor at the same time?

Lord Harrison

No, my Lords. I strongly believe that the virtue of the single market is the fact that it brings us together so that we can create a market within which we can then be most actively competitive. That is what makes us competitive on the wider global field.

1.23 p.m.

Lord Bruce of Donington

My Lords, I listened to the speech of my noble friend Lord Harrison with great interest. I observed that he made a generalised attack upon Eurosceptics. He put much passion behind what he said and only just stopped short of accusing us in political terms of being misbehaving football fans on the Continent. Perhaps I may respectfully suggest to him—and, indeed, to others—that it is very wise occasionally to concede that people with whom one disagrees may have a point here or there that merits at any rate discussion. I am sorry that my noble friend fell short of that, but I am quite sure that he meant well and that what he said carried no personal animosity whatever.

For my part, I have to congratulate the noble Lord, Lord Tordoff, on the report produced by this committee. I should like not only to congratulate the noble Lord personally on the way in which he conducted the committee but also to congratulate all the Members of your Lordships' House who participated in its proceedings. I have found the report most instructive. I believe—this phenomenon of thinking has not been confined to myself—that it has made all of us who have read it think a little more deeply than we might otherwise have done. Perhaps I may add a final, friendly admonition to my noble friend, who is passionate about these matters. When presenting a case, it is often better to emphasise the positive advantages that will accrue by reason of following what one believes to be right than to harp on the dire fate, or fates, that will confront us should we not do what we are told. One is a little positive, the other is a little negative. I have learnt a great deal from the report. I repeat my congratulations to all Members of this House who participated in the committee's proceedings.

Behind all these exchanges, which are often related to obstruse matters— I shall return later to how obstruse they are—it is easy to arrive at facile decisions. One has to be very careful indeed be fore one reaches a conclusion. I do not altogether share the roseate views that have been expressed about the abilities and in some cases the integrity of those who govern our affairs in Europe. I do not believe that one should pay all that regard in the final analysis to them. But it is perhaps necessary to remind your Lordships of the most alarming histories regarding the actions of Herr Kohl of Germany and Monsieur Mitterrand, whose standards of performance in the political sphere, including those in Europe, were rather lower than one would have expected from people occupying those positions.

Similar observations apply to the Commission. The Commission contains many excellent people, some of whom are our own citizens and some not. The Commission has not exactly covered itself in glory over the past four or five years. Even now, the accounts presented to the European Community have been denied certification by the Court of Auditors in the form prescribed by the European Parliament some five or six years ago. So, while taking into account what the Commission may say or what it may want to do, one has to exercise a little caution as regards from whence some Commission rhetoric comes: it does not always come from self-interest; it does not always come from the interests of the Commission or of the Community at large. However, the report gives us a chance to think.

I read with great interest the contributions of a colleague of the noble Lord, Lord Tordoff, the noble Baroness, Lady Stern. She made some interesting comments. She ventured to bring us down to earth as to what the Commission and the Parliament were trying to do. I refer to pages 121 and 122 of the report where the noble Baroness asked a question of the witness, Mr Dimitrios Tsatsos, MEP. She said, I wonder if you have any thoughts about what could come out of this IGC in terms of some messages to the people of Europe about why these changes are a good thing and why enlargement is a good thing and the sort of things that one should be saying about it". Mr Tsatsos replied, Firstly, the huge gap between the people of Europe and the institutional set-up is possibly not as large as it was at some point in the past but it is still very large … the wording of the current treaties is such that no ordinary human being is able to understand them … It also applies to the MPs and staff. It is just incomprehensible … We will only be able to produce a message that is clearly understood and has a chance of being understood by the man in the street if we send a clear message in the form of the Charter; that we want this Charter and it is something that is comprehensible so that anybody can understand it". A further witness was examined, Mr Giorgio Napolitano, MEP who said that he thought that that could, also help citizens to recognise themselves more easily in this first part of the Treaties than in the terrible jungle of hundreds and hundreds of articles of both Treaties". What we are really discussing is the wording of documents. How are these documents relevant to the peoples in the little streets of England or in other parts of the United Kingdom? How are they to understand all the words that are being concocted, with varying views attached to them, throughout the IGC that has been going on intermittently since the beginning of the year, first of all under the friends of the Portuguese presidency—they are numerous, varied and largely unidentified—and then under the friends of the French presidency which succeeded it? What have they been talking about—the construction of a sentence here, the configuration of a paragraph there? What does it all mean in the end? We certainly know one thing; namely, that in the mouths of people willing to quote them these words are attributed the meaning given to them by the person uttering them at the time. But none of them is relevant to what happens in the little streets of England, or, for that matter, in the little streets of other countries which have much greater problems of mere existence and of their people living below the poverty line. What contribution is made to the fates and lives of ordinary people by these endless conferences and mindless mumbo-jumbo of the treaties? Is it likely to get any better?

During the Recess a document was published under the auspices of the Foreign Office. I believe that, thanks to the noble Baroness who will reply to the debate, I eventually received a copy of the proceedings leading up to the conclusion of the 1972 treaty—the original treaty which we signed. I received a complete exposé of all the documentation. For reasons that are still to be discovered, the document was not issued by the Foreign Office itself. It has apparently subcontracted the publication of its documentation on these matters to a private firm in the West Country. At any rate, as I say, thanks possibly to the influence of my noble friend I was able to obtain a copy of the relevant document. The only thing that was missing was a price. Therefore I do not believe that there will be a sustained national effort to promote its sales.

The document reveals something quite extraordinary. It gives a list of the documentation and the diary of daily events from the beginning of the negotiations. I discovered that on 13th January 1932 the British government were handed 32 files of secondary legislation which were part of the acquis communautaire which they had to accept. No one knew about those files or the true nature and extent of the detailed acquis communautaire which we were required to, and did, accept. The document gives a lurid picture of what happened. We were required to give way on practically every major point. The Community stipulated that as a condition of belonging. However, the matter was presented at the time as a real triumph, as it is today.

I repeat that it would do greater justice to those who want further integration—by that I mean essentially the single currency for the time being—to explain in detail the positive benefits that would accrue to us should we take the political step of joining the single currency rather than seeking to frighten us by threatening dire consequences if we do not. I hope that lesson will not be lost; it would be a pity if it were.

For my own part—which has often been called into question with regard to these matters—I recall that I gave an undertaking to your Lordships' House when I was first sent to the European Parliament in 1975 that I would do my best to try to make the whole thing work. I regret that in four years of fairly devoted effort—I think that is generally agreed—I came to the conclusion that it was not possible to make it work. That remains my opinion, but nevertheless wiser counsels—it certainly does not take much for counsels to be wiser than mine—will come to the conclusion that much more can be done without giving way to the French/German diktat which has riddled itself into practically the entire document.

I hope that that will give rise to a calm re-examination of the position and that we shall find that increased co-operation, not coercion, in a number of fields, particularly in environmental fields, is absolutely necessary. In themselves they would almost justify our membership of the European Union.

I hope that those endeavours by responsible member states will be followed constructively, often unobtrusively, by our own Government. Whichever government may be represented, now and in the future, I hope that we shall never lose sight of our right to hold views about our own self-determination without impinging on anyone else's. When one listens to some debates these days, one often thinks that people who are all for a further headlong fling into Europe have forgotten that there are certain intrinsic and personal advantages of being British—and proud of it, too. I hope that we shall not abandon that concept. I hope that between ourselves we may have a more amenable, reasonable and calm argument than has been our lot over the past few years.

1.41 p.m.

Lord Beaumont of Whitley

My Lords, I, too, congratulate the noble Lord, Lord Tordoff, and his colleagues on the production of the report. As the noble Lord, Lord Bruce, said, it has been extremely educational. I thank, too, those noble Lords who have made such interesting speeches, ensuring a good debate, including the noble Lord, Lord Tordoff, followed by the noble Lord, Lord Grenfell.

When the noble Lord, Lord Owen, spoke of the centuries of friendship between ourselves and Denmark, it sounded right. However, I wondered whether he recalled that my great-great-great grandfather, George Canning—by some accounts he was probably the greatest Foreign Secretary this country ever had—demonstrated his friendship for Denmark by bombarding Copenhagen. When considering my reference to that event in my speech, I realised that the noble Lord is right. George Canning bombarded Copenhagen to stop it becoming part of a united Europe. He wanted to stop it coming totally under the Napoleonic sway. We displayed our friendship to Denmark in that way; and a very good thing that was too. I agreed with so much that the noble Lord said.

It is said that in his later life M. Monnet wished that, when founding the united European Union, he had not had to play the economic card but instead could have played the cultural card. He could not do so because he had to continue from the Coal and Steel Community. However, the situation would have been very different if he had. The Green Party believes in a Europe which resembles more the Council of Europe, on which I, with other Members of your Lordships' House, have had the honour to serve over a period of time, than the European Union.

In the world at large we need to move away from the overarching ascendancy of the economic votive and the large multinational corporations to something nearer to the ordinary people of our countries. As we move towards the important conference, we should think more about how we can help people in the streets and on the farms of our countries.

I refer to a document produced by my colleagues in the Green Party, Caroline Lucas, MEP, and Colin Hines who has written recently such a good book on the necessity for localisation rather than globalisation. They suggest that as we move into the IGC we should freeze it and demand a sustainable and internationalist Europe. We should try to put into operation matters which will halt the decline of small and medium-sized farmers and their communities in the west and east, and its acceleration under neoliberal enlargement. We should try to stop the decline in job security which occurs when the bottom line is always expressed by the multinationals in pounds, shillings and pence; and the decline in social services and the rising inequality—which no one can deny—and its acceleration under neoliberal enlargement. We should try to stop the overall environmental decline in Europe. Although the subject is not on the same level, they refer to the dominance of the long distance motorway transport and its acceleration under neoliberal enlargement.

Those aims are difficult but not impossible to achieve. If we move in that direction we shall tackle that aspect about which the noble Lord, Lord Bruce, complains: a Europe which produces endless decrees which, if they accomplish anything, impinge only upon the ordinary people of this country. They stop people from doing what they have been doing all their lives. They make crimes of perfectly harmless activities such as dealing in pounds, shillings and pence. We must move away from that aspect.

I believe in Europe. I am a europhile. With the name "Beaumont" I can but acknowledge my ancestry. We must return to Monnet's wish that he had been able to play the cultural card. Putting it a slightly different way, it has been said that one cannot serve God and mammon. The European Union should be serving God, culture, humankind or humane values. It can do so if it stops the headlong dash for more control and lawmaking and turns its attention, as the noble Lord, Lord Bruce, said, to the welfare of the citizens of our countries and of those who wish to join our enterprise.

1.49 p.m.

Baroness Park of Monmouth

My Lords, I read this admirable report with great interest, not least because, in examining the agenda for the Nice conference and the preparations for enlargement, it reveals a disquieting picture of, if I may quote one of its members speaking in Committee: a Commission overloaded with functions and tasks and a Council which keeps adding to this and developing the area of non-military action to match the defence initiatives, when really the pressure ought to be the other way", The report concludes that, The contrast between the efforts being made by the applicant countries and the lack of progress by the present Member States on EU institutional reform is striking". The report certainly reinforces that conclusion.

We should also be concerned about what will be going on beneath the surface. The Commission is like a giant amoeba, which is defined in my dictionary as a single-celled protozoan, perpetually changing shape. I cannot but wonder whether we really know what commitments we are accepting, almost unconsciously, every day at certain levels. I often wonder how much impact such excellent reports make on those who represent us in negotiations. Proper scrutiny is a valuable weapon, as is accountability. Right through the Maastricht, Amsterdam, Cologne and Feira meetings, our commitments have grown and grown. As the report rightly says, unless there is better governance and more transparency, we shall find ourselves in deep trouble.

We are told that Ministers report regularly to Parliament, yet, to take a small example, the Prime Minister's Statement after Feira makes no reference to the common position on the Mediterranean—the latest manifestation of the Barcelona process, which, as Annex III to the presidency conclusions shows, commits us to conflict prevention and crisis management. That could include military intervention on Petersburg lines. The common position says explicitly: In this context, the EU will take into account further developments of the common European security and defence policy". The presidency conclusions state clearly: As far as security matters are concerned, the EU intends to make use of the evolving common European policy on security and defence to consider how to strengthen, together with its Mediterranean partners, co-operative security in the region". Does that include humanitarian intervention in Algeria?

We have not yet heard from the capability goals meeting what resources there will be. It will be said that no limit has ever been set on the scope of the operations of the common European security and defence programme, but since the Americans were expressly excluded from the Barcelona process and the Euro-Mediterranean partnership, we can foresee some serious problems.

It will also not help that the Euro-Mediterranean charter of peace and stability, which is due to be drawn up by the end of this year and which therefore seems likely to figure in the IGC deliberations, envisages active EU involvement in the Middle East, including the participation of member states in the implementation of security arrangements on the ground". With Javier Solana enjoying an ever more powerful position, I have no doubt that other such commitments are quietly growing, like mushrooms in the dark. We should not forget that through the common position on Russia, the EU is also committed to creating a permanent EU-Russia mechanism for political and security dialogue". That sounds fine, but we are also committed to work with Russia to develop joint policy initiatives with regard to specific third countries and regions, to conflict prevention and crisis management, especially in areas adjacent to Russia or the Balkans and the middle east". I fancy that if Mr Solana should decide to negotiate with Russia over, say, Libya, he could have some difficult conflicts of interest, which it will be beyond our power to influence.

I raise such issues as the proposed further development of the Barcelona agreement because I strongly endorse the Committee's view that it is the proper function of governments, acting through their permanent representatives in Brussels, to ensure that national interests and sensibilities are taken into account when policy is being decided". The great weight of work that is piled on with little regard for the human and other resources of the EU bureaucracy appears to make it tempting to add on ever more new wings to the house before attending to the boring necessity of making sure that the main foundations are sound.

The common position on the Mediterranean that the developing Barcelona agreement requires means that the Council and the Commission shall, in accordance with Article 3 TEU, ensure the consistency and effectiveness of the EU's action. It appears to concede something to national positions by saying: Current arrangements by which member states recognise states, decide on a state's membership of international organisations or decide on the maintenance and contact of bilateral diplomatic and other relations (such as political, sporting and cultural bilateral relations) will not be affected by this common strategy". That is good, although it conspicuously omits economic and commercial relations from the list. The common position then requires states to review their existing policies and actions outside the Barcelona declaration and, where there are inconsistencies, to make the necessary adjustments at the earliest review date.

States must also develop and maintain an indicative inventory of the resources of the Union, the Community and the member states through which the common strategy will be implemented. They must co-ordinate their actions on the Mediterranean region, including in the United Nations and the Organisation for Security and Co-operation in Europe, taking due account of Community competence. In other fora, they must do so in a way consistent with the objectives of the common strategy. I wonder how many bureaucrats in Brussels and in the member countries will have to be recruited to police that common position, which is only one of many, but which must affect our economic and political relations with a number of important but volatile countries. Whatever became of subsidiarity?

I apologise for inflicting so much Euro-jargon on the House. I wanted to give just one example of the unfinished business that will clog up the works of the IGC. In our natural concentration on the urgent issues of enlargement, we may let many other binding proposals and common actions through to save time. Many of them have serious consequences for capability and resources, even if there is no apparent conflict of interest with Mr Solana's expanding empire.

I hope that the report will be read carefully and heeded. I also hope that I have said enough to suggest that, though the Nice summit must clearly concentrate on the issues that must be decided before enlargement can proceed—I notice that nobody has mentioned the common agricultural policy—we must urge the Government to keep a wary eye on the apparently ineluctable process of committing ever more resources, thus restricting our power to act independently elsewhere, all to feed an unaccountable juggernaut.

1.58 p.m.

Lord Borrie

My Lords, as a member of the Select Committee, albeit less diligent in attendance than most, I congratulate the noble Lord, Lord Tordoff, on his leadership of the committee and on his presentation of the report today. The report and the evidence that it contains will be helpful to our Government and to other EU governments before the vital IGC in Nice.

I hope that the arrival in the EU of new member states, including several from eastern Europe, will not be long delayed. That is likely to be a considerable gain for the European Union. However, we should also admit that it will reduce the cohesiveness of the Union. It should be no surprise that each candidate for membership expects and demands a seat around the Commission's table. I believe that they are unlikely to be impressed by the argument that a Commission of 20, 25 or even more members will be unwieldy. It will be unwieldy, but I am saying that the new states will not be impressed by that argument. The eastern European states have not thrown off the yoke of the Soviet Union and the extreme centralisation of power that they endured for many years under the Soviet regime in order to jump into an institutional framework where they have no say in the vital initiative-taking functions of the Commission.

Therefore, I very much agree with the words of the noble Lord, Lord Thomson of Monifieth, earlier in the debate. After all, the Commission has the monopoly power of initiative in the European Union. Of course, candidate members must accept that Members of the Commission are proposed by but are independent of the member states. On that basis, in evidence to our Select Committee the Czech Republic referred to a growing consensus among member states concerning the need for each member state to nominate one of its nationals to the Commission. The Czech Republic said: This is a fundamental precondition for guaranteeing the Commission's natural prestige vis-à-vis the member states' general public". Estonia put it no less clearly: Each member state should have its own representative in the European Commission. This would ensure the Commission's legitimacy". National sentiment is extremely powerful in eastern Europe. And, perhaps because national loyalties and identities were so savagely suppressed in the Soviet bloc, they have tended to blossom and strengthen since 1989. Yes, they want to join in the prosperity and the way of life that they can now see so clearly and visit as often as they like in the West. However, as your Lordships know, back home they have divided and sub-divided so that Czechoslovakia is no more, Yugoslavia, as we knew it, is no more, and even pre-revolutionary Tsarist Russia is no more, let alone the Union of Soviet Socialist Republics.

Slovakia, the Czech Republic and Slovenia are all now applying to join the European Union. They are all single-ethnic, single-national entities, carved out of multi-national, multi-ethnic states that were in turn carved out of the old Austro-Hungarian Empire at the end of World War I. I am not making any judgments. It is not necessarily the happiest of outcomes. However, it is a fact of present-day life on the Continent of Europe.

The Select Committee report recognises that the IGC may agree that there should in fact be one Commissioner per member state. However, our report argues that a smaller Commission would be desirable in the interests of efficiency. I share that view but I have some sympathy with the view put to our committee by the European Policy Forum that, instead of each Commissioner having an individual portfolio, it may be desirable for a group of Commissioners to be responsible for each area of policy.

However—and this was certainly the view of the Select Committee—more important than the matter of how many Commissioners in total there should be is the recommendation that working practices of the Commission be altered radically. As I believe several noble Lords have already said, including the noble Lord, Lord Williamson of Horton, my colleague Lord Tomlinson and others, the Commission's working practices today are under severe strain. I add that, simply because a member state may continue to be entitled, as I believe it will be, to appoint a Commissioner, that should certainly not be regarded as justification for each member state being entitled to appoint a judge to the European Court of Justice or to take a turn at the presidency of the Union as a whole.

What has been happening inside eastern Europe—the divisions and sub-divisions of which I spoke—is, of course, quite different and it provides an interesting contrast with what has happened in Germany. When the European Community was formed in 1957, Germany was still divided by an iron curtain. It had only recently emerged from a fourfold division into zones of occupation. Although West Germany had prospered even in the period between 1945 and 1957 in an amazing way, it was no bigger than the two principal co-founders of the EC: namely, France and Italy.

Let us look at the position now. Following, full unification, Germany strides the Continent like a colossus, its size, its population and its GDP enormous, particularly in comparison with its Eastern neighbours. That means that the institutional arrangements for Commission membership and Council votes are far more problematic than in the early days of the 1950s or even after the United Kingdom joined in 1972. Weighting votes in the Council better to reflect population is in any case necessary. It is a necessary quid pro quo for the bigger countries giving up one of their present Commissioners. Not unnaturally, in its evidence to the Select Committee Germany calls specifically for, a model that is a truer reflection of the demographic differences between Member States". It is good that the UK Government are champions for enlarging the European Union to bring in, among others, former communist countries. As Robin Cook stated during his visit to Hungary in July, it is in the interests of those former communist countries but it is also, as he put it, in the interests of the European Union.

I believe, as the Select Committee certainly proposes, that the United Kingdom should also be champions of the so-called "Amsterdam left-overs" of institutional reform and that they must be finalised. Without that consummation the hopes and expectations among candidate members and potential members will be dashed. As the noble Lord, Lord Owen, said, there will be seriously adverse consequences for the economic and political stability of Europe if that is not done.

I also hope that we in the United Kingdom can look beyond Nice and the next few months and at least in this respect follow the example of Joschka Fischer, the German Foreign Minister in his speech of 12th May. I do not mean in his prescription for full political integration but in contributing to a discussion as to what are our ultimate objectives in Europe. What are we aiming to achieve in the foreseeable future?

Mr Fischer made a most interesting speech and I will highlight two realistic points he made: first, about the poor acceptance among the peoples of Europe of the European Parliament; and, secondly, the point about the low turn-outs for European elections. Beyond December the United Kingdom should go for reforms which are more far-reaching than the essentials for enlargement, particularly, as the phrase goes, to try to reconnect the peoples of Europe with the European Union institutions. I thought that the noble Lord, Lord Tordoff, was unduly wary on this point, because I believe that a United Kingdom lead in linking national legislatures with the European Union by, for example, the creation of a European senate constituted by national legislators is surely well worth considering.

No doubt much more needs to be done to deepen democratic values in Europe.

2.9 p.m.

Viscount Bledisloe

My Lords, many of your Lordships have expressed appreciation of the efforts of the noble Lord, Lord Tordoff, in his preparation of this report. I venture to suggest to the House that it is an opportunity for Members of the House to express their wider gratitude to the noble Lord, Lord Tordoff, for all the amazing work he does in chairing the Select Committee. Only since I have sat on the committee have I begun to appreciate the vast amount of effort he puts into it, the vast amount of travelling he does, his meetings with so many people, and so on. The House truly owes him a very great debt of gratitude.

The lowly place I occupy on the List of Speakers demonstrates that the officials of the House have a very just and accurate appreciation of my lack of knowledge on matters European and on the limited contribution which I can make to this debate. I wish to speak solely on one issue, and that is the size and composition of the Commission which is dealt with in paragraphs 30 to 45 of the report.

As a practical man, I hope, who regards it as very important that things should work properly, during our investigations and deliberations it struck me forcefully that on this issue there is a real problem.

It became apparent to us, and I suspect it was well-known by most of the other members before we started, from what we were told both on and off the record, that the Commission is already too large to be an efficient executive. Surely we must all accept, whatever our views about Europe—and we have heard varying views about Europe today, perhaps not surprisingly— that the Union can work only if it is led and well led by an efficient executive.

As is set out in paragraph 41 of the report, Commissioners are not meant to be representatives of their countries. The treaty requires them to be completely independent in the performance of their duties, and it requires that they shall neither seek nor take instructions from any government or other body. The states undertake not to seek to influence the members of the Commission in the performance of their tasks.

From the evidence it is absolutely plain that that is a philosophy which is in practice wholly ignored, and that the Commissioners do regard it—and it is regarded by their countries—as an important part of their role, as the noble Lord, Lord Thomson, said, to put the point of view of their particular country, albeit disguising it as being the part of the Union which they know best.

Lord Thomson of Monifieth

My Lords, I am grateful to the noble Viscount for giving way because I hope that he will not misunderstand what I said. When I became a Commissioner, I took a very solemn oath that I would be a European Commissioner and not take any instructions or in any way be the direct representative of the government of the country from which I came.

However, I regarded it as one of my duties to inform my colleagues, when proposals were made, as to what I thought the general British public might think about those proposals and whether or not they might find them acceptable. That is totally different from in any way being under instructions or a representative of the government of the country from which I came.

Viscount Bledisloe

My Lords, I fully accept that. Of course, I do not suggest that Commissioners are puppets with a brief drafted in Whitehall or in any other similar part of the Union. It is plain from what the noble Lord, Lord Brittan, told us, which is set out in paragraph 43, that because each Commissioner has a country, he regards it as almost his duty to speak in a tour de table, as the noble Lord, Lord Brittan described it, on almost every subject which is under discussion rather than merely, as one hopes happens in a Cabinet, although I have never been in one, where only those whose departments are particularly involved or who have particular views feel obliged to take part in the discussion. Quite plainly, a system whereby every single person speaks on every topic is a totally inefficient way for an executive body to conduct its proceedings or to attempt to reach a sensible or prompt conclusion.

Therefore, we have a system which is inefficient at present. If the Inter-Governmental Conference ignores that point and succumbs to the idea of one Commissioner for one state, surely two things are inevitable. First, there will be a further demonstration that Commissioners are expected to represent the attitudes of their country because if it is said that every country has one Commissioner and no country has more than one Commissioner, then that is surely saying that that Commissioner must speak as to the views of his country. Secondly, if that is decided at this Inter-Governmental Conference, then surely the pass will have been sold for all time and whenever there is an enlargement in the number of states, so there will be a corresponding increase in the number of Commissioners.

Moreover, as the noble Lord, Lord Borrie, indicated, there can be an enlargement of the number of states because states fragment and not merely because one takes on further areas of Europe. Indeed, listening to the noble Lord, Lord Borrie, it occurred to me that it was a rather good argument for independence for Scotland because on that basis, we should have three Commissioners rather than one. There may be other possible arguments against it. But if some of the influences of the countries of Europe succeed in fragmenting their countries, that is another reason that there could be ever more Commissioners.

Surely it is unrealistic of the noble Lord, Lord Williamson, to think that we can give one Commissioner to each state now and say, "Well, that is all right because it does not increase the overall numbers" but then later, when other countries join, say, "Well, we must now change the principle and you cannot have one". I venture to suggest that either the nettle must be grasped now or the pass will be for ever sold.

The report says that the members of the committee are not convinced that one Commissioner per state is a desirable result. That is very nice, courteous language. I should go somewhat further and say that I am wholly convinced that it is an utterly undesirable result and that it is very dangerous for the future of the Union to sacrifice the opportunity to make the institution work merely on the grounds of considerations of political expediency.

I venture to differ from the noble Lord, Lord Borrie. I see no reason why limiting the number of Commissioners should be offensive to the applicant states, provided that the principle on which the number of Commissioners is limited applies equally to the existing states as well as to the applicant members.

Obviously if you say, "Everybody who is here at the moment can keep a Commissioner but for all you new applicants, there are only a couple of new Commissioners and you can share them out between you", they would be entitled to take that amiss. If a new principle is adopted whereby smaller countries or groups of countries share a Commissioner on rotation and that principle applies equally to the existing countries as to the applicant countries, I see no reason why it should be found by the applicants to be offensive.

Inevitably, in reality, with a team of 20 or more Commissioners there will be first and second class citizens. Not all of them can have important portfolios and inevitably the larger countries will have the bigger portfolios. In a group of 25 or 30 not everyone can be as important as everyone else, even though they may have the same legal status.

I hope that the Minister will be able to tell the House that the United Kingdom will press for a sensible solution that will work and that it will not give in to the easy argument of expediency.

2.20 p.m.

Lord Roper

My Lords, as one of the non-members of the Select Committee taking part in this debate, I begin by joining the universal gratitude to the committee, and particularly to my noble friend Lord Tordoff, for their further contribution to your Lordships' consideration of European matters with this report on the Inter-Governmental Conference.

For a long time I have been an admirer of the committee. Some 25 years ago, when serving on a committee in another place dealing with European matters, I admired with envy the depth and expertise of your Lordships' committee covering such matters. Subsequently, in the 1983–84 Session, I had the honour to serve as specialist adviser to the sub-committee chaired by Lord O'Brien of Lothbury, dealing with the future financing of the European Committee. I was able to see at first hand the serious way in which the committees of this House addressed those important problems.

Such reports are not only of considerable value in improving the quality of debates in this House, but they play an important part in improving the quality of debates and the study of European matters more widely in this country and further afield. Therefore, we should be particularly grateful for the work of all those who serve on the committee as well as of those who serve the committee and produce such excellent reports.

It gives me particular pleasure to speak from these Benches in strong support of most of the conclusions reached in the report that we are considering today. In particular I support what was said, first, by the noble and learned Lord, Lord Howe, and subsequently by the noble Lords, Lord Tomlinson, Lord Lamont, and others, about the real importance of reaching a timely conclusion at Nice so that the European Union can go ahead with what is the most challenging task of the next decade—namely, enlargement.

I was going to risk the temptation of being diverted by Denmark, but the words of the noble Lord, Lord Beaumont of Whitley, who referred to his great grandfather, reminded me that our first non-co-operation with the Danes on monetary matters led to what was known as the Danegeld. Also if we had not been diverted by Danish activities, we would probably have won the Battle of Hastings and the noble Lord and his colleagues would not have arrived in this country. The moral I draw is: do not be diverted by the Danes!

One small criticism of the work of the committee is that paragraph 12 refers to Articles 1 and 2 of the relevant protocol of the Amsterdam Treaty, but it has not paid sufficient attention to Article 2, which is quoted in paragraph 12 and which calls for, a comprehensive review of the provisions of the Treaties on the composition and functioning of the institutions", at least one year before the membership of the European Union exceeds 20. Of course, that is not the direct business of this IGC, but as we have heard from the debate, particularly in the speech of the noble Lord, Lord Shore, it certainly overhangs the current IGC and, unfortunately in my view, distracts us. It is of course quite likely that the first group of states to be admitted will bring us above 20 and therefore trigger Article 2 in 2003 or 2004.

However, before returning to that matter, I should like to comment on the three Amsterdam leftovers and the Feira addition to the theme of reinforced co-operation or flexibility. It is a mistake to think that, just because we refer to them as "leftovers", they will be easy problems. As the noble Lord, Lord Tomlinson, indicated, it is because they were difficult at Amsterdam that they were left over.

I start with the matter recently addressed so effectively by the noble Viscount, Lord Bledisloe. I have a great deal of sympathy with the view of the committee expressed in paragraphs 41 and 42 that the Commission should be limited to 20 or fewer. However, I listened with great interest to the remarks of my noble friend Lord Thomson of Monifieth. It seems to me that a solution which may well appear rational at Westminster, and even desirable, based on the assumption which may or may not be justified that this country will always have a Commissioner, may not necessarily look the same elsewhere.

Lord Tordoff

My Lords, I thank the noble Lord for giving way. He may have noticed that when we were taking evidence from the French Ambassador I had the temerity to ask whether he considered the possibility of the French being without a Commissioner at any time. He seemed remarkably unfazed by that thought.

Lord Roper

My Lords, the noble Lord, Lord Tordoff, is quite right. One is always much more radical about things which do not affect one directly.

The Commission, in its paper, referred to the system of rotation institutionalised in the treaty while respecting the strict equality between the member states. So everybody may find themselves being rotated. The size of the Commission and the weighting of votes, as the noble Lord, Lord Borrie, indicated, are both highly political matters. In part, they are the way in which member states sell the Community to their public. That applies particularly to the candidate countries. We can all imagine the outcry in some organs of the press in this country if there were not to be a British Commissioner. I hesitate to think what might be suggested if we were to be represented by a Commissioner who came from the Republic of Ireland, however excellent he might be. We know how the press in this country have criticised the Commission even though we have always had two Commissioners of great quality, many of whom are present today and, indeed, one of whom—my noble friend—has contributed to this debate. There would be a great deal more sensitivity if we did not have Commissioners—and I think particularly of countries entering the Union which have to face referendums. They would have to face those referendums knowing that it would be claimed that decisions would be made totally in their absence.

Even if we remain at one Commissioner per country, there are real problems, which were addressed particularly by the noble Lords, Lord Williamson and Lord Tomlinson, in relation to the possible arrangements of the hierarchy—increase in the number of vice-presidents—which the Government, in their reply to the Commission, suggested that they might be willing to accept. Indeed, they put that forward in March. But it may produce more problems than it solves, as the recent issue of European Voice indicates.

Some other considerations apply to weighted votes. There can be a loss of face if one's proportion of votes is decreased. My recollection is that at Amsterdam it was the fact that Belgium was no longer going to have equality with the Netherlands which brought the negotiations to a stop. Member states want to be sure that they have a sufficient say in the decision-making process. The key question, of course, is whether the IGC goes for a re-weighting or for a system of dual majorities, as argued by the committee. The committee favours the dual system. I have some sympathy for the position which the Government put forward in their response.

I have a feeling that the dual system tends to be rather cumbersome and not necessarily very transparent; it is quite difficult to explain to voters. I was therefore interested to read recently that, when the Commission tested the two main proposals—that is, a direct re-weighting or, alternatively, a double majority system—in relation to the decisions which had actually been made in the three years of legislation before Amsterdam, it was found that, whichever mechanism had been used, not one decision would have been different. I believe that such empirical testing is at least of interest, although perhaps people might have voted differently if different voting systems had been in place. However, if one analyses decisions within the EU one finds that decision making is rarely, if at all a battle between larger and smaller member states. People line up on rather different issues.

Perhaps the most difficult and important issue, particularly for this country, is qualified majority voting. It is worth recalling that the United Kingdom was not the most reluctant about qualified majority voting at the time of the Amsterdam negotiations.

Many of the 73 articles and sub-articles are technical. It will he relatively easy to produce a list for Nice of perhaps as many as 10 to 20 items dealing with rules of procedure and the question of nominations to various bodies.

However, I do not believe that that will be enough. I believe that even the noble Lord, Lord Bruce of Donington, might be prepared to see the arguments for moving to qualified majority voting on environmental matters, for which he made such an eloquent plea in his important intervention. The same could probably be said for the common commercial policy, without getting into the area of greater sensitivity referred to as the "ring fence" of Her Majesty's Government; visas, immigration and other Schengen-type matters, social policy or taxation.

As regards qualified majority voting, there is something of an irrational fear in this country. Again, it is worth looking at the evidence. It is interesting to know that, of the four largest members states in the EU, the UK finds itself in a minority on issues decided by qualified majority voting less frequently than any of the others. Perhaps the Foreign Office has done some detailed work on that and the Minister will be able to refer to it.

We on these Benches agree with the committee that co-decision by the Parliament should follow the shift of decision making in the Council, as referred to in paragraph 88 of the committee's report. On that matter, we do not share the view expressed by the Government in their reply.

As regards flexibility, I have more sympathy with the views expressed by the noble Lord, Lord Howe, about the risks of rhetoric rather than reality than with the views expressed by the noble Lord, Lord Shore, who on this occasion did not seem to suffer from the English vice of understatement. I am always puzzled by calls for more flexibility because so little has been done to make use of the opportunities which already exist in the treaties. I should be more interested in people calling for it if people had used what they had. Therefore, I should want to examine more carefully the issue of the emergency break but I am worried about the risks of one country being able to block what is clearly in the interest of another, as Greece was able to do for a significant period over the recognition of Macedonia.

In his introduction, the noble Lord, Lord Tordoff, referred to the speech which we understand the Prime Minister will make next week in Warsaw, and in particular to the suggestion that there might be a second chamber for the European Parliament. For one who has recently arrived in your Lordships' Chamber, it might be though inappropriate to be opposed in principle to a second chamber. However, like the noble Lord, Lord Tordoff, I believe that the United Kingdom Parliament ought to be consulted before such a proposal is formally made. At this stage, I, like others, see many objections, but in view of the time I will not elaborate on them today.

I should have liked to refer the noble Lord, Lord Owen, to paragraph 26 of the committee's report, which he may not have been able to see. However, as he is no longer in the Chamber I shall follow the conventions of the House.

Finally, I turn to the question of a further IGC which I broached at the beginning of my remarks. Since the informal meeting of foreign ministers at Evian, referred to by the noble Lord, Lord Grenfell, and the statements by Chancellor Schröder and Prime Minister Amato, the issue of a second IGC has come to the fore. It is a tempting prospect. There are many on these Benches who would support the views put forward so effectively by Simon Murphy MEP, who spoke so eloquently at Brighton at the conference of the party opposite. He called for the opening of a debate on a written constitution. I assure noble Lords that I shall not open that debate here today.

I believe that the Government must undertake a careful analysis of the costs as well as the benefits of another early IGC. If there was a prospect of a further IGC before enlargement there might be leftovers from Nice, as there were leftovers from Amsterdam. Would the candidates be involved? We remember the effects of decisions on fishing made just before the United Kingdom came into the European Union in 1973. I believe that there should be further reflection on these issues, but ratification of the first group of accession treaties should be completed before the substantial negotiations on a future IGC are undertaken.

2.35 p.m.

Lord Howell of Guildford

My Lords, it has been a privilege to listen to this debate today. That is not surprising considering the immense experience, knowledge and skill of those who have participated in the debate. Almost all of the participants have at one time or another played a part in the great issues under discussion. It is a pity that it is all being tucked away on a Friday. That is the inevitable outcome of the Government's business timetable. It probably means that there has not been much media interest in what is really the central issue of our times and this country's future.

As everyone has recognised, the report is excellent and makes good reading, as one would assume, since it was produced with the guidance and skill of the noble Lord, Lord Tordoff. I had the honour of being a member of the committee at the beginning of this inquiry, so I can assert—I shall probably be contradicted—that the early stages were excellent. I greatly enjoyed serving under the chairmanship of the noble Lord.

The subject of the report is precise and sensibly focused; indeed, it was the intention that the IGC should be narrowly focused. The whole argument was that the IGC would focus on the issues left over from Amsterdam—the Amsterdam triangle—push through the work according to a tight schedule, produce a new treaty and then enlargement could roll forward. That is the scene which the report perfectly sensibly addresses. Unfortunately, real life has not worked out that way for a number of reasons that I shall touch upon before we hear the Minister.

Although it is important that the IGC should be signed, sealed and produce results, its momentum has been blurred and slowed and other things have got in the way. In setting out some of the diversionary, distracting issues that create real questions as to whether the IGC will deliver on time, or, if it does, whether its results will help enlargement, I should like to hear how the Government intend to tackle these matters. No longer do we want to hear that there are no wider problems and it is a matter of minor adjustment with the screwdriver and everything will roll forward. The position is that a profound debate is going on throughout Europe, even within applicant countries, about the future shape of Europe and its stance.

Although a parallel debate can go on, as the noble Lord, Lord Grenfell, rightly said, the truth is that it is a bit like saying that there is a need to adjust the engine of a motor vehicle while it is in motion. That is very tricky. One needs to put the motor vehicle into a garage before one can do anything of even a minor nature. Therefore, to proceed with an IGC which touches on issues that are part of an enormous new swirling debate is bound to be difficult. I hope that the noble Baroness will reveal to us that the Foreign and Commonwealth Office, which earlier appeared to try to suppress debate in this country, despite the noise and din coming from every corner on the future of Europe, has now woken up to this and is producing some new ideas. We hear one or two new ideas like a senate, an upper House or a second-tier Parliament on top of the European Parliament. I do not think that that will work, but at least that is an idea coming from the Foreign and Commonwealth Office.

We have rightly avoided a post-mortem on the events yesterday in Denmark. I do not intend to depart from that trend now. If there is an obvious message from the result yesterday, it is that Europe works best when it lets countries decide their own affairs. If a country departs too much from that, rejection for this or that scheme—in this case joining the euro—is bound to result.

Running through this debate has been the enormous question that the Select Committee addresses. Of course it means dozens of different things. As the committee says, in a sense it is a state of mind. There is plenty of room in existing treaties for flexibility, with different groups doing different things. We have that now. I do not feel too strongly that that is a vast new issue. Nevertheless, it is perfectly clear—this again muddies the waters of the IGC—that different groups of countries will push ahead—or along, not always ahead—in different ways. We should not lose too much sleep about that.

In the middle of the IGC in Berlin there was the potential torpedo by the President of France when he said that there should be a completely separate secretariat and another agenda with a different schedule which would rush towards greater integration between France and Germany. Anything that ensures peace between France and Germany is good. If France and Germany wish to proceed in a certain way, again I would not lose any sleep over that. But to say that that means moving ahead, depicting that as the future of Europe, and that the rest of us are somehow isolated is a completely false and reverse way of looking at the truth of the matter. If France and Germany, or any other countries, want to proceed with this sort of force-fed integration imposed from on top, let them try to do so. I believe that instead of that being Europe moving ahead, it is Europe moving backwards. That is yesterday's way of making Europe work.

The Europe of the future will get all its dynamism from greater diversity and from greater variations and within the overall framework of the European Union itself. There are plenty of visions of Europe other than more integration and there are plenty of other ways of moving Europe forward other than pushing Governments, and possibly unwilling peoples, more and more together. The more readily the rulers of Europe understand that Europe is a vast diversity of countries about to increase the better. There is a Europe of Poland and Sweden, a central Europe of the Czech Republic and Hungary, a Europe of the Iberian Peninsula and a Europe of the Nordic countries. All these Europes can and should be allowed to work together or not work together in various ways in a multi-patterned mosaic. Any group that says, "No, we are the real Europe. We are the ones that are ahead and the rest of you are dragging behind", is making arrogant assumptions about its own plans, which may well come apart. There are other visions of Europe.

That is the difficulty which has blurred the IGC operation and made it difficult to be sure that these neat conclusions will stay in their boxes and all be delivered on time. The second problem that has dogged the whole situation, and it is woven into one of the key IGC issues, is the Commission. The IGC is concerned with what kind of Commission there should be in an enlarged community. We have discussed that in detail this afternoon. The Select Committee evidence also shows that the present Commission is in disarray. It is having great difficulty in carrying out its remit. We know the Commission is in disarray. We know that the Kinnock reforms, which were designed to try to help some of the worse excesses, have become bogged down.

Despite the fact that the Commission cannot perform its existing tasks efficiently, it is nevertheless in a mood of expansionism on almost every front. It is moving more and more into foreign policy. A training school for Commission diplomats is now being set up as part of the Commission's foray into that area. It is moving further and further into defence, even though the EU was intended to be a civil power and not a military power. As the noble Lord, Lord Owen, rightly reminded us, it is, by a side door and by headline arrangements to match the military arrangements, moving more and more into the defence area. But at every point it has to stop and admit that it does not have the staff to carry out those tasks. It is not equipped to do so. It is a turbo-charged Topsy factor at work.

If one looks at the overseas aid programme, we have the candid and robust remarks of Clare Short that it is a grossly inefficient programme. In fact, she has had even stronger words for it in subsequent years. It is proof that the Commission is not suited to running and delivering the kind of aid and development programmes which the separate nation states, although co-ordinated, were able run and deliver in a much better way. I agree with the Select Committee when it says on page 15 of its report that reform of the Commission is urgently needed. I shall not go into the question of whether we move to one Commissioner for every one of the 20 or 30 countries which may join.

I turn to the problem of enlargement, back to which the noble Lord, Lord Tomlinson, brought us with a sharp jolt. The whole enlargement programme, which is what the IGC is supposed to be helping, is faltering. If one talks to the more and more depressed experts in Budapest or Warsaw, they will say that they now fear that the whole programme will drift into Never Never Land. They have begun to see that there is no momentum behind resolving the difficult political issues and bringing great countries like Poland or small countries like Estonia into the European Union as proper members. When they heard Commissioner Verheugen say the other day that perhaps there should be a referendum in Germany to decide whether there should be enlargement, that merely confirmed their worst fears.

In a joint article in the Financial Times with the Swedish Prime Minister, Mr Persson, the Prime Minister said how much he wanted enlargement. Everyone makes speeches about it. Perhaps this is a point where, in the words of the noble and learned Lord, Lord Howe, the rhetoric and the reality part. Everyone is in principle in favour of enlargement. In practice, nothing is happening. The political will is not there. A feeble Commission is prey to lobby and pressure groups throughout western Europe which are against enlargement because they feel threatened. The whole process is drifting dangerously to the point where some people in Warsaw and elsewhere believe that it will never happen.

There is another distraction. I refer to the European Charter of Fundamental Rights. What is the point of it? I admire the noble Lord, Lord Goldsmith, who is struggling to keep it declaratory and non-binding and to remove the more difficult pieces. However, I have to tell him and the Government that, whether or not it is binding in the end, it is the view of senior judges in this country and supreme court judges in the United States that it will be used vigorously as a basis for judgments by the European Court of Justice and will help to build up a further case for promoting European centralisation against the interests of the diverse Europe we want to see.

Finally, there is the fact that during the course of discussion of the treaty eyes and minds are already on future treaties. Before the ink is even dry—before the treaty is even drafted—we are already talking about the next treaty. There are new ideas about relationships between the countries concerned. Some of those ideas are federalist. The demand is for a clear constitution. There are two views about that. A constitution which limited the competence and expansionism of the Commission might help. A constitution which gave more power to this ropy central organisation before it is reformed would be a further downward move for the whole European dream and idea.

My view is that in the network age we shall see continuous treaty-making and continuous amendment of the relationships between the member states—what has been called by Manuel Castells and others "a Europe of continuous bargaining". People may not like it, but we shall see a situation of being permanently in commission—a sitting constitutional conference which will try to weave together the very rapidly changing interests of the countries of Europe in conditions that are totally different from anything in existence when the European Community was founded.

As the noble Lord, Lord Shore, reminded us, the truth is that the real issues of Europe today are far wider than the more technical sounding issues, although on closer examination they turn out not to be technical all. As the noble Lord, Lord Roper, pointed out, they raise vast issues in themselves. The real problems facing Europe are those surrounding how it is to adjust to totally new conditions in a network age. It was born in an age of communism, an age when trade was visible and could be measured in a way that cannot be achieved now, and in an age before globalisation. Furthermore, it was born in an age when the network worldwide web had not even been thought about. Yet all these elements are shaping a completely new social order as well as completely new political and cultural orders. It is into these that the modern European Union must fit.

To do that, Europe will need to abandon many of the shibboleths and presumptions of the past treaties and will require a great deal of new thinking that goes well beyond the present proposed treaty reforms. It is in that process that I should like to think that the intellectual minds of the administration in this country—the Government and all the brains contained within the Foreign and Commonwealth Office—will think up new initiatives and plans to direct the reformed EU in the right direction for the future. I hope that they are doing so; at the moment I have heard very little evidence of it. As a nation, we must play a vigorous part in achieving a Europe that is dragged into the network age and can compete with the other great regions of the earth, thus ensuring the stability and prosperity of all its people.

2.52 p.m.

The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Scotland of Asthal)

My Lords, I thank the House for today's interesting and wide-ranging debate. In particular I should like to thank the noble Lord, Lord Tordoff, for initiating this discussion. Although I have made this comment in the past, today we have had a feast—this House has benefited from the most extraordinarily high quality level of debate. We have achieved an unusual degree of unanimity. Indeed, before the speech made by the noble Lord, Lord Howell, I thought that comity had finally arrived, not only in this House but perhaps in Europe. I shall return to the comments made by the noble Lord in due course.

Perhaps I may also congratulate the noble Lord, Lord Roper. I believe that this is the first occasion on which he has spoken from his Front Bench. He has done the House an honour in discharging that duty in a splendid and erudite fashion.

The committee of the noble and learned Lord, Lord Hope, has produced an extremely useful report which has stimulated a great deal of interest among others. I apologise; I wish to refer to the committee chaired by the noble Lord, Lord Tordoff. Perhaps I was seduced by the fact that the noble and learned Lord, Lord Hope, sits beside him and they are often seen together. The Government welcome the report and thank the committee for its efforts. In particular, we commend it for the beneficial effect on the thinking of a number of noble Lords. That was reflected in the remarks we heard from the noble Lord, Lord Lamont, and my noble friends Lord Shore of Stepney and Lord Bruce of Donington. It is clear that the erudition of the report has made a lasting impression on many noble Lords.

As is customary with such reports, the Government have already responded formally to each of the recommendations made by the committee. For that reason, I do not intend to do so again today, but perhaps I may attempt to address as many as possible of the issues raised during the course of our debate. I shall turn to specific points in a moment. However, I am sure that the House will not be surprised if I first take the opportunity to restate in more general terms the Government's commitment to this Inter-Governmental Conference.

As the committee's report rightly notes, and as the noble Lord, Lord Tordoff, rightly reminded us, enlargement is a key issue. The new member states are making considerable efforts to prepare for entry, so it is right that the current 15 member states prepare too. Institutional reform is vital if enlargement is to succeed. That is why we have always welcomed this conference and why we have been engaging actively and positively in the negotiations. The noble Lords, Lord Tordoff, Lord Grenfell, Lord Tomlinson, Lord Shore of Stepney, Lord Harrison, Lord Beaumont, Lord Borrie, and every noble Lord who emphasised this as an important aspect were right to do so.

At this stage, I should like to reassure the noble Lord, Lord Howell, who painted a rather dismal and gloomy picture of Europe's future, that the IGC has not been blurred; its purpose is clear. As many noble Lords will know, negotiations have been quite intense. I appreciate the committee's concern that progress has been slow, but I should stress that there are still several months of talks to go and, as a result, it is still too early to talk of solutions to individual issues, particularly on the core subjects. Many of the IGC issues are closely interlinked. Most member states are being careful not to reveal their negotiating hand because concessions on one issue will have implications on others. If I may say so, that is understandable. We very much take on board, however, the exhortation of the noble Lord, Lord Williamson, for prudent vigilance. We shall maintain that.

But there are clear signs of progress. As we say in our formal response to the committee, we are particularly pleased at the way that reform of the European courts is coming on. When the IGC began in February, it was not clear that the Court of Justice or the Court of First Instance reform would be discussed at the IGC. But, as the House will recall, the UK singled this out in February as a key issue for the conference to tackle and pushed for its inclusion on the agenda. We are happy that others have agreed. This is one instance, I hope, when the noble Lord, Lord Williamson, will be pleased to see that something suggested on the Floor of the House was picked up and used well.

Our overall aim has not been to solve all the courts' problems but to give them, and where appropriate the Council, the flexibility to improve the way they are run. We have already made significant strides towards achieving this. There is consensus on a number of important points. To single out only one example, we now have agreement on a move to qualified majority voting for any changes to the courts' rules of procedure. Again this has been a key aim for the Government, and I was glad to see that it is one the committee agreed with in its report, as has been mentioned.

As the committee notes, on other issues we are still some way from final agreement, but two important principles should help us to succeed. First, the clear commitment to end the IGC in December. This is vital if we are to be ready for the accession of the first new member states and is something which I believe all member states support. Secondly, the fact that the agenda remains focused. The topics we are discussing are still those we identified back in February—that is, the basic Amsterdam issues with just a few additional items: co-decision, reform of the courts, closer co-operation and the composition of the European Parliament and other key Community bodies. Those are all areas that we should be looking at as enlargement approaches.

Lord Shore of Stepney

My Lords, before my noble friend moves away from this point, in their response to the committee the Government have said already that we should be very wary indeed about making any changes in the existing rules—including the emergency break—that presently govern flexibility. In the light of the really basic importance of this, can my noble friend be a little firmer and stronger and say that the Government will veto, if need be, changes here and will not be blackguarded into saying "If you do this you are going to hold up enlargement"?

Baroness Scotland of Asthal

My Lords, I can certainly reassure the noble Lord that in those areas—I shall return to them later—where we have made clear that the veto remains, it will remain. However, it is right for Her Majesty's Government to look at the issues as they arise and deal with them in the most appropriate way. I emphasise the importance, for example, about getting agreement in relation to the rules of the court: we wanted that; we got it; and it is good for us and for Europe.

I recall the siren call of those in February who predicted a far more sprawling IGC. I am sorry to have to disappoint them. We have stayed on track. With this platform we can now use the past two-and-a-half months of the conference to find lasting solutions to the key IGC issues, all of which have been touched upon by virtually every noble Lord who has spoken today.

The first of those issues rightly concentrated upon was Commission size. I believe that my noble friend Lord Grenfell, with his usual erudition and style, dealt first with this issue. He was subsequently followed by many other noble Lords. As at Amsterdam, we believe that it is in the interests of a more efficient Commission that larger member states should be prepared to give up their second commissioner when the EU enlarges, provided that a satisfactory agreement is reached on the reweighting of votes in the Council.

Some speakers today suggested that one commissioner per member state is already a fait accompli. My noble friend Lord Borrie, the noble Viscount, Lord Bledisloe, and the noble Lord, Lord Roper, were particularly exercised about this issue. With satisfactory vote reweighting, it is something that we could accept. But it is by no means settled. As other noble Lords said, we must bear in mind that it could still lead to a Commission of 27 or 28 in the future. With that in mind, we also have to look carefully at other options. We recognise the argument for every member state having a commissioner. However, we cannot rule out an eventual cap on the size of the college. We shall certainly consider the possibility of internal restructuring; for example, by varying the number of vice presidents. But I should emphasise at this stage that, as this debate illustrates, there is much to take into account before coming to a definitive view.

No one is suggesting that the voting system in the Council should become entirely proportionate to population, but we are looking at substantial reweighting in favour of the more populous member states—to ensure that they have the right degree of influence and as compensation for the loss of their second commissioner. We have not decided on the means of achieving this. The committee and a number of noble Lords called for a dual or double majority system. We do not rule out a two-pronged system of votes, plus a separate pure population element. But we should prefer a simple reweighting of votes, as with the current system, which gives more weight to population. We believe that that has the advantage of being clearer. However, as I said, it also reflects the dual nature of the Union. No one is suggesting that simple, weighted votes should become entirely proportionate to population. They should also continue to reflect statehood.

As I am sure the House is aware, 80 per cent of Council legislation was adopted by qualified majority voting in 1996, even before the Amsterdam Treaty came into force. So it is not surprising that the room for further manoeuvre is limited. Since the White Paper on the IGC was produced in February, the Government have made clear that they will insist on unanimity for key issues of national concern. The examples given in February remain today: treaty change, own resources, border controls, taxation, social security and defence. I hope that my noble friend Lord Grenfell will be reassured when I say that in other areas we support the case by case approach adopted by the Portuguese presidency and now taken up by the French. This is the only sensible way to proceed if, as they should, member states are properly to weigh up the pros and cons of qualified majority voting in each instance. There has been little agreement so far and I am sure that there are a few Members of your Lordships' House who would see this as a good result. But I am confident that by Nice the conference will produce a sensible extension of QMV where it is justified in the interests of efficient Council decision making.

The Government recognise that, especially in an enlarged EU, there may be occasions when it is sensible for a group of member states to co-operate more closely than others. However, as the noble Lord, Lord Roper, and others have said, we are wary of altering too much the conditions and procedures agreed at Amsterdam. These conditions were carefully designed to allow for flexible decision making but they also protect the interests and obligations of individual member states and the coherence of key policy areas such as the single market. Such safeguards are important, especially in the context of enlargement.

At the moment it is, in our view, up to the advocates of change to demonstrate where closer co-operation might usefully be employed and how this could not be achieved using the current provisions. As the committee pointed out in its report, and as the noble Lord, Lord Tordoff, reiterated today, no such concrete proposals have yet been put forward. As a result, we remain cautious about any major change. We have charted a prudent course. I can assure noble Lords, particularly my noble friend Lord Grenfell, that national intransigence will not prevail over common sense.

I could not but agree with the comments made in the splendid speech of the noble and learned Lord, Lord Howe, as regards the disappointing approach adopted by members of the Tory Party in relation to these issues and with the caution that he gave us against the intemperate use of rhetoric to mislead the British people when looking at these issues. There is a gap between rhetoric and reality: it should be bridged. I reassure the House that Her Majesty's Government are bridging that gap and are doing so successfully, if I may respectfully say so.

The views of some members of the Tory Party that I have mentioned have nothing to do with the closer co-operation provisions currently in the treaty, nor with suggestions put forward by any other member state in the IGC. It is totally unrealistic to suggest that others would allow the United Kingdom or any other country to opt out of individual directives that are intended to apply across the EU. That would be non-negotiable at the IGC.

It would be equally impossible to distinguish between what is a core single market issue and what is not. Important single market barriers are indirect; for example, social legislation, consumer protection rules and environmental protection. Allowing for opt-outs would lead to the break-up of the single market. That is clearly not in Britain's interests.

I refer to a number of issues that the noble Lord, Lord Howell, mentioned. He seemed to paint a picture which would entail us derailing the IGC and the processes of reformation in order to consider the wider issues of Europe. There has been a profound debate about Europe. It has been continuing for many years. That debate will continue. However, much needs to be done to ensure that the reality of today is maintained and that the systems we have are efficient and fair. That is what we are trying to do. That is what has been achieved.

My noble friend Lord Bruce of Donington asked that governments in the EU should make a better effort to explain to our citizens what is happening. I am glad to say that in this IGC this Government have made efforts to do exactly that. In February of this year we published a White Paper called The IGC: Reforms for Enlargement. We hope that it is written in a clear and comprehensive manner. The White Paper was published by the Government and there is a price marked on it. However, I shall be glad to send my noble friend a complimentary copy if he would be assisted by it.

The possibility of the European Union or European Community acceding to the European Convention on Human Rights has been favoured by the committee for some time. Today it was referred to specifically by the noble Lord, Lord Williamson. I can still clearly recall our last debate on the Charter of Rights. Like the committee and some noble Lords, I can see some advantages in the European Community acceding to the European Convention on Human Rights. It could be a means of ensuring further consistency in approach between the two courts.

However, as I said before, it does not seem essential. The treaty already requires the respect of fundamental rights—Article 6.2 of the Treaty on European Union—which includes those in the European Convention on Human Rights. This is justiciable before the Court of Justice: Article 46(d) of the Treaty on European Union. The Court of Justice already applies the European Convention on Human Rights and its case law without accession.

There are practical obstacles. The Court of Justice has also ruled that the European Community does not have the competence to accede. Accession would require changes to both the convention and the European Union/European Community treaties. That would be a time-consuming exercise. As the committee's report highlights, we need to bear in mind the tight timetable for this IGC.

We are encouraged by the fact that the Court of Justice and the European Court of Human Rights have in recent months been informally discussing co-operation and the impact of the Charter of Fundamental Rights. That brings me on to those noble Lords who commented on the charter.

This Government welcome the Charter of Fundamental Rights as an opportunity to set out clearly and simply the rights which EU citizens already enjoy. People need to know their rights and the European institutions need to respect them. The charter will help on both those counts. I understand the fears of the noble and learned Lord, Lord Howe, when he says that "chartermongering" can lead to confusion. In this instance we say that it will lead to clarity.

As noble Lords will be aware, the convention held its final negotiating session earlier this week. I welcome the improvements secured by my noble friend Lord Goldsmith at this meeting and look forward to seeing the final text on Monday. I believe that the charter will be a good result for the United Kingdom and that this is a good example of a positive yet tough negotiating approach paying dividends. The United Kingdom has a long and proud tradition in the protection and promotion of human rights in Europe. This country played a substantial role in the drafting of the European Convention on Human Rights and was the first to ratify it. This Government have restated that commitment through the introduction of the Human Rights Act here. We are strongly committed to the development of a culture of rights and responsibilities across Europe and we welcome a charter that meets that goal.

The legal status of the charter is for the Heads of Government, not the Charter Convention, to decide. The UK Government have been consistently clear that the charter should be declaratory, not legally binding. We were encouraged by the support for that approach at the Feira European Council in June.

The noble Lord, Lord Howell, and the noble Baroness, Lady Park, both touched on defence, as did the noble Lord, Lord Owen, who, regrettably, is no longer in his place. The Government are making good progress in securing our objectives on European defence. A few months ago at Feira, the European Council looked ahead to establishing permanent new arrangements in the EU for military crisis management shortly after Nice.

There is a lot of work to do before then. We have agreed with partners the principles establishing EU relations with NATO, and giving a role to those European members of NATO who are outside the EU. The detailed work to put those principles into practice remains, but the task is already under way.

Feira also looked at whether treaty change would be necessary for the new arrangements that we have in mind. The European Council took note of the legal advice given. The changes under consideration to give the EU access to military capabilities to allow it to carry out crisis management and peace-keeping tasks were already adequately provided for in the treaty. However, as our work goes forward we may find areas in which treaty change is desirable in order to put in place the most effective arrangements possible. That is why Feira asked for the question of treaty change for defence to be kept under review in the run-up to Nice. Should defence become part of the IGC, the Government will ensure that your Lordships are informed.

It is right that the Commission, as well as the presidency, reports to the European Parliament on the common foreign and security policy—Article 21 of the treaty on European Union—but the Commission will not be present or represented on the new military committee and will therefore be unable to report on that. The information about the military committee will come from the presidency and nowhere else.

Several noble Lords have referred to the comments made by President Chirac and Joschka Fischer and others and the wider issues that flow from them. The debate on Europe's future is alive and well. Our Prime Minister will put forward some thoughts in a speech in Warsaw one week from today. I do not have the temerity to pre-empt what he may wish to explore with his colleagues at that time. However, all that must be seen as separate from the IGC.

We fully accept that the forthcoming IGC will not be the last word on the future shape of the EU. That future shape cannot be a question only for the present member states. The new members of the club must play their part in making the club's rules. The first new members should join us around the table before decisions are taken in another IGC. Any work on that future IGC must not delay work on enlargement.

I also once again respectfully agree with the comments of the noble and learned Lord, Lord Howe, when he mentioned the fears expressed about the emergence of a superstate. He was right to ask where those views come from. Notwithstanding his comments, it is right that I should respond as well.

Any discussion that we have on the direction that the Union should take does not amount to a continental or Franco-German plot to subsume the nation state and erase British nationality. In his speech to the Bundestag, President Chirac stated clearly: Neither you nor we envisage the creation of a European superstate which would replace the nation states and signal the end of their existence as actors on the international stage". And if that were not enough, a few days later he clarified the point: I do not think that one can have a federal Europe. At least as a Frenchman would understand the term. The creation of a United States of Europe is not realistic, because not a single nation is prepared to give up its identity". I echo those comments. I for one would not be prepared to see the creation of a federal European state and I can reassure my noble friend Lord Bruce of Donington that his pride in being British is shared by all members of Her Majesty's Government and, I am sure, by Members of this House. That pride will not abate. And, in case there is any doubt, it is wholeheartedly and unreservedly shared by me.

Her Majesty's Government have taken into account the results of the Danish referendum. I know that the noble Lord, Lord Owen, suggested that the Government had said that the referendum was irrelevant. We have never said any such thing. I believe that the noble Lord confused the words of the interviewer with the response of the interviewee.

Therefore, I take this opportunity to react to the observations and to comment briefly on the results of the Danish referendum held yesterday. My comment is simple enough. The Danish referendum is a matter for the Danish people. The outcome has no bearing on the Government's policy towards the United Kingdom's membership of the single currency. I can assure the noble Lord, Lord Roper, that we intend to take his advice and not to be diverted by the Danes.

As the Chancellor made clear in his Mansion House speech in June, the Government's policy on the EMU has not changed and will not change. It remains as set out by the Chancellor in October 1997 and as restated by the Prime Minister in February 1999. The determining factor which underpins any government decision is whether the economic case for the United Kingdom to join is clear and unambiguous. If it is, there is no constitutional bar to joining. Because of the magnitude of the decision, the Government believe that, whenever a decision to enter is taken by the Government, it should be put to a referendum of the British people. We know what the Danish people have said; British people will be given the same advantage to speak and be heard.

It is clear that, so far as concerns the Inter-Governmental Conference, we have much to do in the next few months. However, I can promise the House that the Government will remain committed and engaged. Enlargement is a prize worth fighting for.

I thank the committee again for its report and promise that we shall continue to keep it up to date with progress as negotiations progress. Of course, as we approach the final Council in Nice we should welcome any further input that it has to make. I say again how much I have been warmed by the speeches in the House today and how much I thank each and every participant for their extremely valuable and well thought-out contribution.

3.24 p.m.

Lord Tordoff

My Lords, I echo the last words of the Minister. It has been an excellent debate, with four-and-a-half hours of concentrated, sensible, intelligent speeches—which doubtless will go totally unreported in the world outside, but the debate has nevertheless been worth while.

I have been flattered more than anything by the fact that the Minister confused me with the noble and learned Lord, Lord Hope of Craighead. I must not get big headed about that.

We will continue to keep our eye on what is happening at the IGC until the last minute, and indeed, we will progress from looking at the Commission to having a look at the Council, because it seems that the efficiency of the Council is something which may merit investigation by your Lordships on that Committee and by the House.

I shall not make another long speech at this stage, but I am grateful to everybody who has participated in the debate.

On Question, Motion agreed to.

House adjourned at twenty-five minutes past three o'clock.